M/s Zoom Developers Pvt. Ltd., Indore V. The ACIT, 1(2), Indore

ITSSA 85/IND/2012

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7484 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: S S DESHPANDE

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA , AM IT(SS)A NOS. 79 TO 85/IND/2012 A.YS.2003-04 TO TO 2008-09 ZOOM DEVELOPERS PVT. LTD INDORE PAN AAAC2-0532D :: APPELLANT VS ACIT 1(2) INDORE :: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI KESHAV SAXENA DATE OF HEARING 9 .05.2012 DATE OF PRONOUNCEMENT 1 0 .05.2012 O R D E R PER R.C. SHARMA, AM THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DATED 19.12.2011FOR THE ASSESSMENT YEARS 2003-04 TO 2009-10. 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THESE APPE ALS PERTAINS TO THE DECISION OF THE COMMISSIONER OF INC OME TAX (APPEALS) IN HOLDING THAT THE APPEALS FILED BY THE ASSESSEE ARE NOT MAINTAINABLE IN VIEW OF THE FACT T HAT THE ASSESSEE HAS NOT PAID THE TAXES ON THE INCOME RETUR NED BY IT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS, IN BRIEF, ARE THAT THERE WAS SE ARCH AT THE ASSESSEES BUSINESS PREMISES. DURING THE COURS E OF SEARCH, THE ASSESSEE DECLARED INCOME OF RS. 105 CR ORES. HOWEVER, AS AGAINST THE RETURNED INCOME OF RS.124,84,99,836/-, THE INCOME WAS ASSESSED AT RS. 197,66,99,050/-. AGAINST THESE ASSESSMENTS, THE ASSESSEE PREFERRED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WHO OBSERVED THAT SINCE THE ASSESSEE HAS FAILED TO PAY TAX DUE ON THE INCOME RETURNED BY HIM, THE APPEALS ARE NOT MAINTAINABLE U /S 249(4)((A) OF THE ACT. NOW THE ASSESSEE IS BEFORE US. 3 4. IT WAS CONTENDED BY THE LD.COUNSEL FOR THE ASSES SEE, SHRI S.S. DESHPANDE, THAT AS PER THE RETURN FOR THE ASSESSMENT YEAR 2010-11 FILED BY THE ASSESSEE ON 15.10.2010, THERE IS A REFUND DUE OF RS. 8,64,26,31 2/- WHICH SHOULD HAVE BEEN ADJUSTED AGAINST THE TAX DUE FOR THE ASSESSMENT YEARS 2007-08, 2009-10 AND 2008-09. HE FURTHER SUBMITTED THAT AS ALL THE BANK ACCOUNTS OF THE ASSESSEE HAVE BEEN FREEZED BY THE DEPARTMENT AND AL L THE PROPERTIES OF THE ASSESSEE WERE SEIZED AND THE DEBT ORS HAVE ALSO BEEN ISSUED LETTERS BY THE DEPARTMENT U/S 266(3) FOR PAYMENT OF THEIR DUES DIRECTLY TO THE DEPARTMENT, THE ASSESSEE IS NOT IN A POSITION TO PA Y THE TAXES. OUR ATTENTION WAS DRAWN TO THE LETTER DATED 9.9.2011 ISSUED BY THE ACIT U/S 226(3) TO THE DEBTO R OF THE ASSESSEE CHIEF ENGINEER (ROADS), PUBLIC WORKS DEPARTMENT, CHANDIGARH, FOR PAYMENT OF RS. 48.87 CRORES DUE FROM THE ASSESSEE. OUR ATTENTION WAS AL SO INVITED TO LETTER DATED 2.11.2011 ISSUED BY THE ACI T U/S 226(3) TO THE EXECUTIVE ENGINEER, PWD, KETHAL, FOR 4 PAYMENT OF RS. 48.87 CRORES DUE FROM M/S ZOOM DEVELOPERS PRIVATE LIMITED. IN THESE CIRCUMSTANCES , HE REQUESTED THAT THE COMMISSIONER OF INCOME TAX (APPE ALS) BE DIRECTED TO ACCEPT THE APPEALS FOR ADJUDICATION ON MERITS BY ADJUSTING THE TAX REFUND DUE TO THE ASSES SEE FOR THE ASSESSMENT YEAR 2010-11, THE BALANCES AVAI LABLE IN THE BANK ACCOUNTS SO FREEZED BY THE DEPARTMENT A ND PROCEEDS, IF ANY, RECOVERED DIRECTLY FROM THE DEBTO RS. 5. ON THE OTHER HAND, THE LEARNED CIT DR, SHRI KESH AV SAXENA, VEHEMENTLY ARGUED THAT AS PER THE MANDATORY PROVISIONS OF SECTION 249(4)(A) OF THE ACT, THE ASS ESSEE IS BOUND TO PAY THE TAX DUE ON THE RETURNED INCOME BEF ORE FILING THE APPEAL AND INSOFAR AS THE ASSESSEE IS UN ABLE TO PAY THE SAME, THE COMMISSIONER OF INCOME TAX (APPEA LS) WAS PERFECTLY JUSTIFIED IN DISMISSING THE APPEALS O N THE GROUND OF ITS MAINTAINABILITY. