B.D.R. Project Pvt Ltd V. Asst Commissioner of Income Tax Circle-1(3) Hyderabad and Commissioner of Income Tax (Appeals)-II Hyderabad

WP/9209/2009

AI Insights

The case involves M/s.B.D.R.Project Pvt Ltd, which filed a writ petition against the Assistant Commissioner of Income Tax and the Commissioner of Income Tax (Appeals)-II, Hyderabad. The petitioner challenged the notice issued under section 226(3) of the Income Tax Act, 1961, which directed the South Central Railway to pay a disputed tax amount of Rs 57,53,680 for the assessment years 2003-04, 2005-06, and 2006-07. The petitioner argued that the recovery of the tax should not proceed while appeals against the assessment orders were pending, citing a CBDT circular that prohibits such actions in the absence of any lapses by the assessee. The court agreed with the petitioner's stance, highlighting the importance of not using coercive methods for tax recovery during the appeal process.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 681235 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 30-04-2009
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B SHARMA
• Assessee Lawyers: A V KOUNDINYA
• Keywords: Coercive Recovery; Income Tax; Mandamus; Pending appeals
• Section: 226(3)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE THIRTIETH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE THE CHIEF JUSTICE and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 9209 of 2009 Between: M/s.B.D.R.Project Pvt Ltd 8-2-293/82/NL/6A MLA & MP Colony Jubilee Hills Road No.10C Hyderabad rep.by its Managing Director B.Dhanumjaya Rao S/o. B.Koteswara Rao ..... PETITIONER AND 1 Asst Commissioner of Income Tax Cricle-1(3) Hyderabad 2 Commissioner of Income Tax (Appelas)-II Hyderabad .....RESPONDENT(S) Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed herein the High Court will be pleased to issue a writ order or direction more one in the nature of Mandamus declaring that the notice issued 1st respondent u/sec 226(3) of the income Tax Act 1961 directing the South Central Railway, Secunderabad to pay the disputed tax for the assessment years 2003-04,2005-06 and 2006-07 as arbitrary illegal and consequently direct the respondents not to take coercive steps for the recovery of a sum of Rs 57,53,680/ pending disposal of the appeals before the Commissioner of Income Tax(Appeals ) -II Hyderabad for the Assessement years 2003-04,2005-06 and 2006-07 Counsel for the Petitioner: MR.A.V.KRISHNA KOUNDINYA Counsel for the Respondents: MR.B.NARASIMHA SARMA The Court made the following : ORAL ORDER: (Per Sri Anil R. Dave, CJ) Rule. Service of Rule is waived by Sri B. Narasimha Sharma, learned standing counsel appearing for the respondents. At the request of the learned advocates, the petition is finally heard today. The short point which has been involved in the petition is whether during the pendency of the appeals filed by the petitioner against the assessment orders, the amount of tax payable by it, which is subject matter of the appeals, should be recovered by use of coercive method. It is the case of the petitioner that appeals are filed by it so far as assessment orders for the years 2003-04, 2005-06 and 2006-07 are concerned. According to the petitioner, approximately Rs.64.00 Lakhs are to be paid by it and out of the said amount, a sum of Rs.32.00 Lakhs had already been deducted from the amount received by the petitioner and the said amount had been forwarded to the Revenue. More over, a sum of Rs.5.00 Lakhs had already been paid by the petitioner. Thus, around Rs.37.00 Lakhs have already been paid and Rs.27.00 Lakhs are yet to be paid. It is the case of the petitioner that according to Circular of CBDT dated 21-08-1969 (Instruction No.1/6/69-ITCC), the amount of tax should not be recovered when an appeal against the assessment order is pending, especially when there are no lapses on the part of the assessee. The above facts could not be disputed by the learned standing counsel appearing for the respondents. Looking to the facts of the case, it is directed that the appeals which are pending before respondent No. 2 should be decided as soon as possible and preferably before 30-06-2009. Learned advocate for the petitioner has assured this Court that the representative of the petitioner appearing before the appellate authority would not pray for time unnecessarily and shall extend his cooperation to the appellate authority so that the appeals can be finally disposed of within the time prescribed by this Court. In the circumstances, it is directed that no further recovery of the amount of tax shall be effected till the appeals filed by the petitioner are finally disposed of. In view of the above direction, the petition stands disposed of as allowed to the above extent with no order as to costs. ANIL R. DAVE, CJ RAMESH RANGANATHAN, J 30th April, 2009. ks Note: Furnish CC in three days. B/O ks "