Andhra Pradesh Housing Board, 'Gruhakalpa' V. The Deputy Commissioner of Income Tax and The Commissioner of Income Tax (Appeals)-V and The 2nd respondent and The 5th and 6th respondents

WP/3544/2011

AI Insights

The case involves the Andhra Pradesh Housing Board, which challenged an income tax assessment order demanding a tax of Rs.507,23,93,980 for the assessment year 2008-09. The board appealed the assessment to the Commissioner of Income Tax (Appeals)-V and sought a stay on the tax collection from the Deputy Commissioner of Income Tax, which was rejected. While the stay application was pending, a garnishee notice was issued, leading to the remittance of a substantial amount to the Revenue Department. The board filed a writ petition to restrain further proceedings based on the assessment order, which was not entertained due to the ongoing appeal but resulted in a stay on the recovery of disputed tax pending the decision on the stay application.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 679475 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 16-03-2011
• Assessment Year: misc
• Other Referred Cases: BMRDA v. Gokak Patel Volkart (1995(1) SCC 642)
• Laws Referred To: Housing Board Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Keywords: Assessment Order; Garnishee notice; Income Tax; Stay of collection
• Section: 264

Judgement Text

"HONOURABLE SRI JUSTICE A.GOPAL REDDY AND HONOURABLE SRI JUSTICE N.RAVI SHANKAR WRIT PETITION No.3544 of 2011 Between: Andhra Pradesh Housing Board, “Gruhakalpa”. …. Petitioner and The Deputy Commissioner of Income Tax and others …. Respondents This court made the following: HONOURABLE SRI JUSTICE A.GOPAL REDDY AND HONOURABLE SRI JUSTICE N.RAVI SHANKAR WRIT PETITION No.3544 of 2011 ORDER: (per the Hon’ble Sri Justice A.Gopal Reddy) Aggrieved by the order of the 1st respondent-The Deputy Commissioner of Income Tax, in determining the income of the petitioner for the assessment year 2008-09 and demanding the tax of Rs.507,23,93,980/- the petitioner preferred appeal before the 3rd respondent-The Commissioner of Income Tax (Appeals)-V. Against the rejection of the application filed by the petitioner before the 1st respondent seeking stay of collection of disputed tax, the petitioner invoked the jurisdiction of the 2nd respondent for grant of stay on 10.02.2011. While the stay petition is pending before the 2nd respondent, the 1st respondent issued a garnishee notice to the 5th and 6th respondents and on service of such garnishee notice, the 6th respondent remitted a sum of Rs.22,92,19,581/- to the Revenue Department. In view of the same, the petitioner filed the present writ petition to restrain the 1st respondent from initiating any proceedings against the petitioner pursuant to the assessment order dated 31.12.2010. It is now fairly well settled that when a statutory appeal is pending before the statutory authority, a writ questioning the said order, which is subject matter of appeal, cannot be entertained and adjudicated by this Court {See BMRDA v. Gokak Patel Volkart (1995(1) SCC 642)}. In view of the same, we are not inclined to entertain the writ petition questioning the assessment order, which is subject matter of appeal. However, against the orders passed by the 1st respondent, summarily rejecting the application for stay of assessment pending the appeal before the 3rd respondent, the petitioner preferred an appeal under Section 264 of the Act before the 2nd respondent, which has to be decided by him. Further, by recovering the disputed tax pending the appeal, the appellate remedy cannot be made nugatory. The petitioner is a statutory Board constituted under the Housing Board Act owned by the State Government and it is not difficult for the Revenue Department to recover the amount in the event of appeal or the stay petition being dismissed. It is represented that in view of the garnishee orders, the petitioner board has not been allowed to operate the bank accounts and in the process the Board is not in a position to pay salaries to its employees. In view of the same, interest of justice will be served, if the recovery of amounts is stayed, pursuant to the assessment order till the 2nd respondent decides the stay petition filed against the orders of the 1st respondent, dated 03.02.2011. The Writ Petition is, accordingly, disposed of directing the 2nd respondent to dispose of the stay application. The parties are at liberty to file additional pleadings, if any, before the 2nd respondent. There shall be no order as to costs. _____________________ A. GOPAL REDDY, J ______________________ N. RAVI SHANKAR, J March 16, 2011 LMV "