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW 5 AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED BY THE LEARNED CIT DR AND THE LD.COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. THERE IS NO DENIAL OF THE LEGAL PROPOSITION THAT UNLESS DUE TAXES ON T HE RETURNED INCOME ARE DEPOSITED, THE APPEALS ARE NOT MAINTAINABLE BEFORE THE CIT(A) U/S 249(4)(A). WE F IND THAT AS PER THE RETURN FOR THE ASSESSMENT YEAR 2010 -11 FILED BY THE ASSESSEE ON 5.10.2010, THERE IS A TAX REFUND OF RS. 8.64 CRORES AND ALSO INTEREST THEREON. ALL T HE APPEALS UNDER CONSIDERATION WERE FILED ON 25.1.2011 . THUS, AS ON THE DATE OF FILING OF THESE APPEALS, TH E REFUND WAS DUE TO THE ASSESSEE FOR WHICH HE IS ENTITLED TO ASK FOR ADJUSTMENT AGAINST ANY TAX DEMAND AGAINST HIM. IF T HE DEPARTMENT PROCEEDS TO ADJUST THE TAX DEMAND FOR TH E ASSESSMENT YEARS 2007-08, 2009-10 AND 2008-09 AGAINST THE REFUND DUE, WE FIND THAT IT WILL SATISF Y THE FULL TAX DEMAND FOR THE ASSESSMENT YEARS 2007-08 AND 200 9- 10 AND AT LEAST 40% OF THE DEMAND 6 FOR THE ASSESSMENT YEAR 2008-09. THUS, AFTER ADJUST MENT OF THE SAID REFUND, THERE DOES NOT REMAIN ANY TAX DEMAND OUTSTANDING IN TERMS OF SECTION 249(4)(A) FO R THE ASSESSMENT YEARS 2007-08 AND 2009-10. ACCORDINGLY, WE DIRECT THE DEPARTMENT TO ADJUST THE TAX REFUND DUE TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11 AGAINST TH E DEMAND FOR THE ASSESSMENT YEARS 2007-08 AND 2009-10 AND THE COMMISSIONER OF INCOME TAX (APPEALS) IS DIRECTED TO ADMIT THE APPEALS FOR ASSESSMENT YEARS 2007- 08 AND 2009-10 AND DECIDE THE SAME ON MERITS. IN RESPECT OF TAX DEMAND FOR THE ASSESSMENT YEAR 2008- 09 AS THE REFUND IS ABLE TO SATISFY THE DEMAND ONLY TO THE EXTENT OF 40%, KEEPING IN VIEW THE FACT THAT ALL TH E BANK ACCOUNTS OF THE ASSESSEE HAVE ALREADY BEEN ATTACHED BY THE DEPARTMENT AND LETTERS HAVE ALREADY BEEN ISSUED TO THE DEBTORS U/S 226(3), IN THE INTEREST OF JUSTICE, WE DIRECT THE COMMISSIONER OF INCOME TAX (APPEALS) TO GIVE AT LEAST A MONTH TIME TO THE ASSESSEE TO PAY THE BA LANCE AMOUNT. IF PRIOR TO IT, THE DEPARTMENT IS ABLE TO COLLECT 7 THE AMOUNT DIRECTLY FROM THE DEBTORS OR THE ASSESSE ES BANK ACCOUNT, THE SAME MAY BE ADJUSTED AGAINST THE DEMAND FOR THE ASSESSMENT YEAR 2008-09 AND AFTER DU E PAYMENT OF TAXES AS PROVIDED U/S 249(4)((A) OF THE ACT, THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 MAY BE UNDERTAKEN FOR DECIDING THE SAME ON MERITS. WE DIRE CT ACCORDINGLY. 7. THE APPEALS FOR OTHER ASSESSMENT YEARS ARE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. THE SA ME ARE, THEREFORE, DISMISSED AS WITHDRAWN. 8. IN THE RESULT, THE APPEALS ARE PARTLY ALLOWED IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN OPEN COURT ON 10 TH MAY, 2012 SD SD (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER 10 TH MAY, 2012 8 DN/-