2013 (3) TMI 628

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....ischarged. CM 3811/2013 in WP(C) 2004/2013, and CM 3821/2013 in WP(C) 2009/2013, CM 3824/2013 in WP(C) 2010/2013, and CM 3827/2013 in WP(C) 2011/2013,CM?3830/2013 in WP(C) 2012/2013, and CM 3862/2013 in WP(C) 2027/2013 Allowed subject to all just exceptions. WP(C) 2004/2013 and CM 3809-10/2013, WP(C) 2009/2013 and CM 3819-20/2013, WP(C) 2010/2013 and CM 3822-23/2013, WP(C) 2011/2013 and CM 3825-26/2013, WP(C) 2012/2013 and CM?3828-29/2013, WP(C) 2027/2013 and CM 3860-61/2013 These writ petitions are directed against notices of demand under Section 156 of the Income Tax Act, 1961 issued on 15.03.2013 and had been received by the petitioner on 19/20.03.2013. The following table indicates the financial years, the writ petition numbers and....

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....20. (1) Any amount, otherwise than by way of advance tax, specified as payable in a notice of demand under section 156 shall be paid within thirty days of the service of the notice at the place and to the person mentioned in the notice : Provided that, where the Assessing Officer has any reason to believe that it will be detrimental to revenue if the full period of thirty days aforesaid is allowed, he may, with the previous approval of the Joint Commissioner, direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of thirty days aforesaid, as may be specified by him in the notice of demand.? A plain reading of the above provision and in particular the proviso would make i....

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.... ?assessee in default? in respect of the demand entries under Section 226 of the Act. Where the assessee would be deprived of seeking recourse to such remedy on the one hand, there on the other, he would be exposed to liability of interest and penalty immediately on the expiry of the reduced period. Thus, an order of the AO under proviso to Section 220(1) vests the assessee with serious consequences. Once such are the serious consequences of the default in compliance to the direction for payment of tax in the reduced period, greater would be the obligation upon the AO to act fairly and judiciously. There has to be definite cause or reason before the AO capable of being understood by the person of common prudence that but for such an order t....

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....to refer to certain illustrations whether (where) mischief would be covered under proviso to Section 220(1): (i) If an assessee is intending to leave the territorial jurisdiction with intention to evade payment of demand, (ii) A case where an assessee is liquidating his assets, except in due course of its business; again with the intention of evading to pay tax and defeat the demand raised under Section 156 of the Act, (iii) An assessee is intending to leave the country, (iv) Is doing such acts and deeds which would render it impossible for the Revenue to recover its dues on account of arrears or current demand, and (v) Closing of business by the assessee coupled with such other factors as may be deemed relevant by the AO to reach to a con....

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....nce scheme may be put in place to avoid payment of due tax as verified by the sample mail attached herewith. In light of discussion above, this is a case where I have reason to believe that if the full period of 30 days is allowed it will be detrimental to revenue. Permission may therefore be accorded u/s 220, first proviso thereunder to curtail the period of demand to 5 days only.? It is apparent from the above extract that the only apprehension is that the petitioner would be exploring legal options to delay and obstruct recovery and that it would put in place a ?tax avoidance scheme? so as to avoid payment of tax. Certain e‑mail communications to personnel within the petitioner company were also referred to, to indicate that the....