Hinduja Realtors Private Limited V. Assistant Commissioner of Income Tax Circle 11(4) and Assistant Registrar Income Tax Appellate Tribunal

WP/33278/2013

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Hinduja Realtors Private Limited filed a writ petition under Articles 226 and 227 of the Constitution of India, seeking a mandamus to direct the Income Tax Appellate Tribunal to expedite the hearing of their pending appeal against an assessment order dated 24.12.2010, which imposed a liability of Rs.59,02,911. The petitioner had previously been granted interim stays by the Tribunal, but these were limited to 365 days due to legal constraints, leading to the risk of the appeal becoming infructuous. The State, represented by the Assistant Commissioner of Income Tax and the Assistant Registrar of the Income Tax Appellate Tribunal, did not contest the availability of a statutory remedy but argued against the continuation of recovery proceedings. The court, referencing a similar case (W.P.No.3787-3788/2013), granted the writ, emphasizing the need for consistency in judicial decisions and the protection of the petitioner's rights until the appeal is resolved.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 794230 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-01-2014
• Assessment Year: misc
• Other Referred Cases: W.P.No.3787-3788/2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: ASHOK KULAKARNI
• Keywords: Appeal Pending; Assessment Order; Income Tax; Interim Stay; Writ jurisdiction
• Section: 143(3)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 6TH DAY OF JANUARY 2014 BEFORE THE HON'BLE DR.JUSTICE JAWAD RAHIM WRIT PETITION NO.33278/2013 (T-IT) BETWEEN: HINDUJA REALTORS PRIVATE LIMITED NO.7 & 12, INDUSTRIAL SUBURB YESHWANTHPUR BANGALORE-560022. ... PETITIONER (BY SRI ASHOK A KULAKARNI, ADV.) AND: 1. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 11(4), 5TH FLOOR R P BHAVAN, OPP R B I NRUPATHUNGA ROAD BANGALORE-560001 2. THE ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL 2ND 3RD, FKCCI COMPLEX GOLDEN JUBILEE BUILDING NEXT TO MYSORE BANK K G ROAD BANGALORE-560009. ... RESPONDENTS (BY SRI K V ARAVIND, ADV. FOR R-1 & 2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA WITH A PRAYER TO DIRECT TO THE INCOME TAX APPELLATE TRIBUNAL [THIRD RESPONDENT] TO DISPOSE OF AT AN EARLY DATE THE APPEAL PENDING BEFORE IT ARISING OUT OF THE ORDER OF ASESSMENT IN ANN-A DATED 24.12.2010. 2 THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:- O R D E R The assessee is in writ action seeking direction in the nature of mandamus to the Income Tax Appellate Tribunal to hear and dispose of its appeal pending consideration against the order of assessment Annexure ‘A’. 2. The respondents are duly represented by Sri Aravind, learned Standing counsel. Heard both sides. 3. The factual matrix borne from the records and the fact situation manifesting from the submission of the learned counsel on both sides would show that the petitioner, an assessee of Income Tax suffered an order under Section 143(3) of the Income Tax Act for the years 2008-09 dated 24.12.2010 whereby, the Income Tax authorities have disallowed a sum of Rs.4,10,00,000/- incurred as expenditure by virtue of an obligation in respect of readymade garments etc. 3 The petitioner questioned the liability in CIT (A) but the appeal was dismissed on 27.1.2011. On the application filed for rectification of erroneous order, the Deputy Commissioner of Income Tax partly rectified the calculation of interest on the borrowed capital, leaving a net amount payable at Rs.59,02,911/- vide Annexure ‘B’. 4. The petitioner challenged the order CIT (A) through a statutory appeal before the Income Tax Appellate Tribunal which was heard partly from time to time but has been adjourned for hearing to 23.7.2013. On that date also, no progress was made and it is still pending adjudication. 5. It is further urged that along with the appeal filed before the appellate tribunal, the petitioner has filed an application seeking grant of stay of the order passed by the assessing authority dated 24.12.2010, the tribunal granted interim stay by an order dated 5.3.2012 vide Annexure ‘C’ for a limited period of 180 days and again on his similar application, the second 4 order was passed on 7.12.2012 vide Annexure ‘C1’, extending stay for a short period. Thereafter, the first respondent noticing the judgment of this Court opined that it has no legal competence to grant stay exceeding the period of 365 days and has thus declined to stay the operation of the order impugned in the appeal. 6. The grievance of the petitioner is if interim stay is not granted as sought for, staying the operation of assessment order, the appeal filed by him will become infructuous and will loose a valuable right. Therefore, the petitioner submits that till the disposal of the appeal, an interim order of stay be granted, staying operation of the order granted, imposing liability on him. 7. Learned counsel for the respondents, though was justified in contending that recovery proceedings be allowed to continue, as otherwise the State will suffer financially, yet, the State could not dispute that the petitioner has a statutory remedy of appeal 5 available to him. The State also could not dispute the petitioner has availed the benefit of appeal and it is pending decision before the appellate tribunal. Only the difficulty is the appellate tribunal has no legal competence to grant stay beyond the period of 365 days. As that period has elapsed, the tribunal has expressed its inability. In the circumstances, I am satisfied, the petitioner has no other alternative or efficacious remedy to seek relief under the writ jurisdiction of this Court. 7. It is also brought to the notice of this Court that in similar circumstances, this Court in W.P.No.3787-3788/2013 had granted interim stay while directing the tribunal to dispose of the appeal within a specified period. Consistency of consideration requires that the view taken by the co-ordinate Bench of this Court be honoured and in that view, I am satisfied that the petitioner shall succeed in his attempt. Writ petition is allowed directing the Income Tax Appellate Tribunal to take on board the appeal 6 preferred by the petitioner in Appeal No.ITA 144/2012 and to dispose of the same as expeditiously as possible within the outer limit of six weeks from the date of receipt of a copy of this order and till the disposal of that appeal, the first respondent is directed not to initiate any recovery proceedings against the petitioner. Sd/- JUDGE nas. "