TaxTMI 
TaxTMI 
2013 (1) TMI 648
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....t Commissioner of Income Tax Company Circle I(2), Coimbatore" 2. The petitioner's case has a chequered history and deals with several assessment years under the Income Tax Act. When the writ petition was filed, details relating to several assessment periods were not filed as annexures to the writ petition. Subsequently, pursuant to the orders of this Court dated 27.11.2012, the assessment orders relevant to the case as well as assessment orders not relevant to the case were filed by way of a common additional typed-set of papers and were perused. 3. The facts of the case, in brief, are as follows. The petitioner is engaged in the manufacture of cotton yarn and allied products. The issue for consideration is the petitioner's claim on the expenditure incurred for replacement of machinery in the spinning mills as revenue expenditure was disallowed by the assessing income tax officer. The assessment periods together with the corresponding demand which are relevant to the present case are as below:- A.Y. 1993-94 Rs. 45.34 lakhs A.Y. 1994-95 Rs.1069.93 lakhs A.Y. 1998-99 Rs. 644.65 lakhs A.Y. 2005-06 Rs. 8.94 lakhs A.Y. 2006-07 Rs. 517....
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.... 4. It is not in dispute that the petitioner has preferred appeals in respect of the five assessment years in question before the Income Tax Appellate Tribunal or the Commissioner of Income Tax (Appeals), as the case may be, and the learned counsel for the respondent states that no order of stay has been granted so far in the appeals. In the light of the above factual matrix of the case, for the five assessment years, namely, 1993-94, 1994-95, 1998-99, 2005-06 and 2006-07, an amount of Rs.2286.72 lakhs, which includes tax and interest, has been demanded by the impugned letter and the same is under challenge in this writ petition. 5. The learned counsel for the petitioner contended that the department failed to take note of the fact that a demand under Section 156 of the Act could be made only if the mandatory provisions of the Act are followed. It is the case of the petitioner that the assessment orders do not reflect the interest portion now demanded from the petitioner. Therefore, the demand itself is bad and the letter directing to pay arrears is unsustainable. The learned counsel relied upon two decisions, one by the Division Bench of Allahabad High Court made in I.T.....
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....ct is mandatory as held by the Supreme Court in Commissioner of Income Tax v. Anjum M.H.Ghaswala & others, 252 ITR 1. There is no quarrel with the aforesaid proposition laid down by the Supreme Court, but, at the same time, the assessment order must contain the imposition of interest and, only thereafter, a notice of demand could be issued under Section 156 of the Act. To elucidate the matter, a notice of demand is somewhat like a decree in a civil suit, which must follow the order. When the judgment in a civil suit does not specify any amount to be recovered, the decree could not contain such amount. Similarly, when the assessment order under Section 143(3) of the Act does not indicate that interest would be leviable, the notice of demand under Section 156 of the Act levying interest would be wholly illegal since interest is payable in consequence of an order passed as is clear from Section 156 of the Act. Consequently, the notice of demand cannot go beyond the assessment order and the assessee cannot be served with any such notice demanding interest. There is another aspect of the matter. The assessee must know that he has been charged with interest under a particular section ....
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....ssessment order. It cannot be separated. In any event, the assessment orders are not under challenge and the petitioner has no order of stay in the appeals said to have been filed. 7. This Court is not inclined to accept the legal plea of the petitioner that the demand of interest under Sections 234-B and 234-C of the Act is not sustainable in law, for the following reasons:- (i) Admittedly, it is the case of the petitioner that the assessment orders passed on remand are the subject matter of appeals before the Commissioner of Income Tax (Appeals) or the Income Tax Appellate Tribunal, as the case may be. It is, therefore, for the petitioner to work out its remedy in the said forum including appropriate interlocutory orders as against tax and interest. The writ petition filed challenging the letter demanding payment of arrears is, per se, not maintainable for the above said reason. The petitioner, having availed the statutory remedy, has to seek indulgence in the appeals said to have been filed. (ii) In any event, on the merits of the contention that the assessment order does not include the demand of interest under Sections 234-B and 234-C of the Act is concerned, it is an....
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.... deviant conduct to somehow snatch an interim order on hyper-technical pleas. (iv) In ground (b) of the grounds raised in the writ petition, it is stated that when the petitioner company is entitled to depreciation benefit for the assessment years in question, the impugned demand would be unsustainable. This factual plea cannot be raised before this Court and it has to be urged before the appellate authority if such plea is raised. To clarify this position, Mr. Chopda referred to a letter dated 15.10.2012 sent by the petitioner to the Assistant Commissioner of Income Tax, Company Circle-I(2) setting out objections to the demand. Therefore, the petitioner has to pursue the matter before the said authority and cannot pre-empt the issue by filing this writ petition and dispute the factual aspects. While challenging the letter demanding arrears, factual plea is raised without any just or reasonable grounds. It is not the petitioner's case or the counsel's plea that the letter is wholly unjust, arbitrary, illegal or contrary to law. It is based on assessment orders. (v) Similarly, the plea in ground (c) relating to the depreciation benefit for other assessment years is a matter to....