Court rulings on tax disputes: payment confirmed for certain years, annulment for procedural errors in others.

The court dismissed W.P.No.9801 of 2019, confirming the direction to pay 10% of the disputed amount for AY 2009-10 and 2010-11. In contrast, W.P.No.1451 of 2020 was allowed, annulling the assessment order for AY 2011-12 due to procedural irregularities and lack of adherence to natural justice. The connected writ miscellaneous petitions were closed with no costs.

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Issues Involved:
1. Challenge to the order passed by the Assistant Commissioner of Income Tax (Appeals) regarding stay of demand for AY 2009-10 and 2010-11.
2. Challenge to the assessment order for AY 2011-12 regarding the genuineness of advertisement advances and loans.

Issue-wise Detailed Analysis:

1. Challenge to the Order of Stay of Demand for AY 2009-10 and 2010-11:
The petitioner challenged the order passed by the Assistant Commissioner of Income Tax (Appeals) under the Income Tax Act, 1961, which disposed of a stay application pending statutory appeals against assessment orders for AY 2009-10 and 2010-11. The officer had stayed 90% of the demand and directed the petitioner to remit 10% of the demand. The court found no reason to interfere with the direction to pay 10% of the disputed amount and confirmed the same. The court also noted that any refunds due to the petitioner as a result of the annulment of the assessment for AY 2011-12 should be considered in determining the balance payable for AY 2009-10 and 2010-11.

2. Challenge to the Assessment Order for AY 2011-12:
The petitioner challenged the assessment order for AY 2011-12, which added Rs. 150 crores as unexplained income from advertisement advances received from four companies and Rs. 83 crores from a subsidiary company. The Income Tax Appellate Tribunal had set aside the original assessment order for lack of adherence to natural justice and directed a denovo assessment.

The court found that the Assessing Officer failed to comply with the Tribunal's directions to provide the petitioner with the documents relied upon for the assessment. The court noted that the assessment was completed without giving the petitioner an opportunity to rebut the evidence, and the assessment was based on presumptions and suppositions. The court emphasized the importance of judicial discipline and adherence to procedural fairness in assessments.

The court observed that the Assessing Officer merely reiterated the reasons from the original assessment order without proper application of mind, despite the Tribunal's directions for a denovo assessment. The court concluded that there was no intention to afford a fair hearing, which bordered on contempt. Consequently, the court annulled the impugned assessment order for AY 2011-12.

The court clarified that the annulment of the assessment for AY 2011-12 does not imply acceptance of the petitioner's claims on merits. The Commissioner of Income Tax Appeals can consider subsequent events, including the petitioner's claim of repayment of loans from advertisement revenues, while disposing of the appeals for AY 2009-10 and 2010-11.

Conclusion:
- W.P.No.9801 of 2019: Dismissed, confirming the direction to pay 10% of the disputed amount.
- W.P.No.1451 of 2020: Allowed, annulling the assessment order for AY 2011-12.
- Connected writ miscellaneous petitions: Closed with no costs.

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