2023 (8) TMI 885 - HC - Income Tax

Court orders status quo on deposit, reduces tax amount, emphasizes cooperation in appeal process

Sukumar Dhanapal Versus Income Tax Officer, Non Corporate Ward 9 (1) Chennai, Principal Commissioner of Income Tax-1, Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income tax Officer, Commissioner of Income Tax (Appeals)

The court directed the respondents to maintain the status quo on the deposit amount for two months and expedite the appeal process. The petitioner's ... Stay of demand - directions to deposit of amounts lesser than twenty percent of the disputed demand - HELD THAT:- There shall be a direction to the respondents to maintain status quo as far as pre-deposit of the amount pursuant to the Assessment Order dated 19.03.2022 or in terms of the rectification order passed on 17.01.2023 for a period of two months from today. The Appellate Commissioner / fourth respondent before whom appeal of the petitioner is pending shall endevour to dispose of the above appeal, within a period of two months from the date of receipt of copy of this order. The petitioner is directed to cooperate with the Appellate Commissioner namely the fourth respondent. In case, for any reason the appeal is not disposed of by the fourth respondent, the respondents may call upon the petitioner to pay amount in terms of taking note of the decision of the Hon'ble Supreme Court in the case of PCIT vs. LG Electronics India (P.) Ltd [2018 (7) TMI 1905 - SC ORDER] has held that tax authorities are authorised to grant waiver of deposit of amounts lesser than twenty percent of the disputed demand in the facts and circumstances of each case Writ Petition is disposed of with the above observations. Issues involved:The petitioner challenged an order under Section 220(6) of the Income Tax Act, 1961, directing a deposit of 20% of disputed tax for Assessment Year 2015-16. The petitioner also filed a statutory appeal under Section 246(A) and sought rectification of the Assessment Order. The main contentions revolved around financial difficulties, timely filing of returns, and compliance with tax authorities' directives.Challenge to Impugned Order:The petitioner contested the order directing a 20% deposit of disputed tax, citing financial difficulties and reliance on circulars and legal precedents supporting their position. The Assessment Order was subsequently rectified, reducing the confirmed tax amount. The petitioner's case emphasized personal circumstances affecting tax compliance, including a serious injury to their son and challenges due to the Covid-19 pandemic.Legal References and Precedents:The petitioner relied on circulars and court decisions, such as CBDT Instruction No.1914 and cases like Mrs. Kannammal vs. Income Tax Officer, KEC International Ltd. vs. B.R. Balakrishnan, Flipkart India (P.) Ltd. vs. Assistant Commissioner of Income-tax, and UTI Mutual Fund vs. ITO. These references were used to support arguments regarding the rectification of the Assessment Order and the petitioner's financial challenges.Court's Decision and Directions:After considering arguments from both sides, the court directed the respondents to maintain the status quo on the deposit amount for two months. The Appellate Commissioner was instructed to expedite the appeal process within the same timeframe. The petitioner was asked to cooperate with the Commissioner, and in case of appeal delay, the respondents could request payment based on the Supreme Court's ruling allowing waivers of deposit amounts less than 20% of the disputed demand.Conclusion:The Writ Petition was disposed of with the outlined directions, and connected miscellaneous petitions were closed without any costs being awarded. The judgment addressed the petitioner's challenges regarding the deposit amount, rectification of the Assessment Order, and the need for timely resolution of the appeal process.