National Academy of Construction V. Assistant Director of Income Tax (Exemptions)-I

WP/27469/2013

AI Insights

The case involves the National Academy of Construction, which sought relief from the Income Tax Department regarding the immediate payment of tax demands for the Assessment Years 2008-09, 2009-10, and 2010-11. The petitioner argued that they had been diligent in paying their taxes and requested to continue paying the outstanding amounts in installments due to financial constraints. The Income Tax Department insisted on immediate payment of the full demands. The court examined the payments made by the petitioner and the financial hardships claimed, ultimately deciding to allow the petitioner to pay the outstanding amounts in three installments instead of the monthly installments requested.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 796368 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 30-09-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: PRADIP AGARWAL
• Keywords: Assessment Year; Income tax exemption; Instalment payment; Tax demand; TDS Adjustment
• Section: 11; 234B

Judgement Text

"THE HONOURABLE Ms. JUSTICE G. ROHINI AND THE HONOURABLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION No.27469 OF 2013 Date: 30.09.2013 Between: M/s. National Academy of Construction A society registered under the Andhra Pradesh (Telangana) Area Public Societies Act Having its registered office at NAC Campus Izzat Nagar Village, Kondapur Post Serilingampally Mandal Hyderabad Andhra Pradesh Rep. by its Director General Sri Pradip Kumar Agarwal …Petitioner And The Assistant Director of Income Tax (Exemptions)-I III Floor, Ayakar Bhavan Basheer Bagh Hyderabad …Respondent THE HONOURABLE Ms. JUSTICE G. ROHINI AND THE HONOURABLE SRI JUSTICE A.RAMALINGESWARA RAO WRIT PETITION No.27469 OF 2013 ORDER: (Per Hon’ble Ms. Justice G.Rohini) The petitioner filed his return for the Assessment Year 2010-11 claiming exemption under Section 11 of the Income Tax Act, 1961 (for short “The Act”). The assessment was completed vide order dated 28.03.2013 determining the tax payable as Rs.13,93,37,520/- and charging interest of Rs.3,68,83,460/- under Section 234B of the Act. The amounts payable by the petitioner towards the demand for the Assessment Years 2008-09 and 2009-10 were also due and on a request made by the petitioner, he was granted the facility of payment in instalments by order dated 23.07.2013 according to which the petitioner shall pay Rs.2 Crores by 31.07.2013 and continue to pay Rs.3 Crores per month starting from August 2013 to March 2014 till liquidation of entire demand together with interest on or before 25th of every month. It is claimed that the petitioner paid all the outstanding tax demanded upto the Assessment Year 2009-10, however for the month of August 2013 a request was made to grant exemption since the time left to mobilize the funds was very short. Even thereafter the petitioner paid Rs.2 Crores and another sum of Rs.5 Crores for the month of September by 05.09.2013. In spite of the same the 2nd respondent by letter dated 10.09.2013 directed the petitioner to pay the entire demand not only for the years 2008-09 and 2009-10 but also for the Assessment Year 2010-11 to be cleared on or before 20.09.2013. Aggrieved by the same the present writ petition is filed. It is contended by Sri S. Ravi, the learned Senior Counsel appearing for the petitioner that the impugned letter insisting upon the petitioner to pay the total tax demanded immediately is arbitrary and illegal since the petitioner is a bona fide tax payer and has been discharging its tax liability diligently. It is submitted by the learned Senior Counsel that the petitioner cleared the total outstanding demand for the Assessment Years 2008-09 and 2009-10 and even for the Assessment Year 2010-11 Rs.4.20 Crores was already paid and therefore for payment of the balance outstanding the respondent ought to have permitted the petitioner to pay in instalments. The learned Senior Counsel has placed before this Court the details of payments that were already made by the petitioner and submitted that the petitioner is ready and willing to pay the outstanding amount in monthly instalments of Rs.1 Crore each. In the counter-affidavit filed by the respondent it is stated that the petitioner has cleared Rs.6,96,68,760/, and the balance pending is Rs.6,96,68,760/. So far as the petitioner’s contention that for the Assessment Years 2012-13 and 2013-14 Rs.1.23 Crores and Rs.1.40 Crores respectively was deducted by way of TDS and if the same is adjusted towards the demand for the Assessment Year 2010-11 the balance payable would be only Rs.4.33 Crores is concerned, it is stated in the counter-affidavit that the TDS amounts cannot be adjusted towards the arrears of demand in respect of the Assessment Year 2010-11 and the petitioner’s contention is untenable. Having heard Sri J.V. Prasad, the learned Standing Counsel for the Income-tax Department appearing for the respondent and having perused the material available on record, we do not find any substance in the petitioner’s claim to grant credit for TDS of the Assessment Years 2012-13 and 2013-14. In the facts and circumstances of the case, we are also not inclined to accept the petitioner’s request to grant instalments @ Rs.1 Crore per month. However, having regard to the plea that the petitioner is facing serious financial hardship, we consider it appropriate to permit the petitioner to clear the entire outstanding amounts in three monthly instalments as under: 1) The first instalment of Rs.2 Crores shall be paid by 31.10.2013 2) The second instalment of Rs.2 Crores shall be paid by 30.11.2013; and 3) The entire balance payable shall be paid by 31.12.2013 The Writ Petition is accordingly disposed of. No costs. Consequently, miscellaneous petitions, if any, pending in this Writ Petition, shall stand closed. ____________ G.ROHINI, J ______________________________ A.RAMALINGESWARA RAO, J Date: 30.09.2013 Mva "