KARTHIKA SILKS V. THE PRL.COMMISSIONER OF INCOME TAX

WP(MD)/5961/2020

AI Insights

The case involves Karthika Silks, a partnership firm, represented by its partner I. Kubendran, who filed a writ petition against the Principal Commissioner of Income Tax, Madurai, and the Income Tax Officer, Ward 2, Tirunelveli. The petition challenged an order and a subsequent attachment notice issued by the Income Tax Officer, which were claimed to be illegal, arbitrary, and unsustainable. The petitioner sought to quash these orders and requested that the collection of the demanded tax be held in abeyance until the appeal by the CIT (A), Madurai, was resolved. The court's decision was influenced by precedents that emphasized the need to consider the existence of a prima facie case, financial stringency, and the balance of convenience when deciding on stay petitions related to tax demands.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 672513 (HC-MADURAI)
• Appeal Type: Others
• Pronouncement Date: 18-02-2022
• Assessment Year: misc
• Other Referred Cases: Kannammal Vs. Income Tax Officer, Ward1(1), Tiruppur, M/s.Queen Agencies, Rep. by its Managing Director vs. The Assistant Commissioner of Income Tax (Circle-1), Karaikudi, Aiman Education and Welfare Society vs. National Faceless Appeal Centre and others
• Laws Referred To: Article 226 of The Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: N DILIP KUMAR
• Assessee Lawyers: T SELVAN
• Keywords: Balance of convenience; Bank attachments; Financial stringency; Income Tax; Stay Petition; Writ of Certiorarified Mandamus
• Section: ITBA/COM/F/17/2019-20/1024625723 (1); ITNS-27

Judgement Text

"WP (MD) No. 5961of 2020 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 18.02.2022 CORAM THE HONOURABLE MR. JUSTICE C.SARAVANAN Writ Petition (MD) No.5961of 2020 and W.M.P.(MD)No.5159 of 2020 Karthika Silks, 267/1, Rajapalayam Main Road, Sankarankovil - 627 756, Tenkasi District, A Partnership Firm, Rep. by its Partner I.Kubendran .. Petitioner Versus 1.The Principal Commissioner of Income Tax, O/o. The PCIT, Madurai - 1, Central Revenue Building, Bibikulam, Madurai - 625 002. 2.The Income Tax Officer, Ward 2, Income Tax Office, Nellai City Centre, Tiruchendur Road, Rahmath Nagar, Tirunelveli - 627 011. .. Respondents Petition filed under Article 226 of The Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the impugned order of the second respondent dated 04.02.2020 in DIN & Letter No.ITBA/COM/F/17/2019-20/1024625723 (1) and subsequent attachment notice dated 12.02.2020 in No.ITNS-27, quash the same as illegal, arbitrary and unsustainable and direct the second respondent to keep the collection of tax demanded in abeyance till the disposal of the appeal by the CIT (A), Madurai, and consequently, direct the second respondent to lift the bank attachments to enable the petitioner Firm to continue its bank operations. For Petitioner : Mr.T.Selvan For Respondents : Mr.N.Dilipkumar Senior Standing Counsel 1/3 https://hcservices.ecourts.gov.in/hcservices/ WP (MD) No. 5961of 2020 ORDER Heard the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents. 2.There is no reason given in the impugned order for rejecting the revision filed by the petitioner. 3.The law on the subject has been clarified by this Court in Kannammal Vs. Income Tax Officer, Ward1(1), Tiruppur [W.P.No.3849 of 2019, dated 13.02.2019] reported in (2019) 413 ITR 390 (Mad), directing the authorities to consider trinity factors. The relevant portion of the said order reads as under:- ''12.The Circulars and Instructions as extracted above are in the nature of guidelines issued to assist the assessing authorities in the matter of grant of stay and cannot substitute or override the basic tenets to be followed in the consideration and disposal of stay petitions. The existence of a prima facie case for which some illustrations have been provided in the Circulars themselves, the financial stringency faced by an assessee and the balance of convenience in the matter constitute the trinity, so to say, and are indispensable in consideration of a stay petition by the authority. The Board has, while stating generally that the assessee shall be called upon to remit 20% of the disputed demand, granted ample discretion to the authority to either increase or decrease the quantum demanded based on the three vital factors to be taken into consideration.'' 4.The above view was also followed by the learned Single Judge of this Court in M/s.Queen Agencies, Rep. by its Managing Director vs. The Assistant Commissioner of Income Tax (Circle-1), Karaikudi and another [W.P.(MD)No.5550 of 2020, dated 08.04.2021] reported in CIT (2021) 18 ITR-OL 120 (Mad) and Aiman Education and Welfare Society vs. National Faceless Appeal Centre and others reported in 2021 (439) ITR 651 (Mad). 5.Considering the law settled by this Court, which have been referred to by this Court in M/s.Queen Agencies case [supra], the impugned order of the second respondent, dated 12.02.2020, is quashed and the case is remitted back to the first respondent to pass orders on merits and in accordance with law keeping note of the above decisions of this Court, within a period of four weeks from the date of receipt of a copy of this order. 2/3 https://hcservices.ecourts.gov.in/hcservices/ WP (MD) No. 5961of 2020 6.The Writ Petition is allowed with the above observation. No costs. Consequently, connected Miscellaneous Petition is closed. Sd/- Assistant Registrar (AD-II) // True Copy // / /2022 Sub Assistant Registrar(CS) smn2 To 1.The Principal Commissioner of Income Tax, O/o. The PCIT, Madurai - 1, Central Revenue Building, Bibikulam, Madurai - 625 002. 2.The Income Tax Officer, Ward 2, Income Tax Office, Nellai City Centre, Tiruchendur Road, Rahmath Nagar, Tirunelveli - 627 011. +2 CC to M/s.T.SELVAN, Advocate ( SR-7887[F] dated 22/02/2022 ) +1 CC to M/s.N.DILIPKUMAR, Advocate ( SR-7333[F] dated 21/02/2022 ) WP (MD) No.5961of 2020 18.02.2022 RJ(CO) KB(03.03.2022) 3P 6C 3/3 https://hcservices.ecourts.gov.in/hcservices/ "