Teleradiology Solutions Pvt. Ltd. V. Dy. Commissioner of Income Tax Circle-12(4) and Commissioner of Income Tax-VII and Commissioner of Income Tax (Appeals)-III

WP/12952/2015

AI Insights

The case involves M/s Teleradiology Solutions Pvt. Ltd., which filed a writ petition against the Deputy Commissioner of Income Tax and other respondents, seeking a directive for the Commissioner of Income Tax (Appeals)-III to consider their stay application regarding a demand notice issued under Section 156 of the Income Tax Act, 1961. The petitioner, engaged in medical transcription services, had claimed a deduction under Section 10A of the Act for the assessment year 2011-12, which was disallowed, leading to a demand notice. The petitioner appealed against this decision and sought a stay on the demand, which was initially rejected by the Assessing Officer. The High Court's decision emphasized the need for the appellate authority to address the stay application promptly and restrained the enforcement of the tax demand during the pendency of the stay application.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 804527 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 30-03-2015
• Assessment Year: misc
• Other Referred Cases: ITA Nos.1068/2008 c/w 108/2010
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: M V SESHACHALA; ARAVIND CHAVAN
• Keywords: Deduction under Section 10A; Income Tax; Re-assessment; Stay Application; Writ of Mandamus
• Section: 147; 143(3); 156; 10A; 220(6)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF MARCH, 2015 BEFORE THE HON’BLE MR.JUSTICE ARAVIND KUMAR WRIT PETITION NO.12952/2015 (T-IT) BETWEEN: M/S TELERADIOLOGY SOLUTIONS PVT. LTD., NO.7G1, VISHVESHWARAIAH INDUSTRIAL AREA ITPL ROAD, OPP. GRAPHITE INDIA BENGALURU-560 048 REP. BY ITS MANAGING DIRECTOR DR. SUNITA MAHESHWARI. ... PETITIONER (BY SRI M.V. SESHACHALA, SR. COUNSEL FOR FOR SRI. ARAVIND V. CHAVAN, ADVOCATES) AND: 1. DY. COMMISSIONER OF INCOME TAX CIRCLE-12(4), NO.14/3, 4TH FLOOR, RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BENGALURU-560 001. 2. COMMISSIONER OF INCOME TAX-VII C.R. BUILDING QUEENS ROAD BENGALURU-560 001. 3. COMMISSIONER OF INCOME TAX (APPEALS)-III C.R. BUILDING 2 QUEENS ROAD BENGALURU-560 001. …..RESPONDENTS (BY SRI. JEEVAN J NEERALGI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE R-3 TO CONSIDER THE STAY APPLICATION DATED 28.04.2014 VIDE ANNEXURE-E. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Heard Sri M.V.Seshachala, learned Sr.Counsel appearing on behalf of Sri Aravind V Chavan for petitioner and Sri Jeevan Neeralgi, learned panel counsel appearing for respondents. By consent of learned Advocates appearing for parties, writ petition is taken up for final disposal. 2. Petitioner is seeking for a writ of mandamus to direct third respondent to consider the application for stay dated 28.04.2014 (Annexure-E) and to restrain the respondents from initiating recovery proceedings pursuant to notice of demand dated 19.03.2014 3 (Annexure-C) issued under Section 156 of the Income Tax Act, 1961 (‘Act’ for short) during pendency of the appeal before third respondent. 3. Petitioner is carrying on the profession of providing services of medial transcription namely, analyzing transmission received of radiological patients images such as X-rays, CTs and MRIs by providing reports through the help of MRI radiologist, neuro- radiologist, pediatric radiologist or musculoskeletal radiologist. For the assessment year 2011-12 return of income came to be filed claiming deduction under Section 10A of the Act as claimed for the earlier assessment years by relying upon the Board’s notification dated 26.09.2000 (Annexure-A). Said return of income being selected for scrutiny under Section 143(3) of the Act, order of assessment came to be passed and deduction claimed under Section 10A of the Act was disallowed by order dated 19.03.2014 4 (Annexure-B) followed by issuance of demand notice dated 19.03.2014 (Annexure-C). 4. Assessee being aggrieved by the same has filed an appeal before CIT (Appeals) III – third respondent along with an application for stay of the demand vide Annexures-D and E respectively. In the meanwhile, assessee filed an application under Section 220(6) of the Act before the jurisdictional Assessing Officer to stay the demand. However, said application came to be rejected by the Assessing Officer by order dated 13.10.2014 (Annexure-F). Therefore, petitioner is before this Court seeking for a direction to CIT(Appeals) III – third respondent to dispose of the appeal and in the meanwhile seeking for stay of recovery of proceedings. 5. Sri Seshachala, learned Senior Counsel would contend that Assessing Officer having allowed the claim for deduction under Section 10A of the Act for earlier assessment years and also under the assessment order dated 30.11.2011 he could not have re-opened the 5 issue under Section 147 of the Act which is only a mere change of opinion and it amounts to review of the earlier assessment orders and same being without jurisdiction. He would reiterate the grounds urged in the writ petition to contend that issue of allowability of deduction under Section 10A of the Act is no more res integra in view of the law laid down by Division Bench of this Court in ITA Nos.1068/2008 c/w 108/2010 disposed of on 07.07.2014 and as such, re-opening is bad in law and hence he prays for allowing the writ petition. 6. Per contra, Sri Jeevan Neeralgi, learned Advocate appearing for respondent would contend that when the issue is pending before appellate authority and the prayer in this writ petition being sought for a direction to the appellate authority to consider application for stay filed by petitioner/appellant, this Court should not embark upon conducting an enquiry as to the correctness and legality of the assessment 6 order particularly when the CIT(Appeals) III is seized of the matter and as such he prays for dismissal of this writ petition. 7. Having heard the learned Advocates appearing for parties and on perusal of the case papers, it would indicate that the assessee being aggrieved by the assessment order has filed an appeal before CIT (Appeals) III – third respondent as evidenced from the appeal memorandum appended to the present writ petition which is at Annexure-D. An application for stay of re-assessment order has also been filed seeking for stay of the demand as evidenced from the stay application which is at Annexure-E. Hence, without going into the merits namely as to whether Assessing Officer was justified in disallowing the claim made by the assessee under Section 10A of the Act requires to be examined by CIT (Appeals) III in the facts and circumstances of the case and also taking into consideration the fact that CIT (Appeals) III is now 7 seized of the matter, this Court is of the considered view that ends of justice would be met if CIT (Appeals) III – third respondent is directed to dispose of the stay application that has been filed by the petitioner expeditiously within a time frame. 8. Since learned Sr.counsel appearing for petitioner has submitted that issue is no more res integra in view of the decision taken by the Division Bench in respect of allowability of deduction under Section 10A of the Act, this Court is of the considered view that impugned demand raised by the Assessing Officer pursuant to re-assessment order requires to be stayed till the application filed by petitioner before appellate authority – CIT (Appeals) III (Annexure-E) is disposed of. 9. For the reasons aforestated, I proceed to pass the following: ORDER (1) Writ petition is hereby allowed. 8 (2) Third respondent – CIT (Appeals)-III is directed to dispose of the stay application dated 28.04.2014 (Annexure-E) filed by the petitioner expeditiously, at any rate, within four weeks from the date of receipt of certified copy of this order. (3) During the pendency of adjudication of stay application by the CIT (Appeals) III as directed herein above, jurisdictional Assessing Officer namely, first respondent shall not enforce the demand or recover the tax as demanded by him in the assessment order dated 19.03.2014 (Annexure-B) for a period of four weeks or till disposal of the application for stay whichever is earlier. Ordered accordingly. Sd/- JUDGE *sp "