Oil and Natural Gas Corporation Ltd. V. The Additional Commissioner of Income-Tax, Range-1, Dehradun and Another Respondent

WPMS/575/2008

AI Insights

The case involves the Oil and Natural Gas Corporation Ltd. (ONGC) challenging a notice of demand for Rs. 17,68,49,42,658 for the assessment year 2007-08 issued under Section 156 of the Income Tax Act, 1961. The petitioner sought a writ of mandamus to prevent the recovery of the demand until the disposal of their appeal by the CIT (A) and to extend the time limit for deposit of the outstanding demand. The High Court of Uttarakhand at Nainital heard the arguments and decided that the petitioner could seek a stay of recovery from the Assessing Authority, emphasizing the need to follow the procedural requirements under Section 220(6) of the Income Tax Act.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 807952 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 22-04-2008
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARVIND VASHIST
• Assessee Lawyers: L P NAITHANI; AJAY VOHRA
• Keywords: Certiorari; Certiorari; Income Tax; Mandamus; Notice of demand; Stay of recovery
• Section: 156; 220(6)

Judgement Text

" IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 575 of 2008 (M/S) Oil and Natural Gas Corporation Ltd., Tel Bhawan, Dehradun-248 003. …… Petitioner. Versus The Additional Commissioner of Income-Tax, Range-1, Asykar Bhawan, Subhash Road, Dehradun and another. … Respondents. Sri L.P.Naithani, Senior Advocate, assisted by Ajay Vohra, learned counsel for the petitioner. Sri Arvind Vashist, learned Standing Counsel for the Income Tax Department- respondents. Date April 22, 2008. Hon’ble B.S.Verma, J. Heard Sri L.P.Naithani, Senior Advocate, assisted by Sri Ajay Vohra, learned counsel for the petitioner and Sri Arvind Vashist, learned Standing Counsel for the Income Tax Department and perused the record. This writ petition has been filed for the following reliefs:- (a) To issue a writ in the nature of mandamus directing the respondents not to recover the demand of Rs. 17,68,49,42,658/- for the assessment year 2007-08, raised as per notice of demand dated 25-3-2008 issued under Section 156 of the Income Tax Act till the disposal of the appeal by CIT (A) (Annexure No. 2 to the writ petition). (b) To issue writ in the nature of mandamus directing the respondents to extend the time limit for deposit of the whole of the outstanding demand until the expiry of 30 days from the date of receipt of notice of demand. (B-1) To issue a writ in the nature of certiorari to quash the orders dated 26-3-2008 and 27-3-2008 passed by respondent nos. 1 and 2. 2 (c) Such other order or orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case. Briefly stated, by the present writ petition, the petitioner seeks quashing of the notice of demand prior to filing the appeal against the order dated 25-3-2008 (Annexure No.1 to the writ petition) passed by the Assessing Authority. On the basis of assessment order, notice of demand under Section 156 of the Income Tax Act, 1961 (for short the Act) was issued on 25-3-2008 by Additional Commissioner of Income Tax, Range 1, Dehradun, whereby the petitioner was directed to pay the amount of Rs. 10000000000/- ( Rs. One thousand Crores) till 31-3-2008 and rest of the amount within 30 days, which is provided for filing the appeal. This order dated 25-3-2008 (Annexure No.2) was amended by the Assessing Authority on 2-4-2008, whereby para no. 2 of the notice of demand under Section 156 was amended and it was substituted as “The amount should be paid to the Manager, Authorized bank/State of India/Reserved Bank of India at Dehradun within 30 days of the service of this notice” for the words “the amount 10000000000/- should be paid by 31.03.2008 and balance demand of Rs. 7684942658/- within 30 days of the service of this notice.” On 21.4.2008, Supplementary Affidavit has been filed by the petitioner and it has been mentioned in para 5, it has been stated “that on 17.4.2008, the petitioner has filed an appeal against the order dated 25.3.2008 passed by the assessing officer before the Commissioner of Income-tax (Appeal)-I, Aaykar Bhavan, Dehradun. A copy of Form No. 35, Grounds of Appeal filed before CIT(A) along with acknowledgement is annexed hereto and marked as Annexure ‘SA-1’ to this affidavit. It was further prayed for stay of entire disputed outstanding demand of Rs. 1,768.49 crores, pending disposal of the appeal by the CIT(A). 3 Sub-Section (6) of Section 220 of the Act provides as under:- “(6) Where an assessee has presented an appeal under section 246 or section 246A the Assessing Officer may, in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of.” It is pertinent to mention here that the petitioner had also filed applications for stay of recovery prior to filing of appeal before the Assessing Authority as well as CIT (Administration). The applications have been rejected on 26-3-2008 and 27-3-2008. According to the petitioners, the orders are not speaking orders. Section 220(6) of the Act provides for stay of recovery after filing the appeal. The applications were filed by the petitioner before filing the appeal. It is not disputed that the appeal has been filed on 17-4-2008. In the circumstances of the case, it is provided that if application for stay of recovery is moved by the petitioner before the Assessing Authority, the earlier orders dated 26-3-2008 and 27- 3-2008 (Annexure Nos. 4 and 6 respectively) shall not come in the way of Assessing Authority, who shall decide the application for stay of recovery under Section 220(6) of the Act in accordance with law and the binding circulars. With the above observation, the writ petition is disposed of. ( B.S.Verma, J. ) RCP 4 5 "