KOOCHIE PLAY SYSTEMS PVT LTD V. UNION OF INDIA

WP/45985/2017

AI Insights

Koochie Play Systems Pvt. Ltd. filed a writ petition against the Union of India and other respondents, seeking to prevent the enforcement of a recovery order dated 15.3.2016 by the Deputy Commissioner of Income Tax until the appeal (ITA 146) before the Commissioner of Income Tax (Appeals) was resolved. The petitioner argued that the recovery was based on arbitrary additions to their declared income. The court noted that an interim stay had been granted by the Joint Commissioner of Income Tax, subject to the payment of 15% of the demand, which the petitioner failed to pay. The court decided that the lower authorities should await the decision on the stay applications before taking further action.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 763838 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-10-2017
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: AKSHAY
• Keywords: Coercive Action; Disputed Demand; Income Tax; Mandamus; Recovery of dues; Stay Application; Writ petition

Judgement Text

" 1/6 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 9TH DAY OF OCTOBER 2017 BEFORE THE HON'BLE Dr.JUSTICE VINEET KOTHARI WRIT PETITION NO.45985 OF 2017 (T-IT) BETWEEN: Koochie Play Systems Pvt. Ltd. No.23, 3rd Floor, Farah Winsford, 133 Infantry Road, Bengaluru 560 001 Rep. by its Authorized Representative Mr.Dinesh J. Ranka. …Petitioner (By:Mr.Akshay B.M., Advocate) AND: 1. Union of India Represented by its Secretary Ministry of Finance, Department of Revenue North Block, New Delhi 110 001. 2. Deputy Commissioner Income Tax Circle – 4 (1)(1), Darussalam Building Queens Road, Shivaji Nagar, Bengaluru, Karnataka 560 001. 3. Commissioner of Income Tax (Appeal)-9 Room No.545, BMTC Building 6th Block Koramangala Bengaluru, Karnataka 560095. 4. Principal Commissioner Income Tax Circle 4, BMTC Building, 80 Feet Road 6th Block Koramangala, Bengaluru 560 095. Date of Order 9-10-2017 W.P.No.45985/2017 Koochie Play Systems Pvt. Ltd. Vs. Union of India & Ors., 2/6 5. Income Tax Officer Ward 4(1)(2) Room No.219, 2nd Floor BMTC Building, 6th Block Koramangala Bengaluru 560095. …Respondents (By:Mr.Jeevan J. Neeralgi, Advocate) This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to direct the R2 and 5 not to enforce recovery of the dues confirmed vide Order dated 15.3.2016 passed by the R2 till disposal of the appeal No.ITA 146 before the R3 Annexure-F and etc. This W.P. coming on for preliminary hearing this day, the Court made the following:- ORDER Mr.Akshay B.M., Adv. for Petitioner Mr.Jeevan J. Neeralgi, Adv. for Respondents Petitioner-assessee has filed this writ petition with the following prayers:- “(a) Issue a writ in the nature of mandamus directing the Respondents No.2 and 5 not to enforce recovery of the dues confirmed vide order dated 15.03.2016 passed by the Respondent No.2 till disposal of the Appeal No.ITA 146 before the Respondent No.3, vide Annexure-F; (b) Issue a writ of mandamus to the Respondent No.3 to dispose of the appeal bearing No.ITA 146 pending before it expeditiously vide Annexure-H); Date of Order 9-10-2017 W.P.No.45985/2017 Koochie Play Systems Pvt. Ltd. Vs. Union of India & Ors., 3/6 (c) Grant such other order or direction as deemed Fit in the facts and circumstances of the case in the interest of justice; Interim prayer That for the reasons stated in the writ petition, it is further prayed that this Hon’ble Court be pleased to direct the Respondents to not initiate coercive action for recovering the demands involved during the pendency and till the disposal of the appeal by the First Appellate Authority, i.e. Respondent no.3 and the above numbered writ petition in the interest of justice when the matter is pending for consideration before the Tribunal and pass any such order in the facts and circumstances of the case.” 2. The only prayer made by learned counsel for the petitioner is that Respondent – Income Tax Department should not take the coercive action for recovery of disputed demand, which has been raised on account of highhanded and arbitrary additions made to the declared income of the petitioner-Company, atleast till the stay application filed by petitioner-assessee before the First Appellate Authority, viz., Commissioner of Income Tax (Appeals) and Principal Commissioner of Date of Order 9-10-2017 W.P.No.45985/2017 Koochie Play Systems Pvt. Ltd. Vs. Union of India & Ors., 4/6 Income Tax on administrative side is heard and disposed of by the said Authorities. 3. Learned counsel for the petitioner submits that stay application is coming up before Respondent No.3 – Commissioner of Income Tax (Appeals) on 17.10.2017. He also submits that another stay application filed before Respondent No.4 – Principal Commissioner of Income Tax, Circle-4, Bengaluru is not even yet taken up for hearing and in the circumstances, since, the lower Assessing Authority is pressing for payment of the disputed demand, the present petition is filed in this Court. 4. Mr.Jeevan J. Neeralgi, learned counsel for the Respondent-Department was directed to accept notice and copy of the petition has been supplied to him. 5. Mr.Jeevan Neeralgi, pointed out vide Annexure-J order dated 26.4.2016, that the Assessing Date of Order 9-10-2017 W.P.No.45985/2017 Koochie Play Systems Pvt. Ltd. Vs. Union of India & Ors., 5/6 Authority, viz., Joint Commissioner of Income Tax (OSD), Circle 4(1)(1), Bangalore himself has already granted an interim stay to the petitioner-assessee restraining the recovery subject to payment of 15% of the demand before 30.4.2016. 6. The assessee does not appear to have paid even this 15% of the disputed demand and has now approached this Court by way of present writ petition. 7. After hearing learned counsels, this Court is satisfied that the Respondent-Department’s lower Assessing Authorities in all fairness should await the disposal of relevant stay applications filed by the petitioner-assessee before the next higher Authorities, either on executive side the Respondent No.4–Principal Commissioner of Income Tax and/or First Appellate Authority, viz., Respondent No.3 – Commissioner of Income Tax. Taking recourse to the coercive process for the recovery even prior to the disposal of such stay Date of Order 9-10-2017 W.P.No.45985/2017 Koochie Play Systems Pvt. Ltd. Vs. Union of India & Ors., 6/6 applications has forced assessee to rush to this Court for such interim reliefs, which actually deserves to be considered by such concerned higher Authorities of the Department itself created under the provisions of Income Tax Act, 1961 after giving due and reasonable opportunity of hearing to the petitioner-assessee expeditiously and by a reasoned order. 8. Till such stay applications are disposed of by these concerned Authorities, the lower Assessing Authority shall not take any coercive measures for recovery of the disputed demand against the petitioner- assessee. With these observations and directions, the petition is disposed of. No costs. Sd/- JUDGE VGR "