Janahitha Credit Co-operative Society Limited V. The Income Tax Officer Ward 6(2)(3) and The Additional Commissioner of Income Tax Range 6(2) and The Commissioner of Income Tax (Appeals)-VI Bangalore and The Commissioner Income Tax-Bangalore

WP/44621/2015

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The case involves M/s Janahitha Credit Co-operative Society Limited, which challenged an interim order by the Tax Recovery Officer requiring the society to pay 50% of a tax demand raised for the assessment year 2012-13. The society had appealed against an assessment order under Section 143(3) of the Income Tax Act, 1961, which had raised a demand of \'31,69,230. The society sought a stay on the payment of this demand pending the disposal of their appeal. The court examined the provisions of Section 225(1) of the Income Tax Act, 1961, which allows the Tax Recovery Officer to grant time for tax payment but does not empower him to grant a blanket stay on the tax demand.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 793983 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-11-2015
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: BALRAM RAO
• Keywords: Appeal; Assessment Order; Income Tax; Stay of demand; Tax Recovery Officer
• Section: 143(3); 226; 227; 225

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF NOVEMBER 2015 BEFORE THE HON’BLE MR. JUSTICE RAM MOHAN REDDY WRIT PETITION NO. 44621 OF 2015 (T-IT) BETWEEN: M/S JANAHITHA CREDIT CO-OPERATIVE SOCIETY LIMITED NO.53, 10TH CROSS, 2ND MAIN ROAD, WOC ROAD, 2ND STAGE, MAHALAKSHMIPURAM, BANGALORE-560086. REPRESENTED BY ITS SECRETARY SRI. M.P. RANGANATHAPPA, AGED ABOUT 55 YEARS, S/O LATE M.S.PUTTAKAMAIAH. ... PETITIONER (By Sri. BALRAM R RAO, ADV.,) AND 1. THE INCOME TAX OFFICER WARD 6(2)(3) 3RD FLOOR, JEEVAN SAMPIGE, NO.1/1, SAMPIGE ROAD, BANGALORE-560003. 2. THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 6(2), 3RD FLOOR, JEEVAN SAMPIGE, NO.1/1, SAMPIGE ROAD, BANGALORE-560003. 3. THE COMMISSIONER OF INCOME TAX (APPEALS)-VI BANGALORE, 3RD FLOOR, HMT BHAVAN, 2 59, BELLARY ROAD, GANGANGAR, BANGALORE-560032. 4. THE COMMISSIONER INCOME TAX-BANGALORE R NO.A-123, CENTRAL REVENUE BUILDING, NO.1 QUEENS ROAD, BANGALORE-560001. ... RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE INTERIM ORDER DTD.1.10.2015 PASSED BY THE R-2 VIDE ANNEX-E. DIRECT THE R-3 TO DISPOSE OF THE APPEAL IN ITA.NO.79/CIT[A]-6/2015-16. DIRECT THE R-1 NOT TO ENFORCE THE PAYMENT OF THE OUTSTANDING DEMAND CONSEQUENT TO THE ASSESSMENT ORDER DTD.18.3.2015 PASSED UNDER SECTION 143[3] OF THE INCOME TAX ACT 1961 IN ANNEX-A UNTIL THE DISPOSAL OF THE APPEAL IN ITA.NO.79/CIT[A]-6/2015-16. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Petitioner having suffered an order under Section 143(3) for the assessment year 2012-13 raising demand for `31,69,230/-, preferred an appeal before the Commissioner for Income Tax (Appeals)-6, Bengaluru, and filed an application dated. 09.09.2015 invoking Section 225 of the Income Tax Act, 1961, before the Tax Recovery Officer for stay of the aforesaid demand, which when considered by the Joint Commissioner of Income 3 Tax, Range-6(2), Bengaluru, by order dated 01.10.2015, Annexure-E, directed the petitioner to pay 50% of the total of demand i.e., `15,84,600/- in installments and directed stay of the demand for the balance i.e., `15,84,600/- until 15.03.2016 or disposal of the appeal before the CIT(A), whichever is earlier. Petitioner aggrieved by the order, Annexure-E, has presented this petition to quash the said order and to direct the CIT (A) to dispose of the appeals at the earliest, in addition to a direction to the Assessing Officer not to enforce the payment of the outstanding demand consequent to the Assessment Order dated 18.03.2015 until disposal of the appeal. 2. Although learned counsel for petitioner submits that Section 225(1) invests a jurisdiction in the Tax Recovery Officer to grant a blanket stay of the entire demand the submission is noticed only to be rejected. 3. For better understanding of Section 225(1), it is useful to extract the said provision, which reads thus: 4 “225(1) It shall be lawful for the Tax Recovery Officer to grant time for the payment of any tax and when he does so, he shall stay the proceedings for the recovery of such tax until the expiry of the time so granted.” 4. The order, Annexure-E cannot be said to be either arbitrary or illegal calling for interference in exercise of supervisory jurisdiction under Article 227 of the Constitution. In the facts and circumstances, no exception can be taken to the order impugned. Petition devoid of merit is rejected. Sd/- JUDGE kcm "