ATT LOGISTICS PRIVATE LIMITED V. PRINCIPAL COMMISSIONER OF INCOME TAX

WP/29671/2024

AI Insights

The case involves ATT Logistics Private Limited, which filed a writ petition against the Principal Commissioner of Income Tax and other tax authorities, challenging an interim stay demand order. The petitioner contested the requirement to deposit 10% of a tax demand of Rs.3,87,69,537 as a condition for stay, arguing that the tax authorities had not considered their appeal in a timely manner and had initiated recovery proceedings prematurely. The court upheld the tax authority's decision, finding the 10% deposit requirement reasonable under the circumstances, especially considering the ongoing recovery actions and the financial impact of COVID-19 on the petitioner's business.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746989 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 07-01-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: GOPI KRISHNA
• Keywords: Covid-19 impact; Deposit demand; Rectification Order; Stay Application; Interim stay of demand
• Section: 143(3); 154

Judgement Text

" - 1 - NC: 2025:KHC:413 WP No. 29671 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 29671 OF 2024 (T-IT) BETWEEN: ATT LOGISTICS PRIVATE LIMITED A COMPANY REGISTERED UNDER THE INDIAN COMPANIES ACT, HAVING REGISTERED OFFICE AT NO.193 2ND FLOOR SHIV SADAN OUTER RING ROAD, OPP: NCC APARTMENTS B NARAYANAPURA BENGALURU-560016 REPRESENTED BY ITS DIRECTOR SRI BHARATH POOVAIAH. …PETITIONER (BY SRI. GOPI KRISHNA M. R., ADV.) AND: 1. PRINCIPAL COMMISSIONER OF INCOME TAX BENGALURU-01 BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA BENGALURU-560095. 2. COMMISSIONER OF INCOME TAX, (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC) (PR.CCIT REGION DELHI), C-BLOCK, 4TH FLOOR, S.P.M. CIVIC CENTER NEW DELHI-110001. 3. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(2) BENGALURU Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:413 WP No. 29671 of 2024 BMTC BUILDI NG, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU-560095. 4. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1) BENGALURU, BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA BENGALURU-560095. …RESPONDENTS (BY SRI M DILIP, ADV.) THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A) DIRECTION QUASHING THE IMPUGNED ORDER DATED 24.09.2024 ORDER IN DIN AND LETTER NO.ITBA/COM/F/17/2024- 25/1069011100(1) PASSED BY 1ST RESPONDENT AT ANNEXURE-L AND B) DIRECTION DIRECTING THE 2ND RESPONDENT TO DISPOSE OF THE APPEAL FILED BY THE PETITIONER WITH IN 90 DAYS AS PER ANNEXURE-H. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT ORAL ORDER The petitioner, a registered Private Limited Company is before this Court under Article 226 of the Constitution of India, questioning the correctness or otherwise of order bearing No.ITBA/COM/F/17/2024-25/1069011100(1) dated 24.09.2024 (Annexure-L) whereunder, the first respondent granted interim stay of demand, subject to the - 3 - NC: 2025:KHC:413 WP No. 29671 of 2024 petitioner depositing in all, 10% of the demand of Rs.3,87,69,537/-, with an observation that in case if the petitioner fails to deposit the said amount, the stay petition will be deemed to be dismissed, with liberty to initiate necessary recovery proceedings without further reference to the tax payer. 2. Heard learned counsel Sri.Gopi Krishna M.R., for petitioner and learned counsel Sri.M.Dilip for respondents. Perused the writ petition papers. 3. The demand in question relates to assessment year 2017-18. Assessment order in respect of the Assessment year was passed under order dated 28.12.2019 under Section 143(3) of Income Tax Act, 1961 (for short “the Act”). Thereafter, after providing an opportunity, rectification order was passed under Section 154 of the Act and demand notice was issued. Against the said rectification order, the petitioner is said to have filed an appeal before the second respondent. As the second respondent failed to consider the appeal and in the - 4 - NC: 2025:KHC:413 WP No. 29671 of 2024 meanwhile, recovery proceedings was initiated, the petitioner is said to have filed an application for stay of demand. 4. Considering the stay application, Annexure-L order is passed. Learned counsel for the petitioner would submit that the petitioner had deposited a sum of Rs.20,16,843/- out of the demand of Rs.4,07,86,380/-. Thereafter, the respondents have attached the Bank Account of the petitioner and recovered a sum of Rs.7,00,000/-. Thus, the petitioner has paid in all a sum of Rs.27,16,843/-. Thus, he submits that taking note of the deposit, the second respondent may be directed to take up the appeal for hearing and pass appropriate order. It is also submitted that, due to COVID-19, the business of the petitioner has suffered loss and he is not in a position to make any deposit. 5. On the other hand, learned counsel Sri.M.Dilip for respondent would submit that in terms of Circular of the Board, 20% of the demand to be deposited by the - 5 - NC: 2025:KHC:413 WP No. 29671 of 2024 assessee to consider the appeal. But the first respondent has passed an order directing the petitioner to deposit 10% of the demand which itself is not proper. Learned counsel would submit that the petitioner may be directed to deposit 20% of the demand to consider the appeal filed by the petitioner. Thus, he prays for dismissal of the writ petition. 6. Having heard the learned counsel for the parties and on perusal of the entire writ petition papers, I am of the view that the impugned order at Annexure-L is a reasonable order, which would not require any interference by this Court. Though pre-deposit is not a condition precedent to entertain the appeal, when stay application is filed, the authorities at their discretion could pass appropriate orders. In the instant case, the first respondent taking note of the entire fact situation has directed the petitioner to deposit 10% of the demand which is reasonable. The petitioner to deposit 10% of the - 6 - NC: 2025:KHC:413 WP No. 29671 of 2024 demand of Rs.4,07,86,380/- after deducting the amount already deposited. 7. With the above, the writ petition stands disposed of. The petitioner is given six weeks time to deposit balance amount as directed by the appellate authority in its interim order. On deposit by the petitioner, the respondents to remove attachment on Bank account of the petitioner. Respondent No.2 is directed to dispose of the appeal filed by the petitioner, within three months from the date of deposit of the balance of 10% of the demand by the petitioner. Sd/- (S.G.PANDIT) JUDGE MPK CT:BMS List No.: 1 Sl No.: 50 "