Neuland Laboratories Limited V. The Deputy Commissioner of Income Tax Circle-16 (1), Range 16, Hyderabad

WP/6158/2011

AI Insights

M/s. Neuland Laboratories Limited, the petitioner, is a company involved in the manufacturing and marketing of bulk drugs. They contested a re-assessment notice issued by the Deputy Commissioner of Income Tax, which followed an initial assessment for the year 2004-2005. The initial assessment had allowed some deductions and made certain disallowances, which were partly contested and led to an appeal. The re-assessment notice was challenged on grounds of jurisdiction and financial inability to comply with the payment terms set by the tax authorities. The court, however, decided not to interfere with the ongoing assessment process and upheld the payment terms set by the second respondent, the Commissioner of Income Tax (Appeals).

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 796922 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 16-03-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Deductions; Financial Dispute; Income Tax; Re-assessment; Stay of collection
• Section: 147; 148; 143(3); 80HHC

Judgement Text

"THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.6158 of 2011 16.03.2011 Between: M/s.Neuland Laboratories Limited …. Petitioner AND The Deputy Commissioner of Income Tax Circle-16 (1), Range 16, Hyderabad, and others. … Respondents THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.6158 of 2011 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a company engaged in manufacturing and marketing of bulk drugs. They filed income tax return for the assessment year 2004-2005. The assessing officer passed orders under Section 143(3) of the Income Tax Act, 1961 (the Act, for brevity) on 29.12.2006 restricting deductions under Section 80HHC of the Act to Rs.40,19,504/- and making disallowance to a tune of Rs.12,33,387/-. The petitioner appealed before the Commissioner of Income Tax (Appeals). The same was allowed partly on 12.03.2008. Nonetheless, the first respondent – assessing officer, issued notice under Section 147 of the Act proposing to re-assess the income for the assessment year 2004-2005. The petitioner sought reasons and also filed objections thereto, which was rejected. The first respondent passed the re-assessment order on 30.12.2010. Aggrieved by which, the petitioner filed appeal before the CIT (Appeals), which is pending. The petitioner appears to have approached the second respondent for stay of collection of the disputed tax. By a communication dated 04.03.2011 the petitioner was informed that the second respondent, while staying the rest of the demand till 30.06.2011 or disposal of the appeal by the tribunal, had asked the petitioner to pay a sum of Rs.1,00,00,000/- (Rupees one crore only) by 31.03.2011 in two instalments, that is to say, an amount of Rs.50,00,000/- (Rupees fifty lakhs only) by 10.03.2011 and another sum of Rs.50,00,000/- (Rupees fifty lakhs only) by 25.03.2011. At that stage, the petitioner filed the instant writ petition assailing the notice issued by the first respondent under Section 148 of the Act proposing to re-assess the matter. The counsel for the petitioner made submissions touching upon the alleged inherent lack of jurisdiction in the first respondent to begin exercise for re-assessment. Having regard to the fact that, pursuant to the impugned notice for re-assessment, the petitioner has already submitted to the jurisdiction of the first respondent, who has already passed an assessment order which is at the stage of appeal, we are not inclined to exercise our discretion, however, strong the grounds urged in support of the writ petition. The counsel for petitioner submits that, due to financial unsoundness, the petitioner is not able to comply with the order of the second respondent, dated 04.03.2011. He would urge that time may be extended till 31.05.2011 so that the petitioner would pay an amount of Rs.25,00,000/- (Rupees twenty five lakhs only) by the end of this month, i.e., by 31.03.2011 and balance by the end of May, 2011. We are not able to countenance any such submission. The second respondent restricted the stay till 30.06.2011 or till disposal of the appeal by the CIT (Appeals). Therefore, we deem it proper to extend time till 15.04.2011 for payment as ordered by the second respondent. An amount of Rs.25,00,000/- (Rupees twenty five lakhs only) shall be paid on or before 31.03.2011, the balance (out of Rs.1,00,00,000/-) shall be paid on or before 15.04.2011, in default of which, it shall be open to set in motion the proceedings for collection of the tax in its entirety. We further record the submission of the Senior Standing Counsel for Income Tax that the appeal filed by the petitioner against the order, dated 30.12.2010 of the first respondent would be disposed of within a period of eight (8) weeks from the date of receipt of a copy of this order. We make it clear that none of the observations herein shall be taken as expression of any opinion on the merits of the case. The writ petition stands disposed of accordingly. No costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 16.03.2011 Pln "