Maa Chhinnmastika Cement & Ispat Pvt. Ltd. V. The Union of India through the Commissioner of Income Tax (TDS), Patna and Joint Commissioner of Income Tax, TDS Range-2, Ranchi and Income Tax Officer, TDS Ward, Ranchi and Commissioner of Income Tax (Appeals), Ranchi

WPC/4653/2019

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The case involves Maa Chhinnmastika Cement & Ispat Pvt. Ltd., which filed multiple writ petitions against the Union of India and its tax officers, challenging the rejection of their stay applications on tax demands for the financial years 2012-2013 to 2017-2018. The Income Tax Officer had rejected these applications on the grounds that the petitioner failed to pay 20% of the gross demand as required for filing a stay application. The petitioner approached the High Court directly due to an imminent attachment of their cash credit account by the Income Tax Department, despite the availability of a revision remedy under Section 264 of the Income Tax Act. The court declined to entertain the petitions on merits, directing the petitioner to first avail the alternative remedy and conditionally staying the attachment pending the outcome of the revision.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 797687 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 05-09-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: RAHUL LAMBA
• Assessee Lawyers: SUMEET GADODIA; AAKANSHA MITTAL
• Keywords: Alternative remedy; Attachment Order; Cash credit account; Stay of demand
• Section: 264

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T). No. 4653 of 2019 With I.A. No. 8488 of 2019 With W.P.(T). No. 4707 of 2019 With W.P.(T). No. 4708 of 2019 With W.P.(T). No. 4709 of 2019 With W.P.(T). No. 4682 of 2019 With I.A. No. 8490 of 2019 With W.P.(T). No.4683 of 2019 With I.A. No. 8487 of 2019 ------- Maa Chhinnmastika Cement & Ispat Pvt. Ltd. ..... … Petitioner (In all cases) -Versus- 1. The Union of India through the Commissioner of Income Tax (TDS), Patna. 2. Joint Commissioner of Income Tax, TDS Range-2, Ranchi. 3. Income Tax Officer, TDS Ward, Ranchi. 4. Commissioner of Income Tax (Appeals), Ranchi. ..…. … Respondents (In all cases) -------- CORAM : HON’BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE DEEPAK ROSHAN -------- For the Petitioner : M/s. Sumeet Gadodia, Aakansha Mittal, Advs. For the Respondents : Mr. Rahul Lamba, Advocate -------- 2/ 05.09.2019. In all these matters, the petitioner is aggrieved by the orders dated 08.04.2019, passed by the Income Tax Officer, TDS Ward, Ranchi, whereby the petitions for stay of demands for the financial years starting from F.Y. 2012-2013 to F.Y. 2017-2018, have been rejected by the Income Tax Officer, stating that the petitioner had not fulfilled the condition of payment of 20% of the gross demand before filing the stay application. -2- 2. Admittedly, against these orders revision lie before the Commissioner of Income Tax, under Section 264 of the Income Tax Act, and without availing this alternative remedy, the petitioner has moved directly before this Court. 3. The reason for moving directly before this Court is the letter dated 29th August, 2019, received by the petitioner from its banker, i.e., State Bank of India, SME Branch, Ranchi, in which, the petitioner has a cash credit account. The banker has informed the petitioner that Income Tax Department is taking steps for attachment of the cash credit account of the petitioner, and summon notice as ‘Assessee in default’, had been issued to the Chief Manager of the Bank. It is an admitted position that the attachment order of the cash credit account has also been issued on 24th June, 2019. 4. Since the petitioner has moved this Court directly, without availing the alternative remedy provided in the Act, we are not considering the arguments of the learned counsel for the petitioner on merits, which we keep open to be taken by the petitioner before the Commissioner of Income Tax. The petitioner must avail the alternative remedy by filing the revision / review against the orders dated 08.04.2019 issued by the Income Tax Officer, rejecting the petitions for stay of demand, filed by the petitioner. It is also an admitted fact that the demand notices have been challenged by the petitioner before the Appellate Authority and the appeals are still pending before the Appellate Authority. 5. Faced with the situation that we are not entertaining these writ petitions on merits, learned counsel for the petitioner made an offer before us, that 20% of the gross demand for all these assessment years shall be Rs. 60,65,465/-, out of which, the petitioner is ready to make the deposit of Rs.30,00,000/- for the purpose that the cash credit account of the petitioner may be released from attachment. It is pointed out by the learned counsel that in the circular dated 29.02.2016, and the subsequent circular dated 31st July, 2017 issued by the CBDT, under which, there is a provision for stay of the demand notice upon payment of 20% of the demand notice, there is also a provision for consideration of reduction of the percentage of the amount to be deposited, for staying the demand -3- notice. In the said circular, there is also provision for review of the order passed by the I.T.O., by the Commissioner of Income Tax. The petitioner shall file the revision / review petition before the Commissioner of Income Tax within a period of one week from today, for considering and the reduction of the percentage of the amount to be deposited, for staying the demand notices, and payment of the balance amount shall depend upon the final order on the review / revision petition, passed by the Commissioner. 6. In the facts of this case, the offer given by the learned counsel for the petitioner, prima facie, appear to be genuine to us, in view of the fact that the cash credit account of the petitioner has already been attached, which may be causing hindrance in the business of the petitioner. Accordingly, we direct the petitioner to make the deposit of Rs.30,00,000/- and upon the deposit of this amount, the attachment order dated 24.06.2019 attaching the cash credit account of the petitioner shall remain in abeyance, till the period one week, and if revision / review is filed against the order dated 08.04.2019 within the same period, the attachment order shall be guided by the final order passed by the Commissioner of Income Tax, on the revision / review application, and upon its compliance by the petitioner. 7. With the aforesaid directions, all these writ petitions are disposed of, directing the petitioner to avail the alternative remedy first. The pending Interlocutory Applications also stand disposed of. (H. C. Mishra, A.C.J.) (Deepak Roshan, J.) DS-BS/- "