SMT. USHA MURUGAN V. THE COMMISSIONER OF INCOME TAX KOTTAYAM

WA/491/2012

AI Insights

This Writ Appeal challenges the order of the learned Single Judge in R.P.No.177/2012, which required the appellant to pay 50% of the tax demand as a condition for stay against recovery for the assessment year 2008-09. The demand in question is approximately Rs.4 crores, related to disallowance of expenditure under Section 40A(ia) of the Income Tax Act due to non-deduction of tax at source on commission payments in the lottery business. The appellant argued that a similar issue for the preceding year had resulted in a stay with a lesser payment, which was granted by the Assessing Officer. The court, considering the ongoing disputes and the nature of the tax demands, modified the stay conditions but allowed the Department to proceed with recovery in other cases not covered by this appeal.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 755946 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-03-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: T M SREEDHARAN; NISHA JOHN; V P NARAYANAN; BOBY SEKHAR
• Keywords: Assessment Year 2008-09; Conditional stay; Income Tax; Stay order; Writ Appeal
• Section: 40a(ia)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH FRIDAY, THE 16TH DAY OF MARCH 2012/26TH PHALGUNA 1933 WA.No. 491 of 2012 () IN RP/177/2012 ------------------------------------- AGAINST THE ORDER/JUDGMENT IN RP.177/2012 DATED 06-03-2012 APPELLANT(S)/PETITIONER: ----------------------- SMT. USHA MURUGAN LEGAL HEIR OF LATE T.MURUGAN, M/S.MEENAKSHY LUCKY CENTRE Y.M.C.A ROAD, KOTTAYAM REPRESENTING THE DECEASED BY ADVS.SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN SMT.BOBY M.SEKHAR RESPONDENT(S)/RESPONDENTS: -------------------------- 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1 KOTTAYAM 2. THE COMMISSIONER OF INCOME TAX (APPEALS)-IV AYYAKKAR BHAVAN, I.S PRESS ROAD, COCHIN - 682 018 3. INDUSIND BANK LTD., KOTTAYAM BRANCH, REGENCY SQUARE, K.K. ROAD, COLLECTORATE P.O., KOTTAYAM - 686 002. 4. AXIS BANK, NO.LX 311, A2 CENTURY TOWERS, NEAR Y.W.C.A, KOTTAYAM - 686 001. 5. PUNJAB NATIONAL BANK, P.B. NO.135, SHANGRI-LA PLAZA, T.B. ROAD, KOTTAYAM - 686 001. 6. TAMIL NADU MERCHANTILE BANK LTD., CSI COMMERCIAL COMPLEX, BAKER JUNCTION, KOTTAYAM - 686 001. 7. CORPORATION BANK, KOTTAYAM BRANCH, VALAYIL BUILDING, SHASTRI ROAD, KOTTAYAM - 686 001. 8. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, PUBLIC LIBRARY BUILDING, SHASHTRY ROAD, KOTTAYAM. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX R7 BY MR.N.RAJAGOPALAN NAIR THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 16-03-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BABU MATHEW P. JOSEPH, JJ. .................................................................... W.A.No. 491 of 2012 .................................................................... Dated this the 16th day of March, 2012. J U D G M E N T Ramachandran Nair, J. This Writ Appeal is filed against the order of the learned Single Judge in R.P.No.177/2012 in WP(C) No.3724/2012 directing payment of 50% of the demand as condition for stay against recovery of tax for the assessment year 2008-09. The demand is around Rs.4 crores and the appeal filed against the same is pending before the first appellate authority. Learned Senior counsel appearing for the appellant submitted that the demand is attributable to disallowance of expenditure under Section 40A(ia) of the Income Tax Act on account of assessee's failure to deduct tax at source on commission payments in lottery business. Learned counsel submitted that appeal filed for the preceding year on the same issue also is pending and stay has been granted by the Assessing Officer on payment of Rs.20 lakhs. Having regard to the contentions raised, we feel conditional stay order can be modified by directing payment of W.A.No.491/2012 -2- Rs.50 lakhs instead of 50% ordered by the learned Single Judge on condition that the payment will be made on or before 30/03/2012. However, since the learned Standing Counsel submitted that demand for several other years and in respect of connected firms are pending against the appellant, which are not subject matter of this Writ Appeal, we leave it open to the Department to proceed for recovery in other cases limiting the stay granted by us under this judgment only for the demand of Rs.3,96,11,900/- for the year 2008-09 that too on condition of payment of Rs.50 lakhs. Recovery of demand for the year will remain stayed till 30/03/2012 and if Rs.50 lakhs is paid, recovery will remain stayed till disposal of the appeal by the CIT (Appeals). The CIT (Appeals) is directed to dispose of all pending appeals of the deceased assessee within a period of two months from the date of receipt of a copy of this judgment. This Writ Appeal is disposed of as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BABU MATHEW P. JOSEPH, JUDGE) jg "