Balasubramanian Adityan vs The Principal Commissioner of Income-tax & Ors.

Heard Mr.V.S.Jayakumar, learned counsel for the petitioner and Mr.A.P.Srinivas, learned Senior Standing Counsel accepting notice on behalf

of the respondents. With the consent on either side, the writ petition is taken up for disposal.

The petitioner is the legal heir of Late B.Sivanthi Adityan and has challenged the order passed by the second respondent which is a giving effect

to order pursuant to an order of remand passed by the ITAT in an appeal filed by the petitioner against an order of assessment for the assessment

year 2007-2008. It may not be necessary for this Court to test the correctness of the impugned order as the petitioner has filed an appeal as

against the impugned order before the third respondent on 10.11.2017 and the same is pending. The reasons for approaching this Court at this

juncture is on account of the fact that on remand, the third respondent has given effect to the order of the Tribunal and while reducing the tax

liability has now issued a demand for a sum of Rs.12,96,70,400/- which also includes interest under Sections 234A, 234B and 234C of the

Income Tax Act, 1961 (hereinafter referred to as ""the Act""). It has to be seen as to whether the petitioner should be compelled to pay a portion of

the demand in terms of CBDT Circular for being entitled to an interim protection till the disposal of the appeal pending before the third respondent.

Protectively, the petitioner has also preferred a tax case appeal challenging the order passed by the ITAT dated 19.04.2017 in TC.SR.No.86314

of 2017 and the same is pending. It is submitted that the revenue is also in the process of filing an appeal against the order of the ITAT dated

19.04.2017.

The learned counsel for the petitioner submitted that as per the assessment order dated 30.03.2015, the net amount payable by the

deceased/assessee was determined at Rs.21,97,15,670/- and in the impugned order, the total amount payable by the deceased assessee has been

reduced to Rs.12,96,70,400/-. It is pointed out that though the tax payable by the petitioner has been reduced to a sum of Rs.9,11,79,633/- as

against the sum of Rs.10,92,46,392/- in the assessment order dated 30.03.2015, corresponding reduction in the interest under Sections 234A,

234B and 234C of the Act has not been granted. Furthermore, the learned counsel for the petitioner would contend that the levy of interest is

liable to be waived.

Thus, considering the above facts, it is seen that the petitioner has paid a sum of Rs.7,29,01,139/- if this payment is reckoned as against the

present tax demand of Rs.9,11,79,633/-, it would clearly show that the payment effected by the petitioner is nearly 85% of the tax demand. The

circular issued by the CBDT to the Assessing Officer''s/Commissioner of Appeals for regulating the procedure for grant of stay has directed that

20% of the disputed demand should be directed to be paid by the assessee before contesting the appeal. I find that in the instant case, the payment

effected by the petitioner is nearly 85% of the tax as demanded in the impugned order dated 17.10.2017.

The learned counsel for the revenue strenuously contended that the assessee should be directed to pay a portion of the remaining balance,

namely, Rs.12,96,70,400/-. However, I am not inclined to issue such a direction for two reasons. Firstly, there has been substantial reduction in

the demand of tax after the Tribunal remanded the matter. The correctness of such order is also now pending consideration before the third

respondent in an appeal filed by the petitioner. Secondly, the tax demand had been reduced, then it goes without saying that the demand of interest

also should correspondingly be reduced. But, I find that the interest charged under Sections 234A, 234B and 234C of the Act has remained the

same, i.e. both in the order of assessment dated 30.03.2015 and the impugned order dated 17.10.2017. Therefore, this aspect has to be looked

into and this can be canvassed by the assessee before the third respondent in the pending appeal. Even with regard to the demand of interest, the

petitioner has complied with the condition and 20% of the amount has already been collected by the department. Thus, I find that the interest of

revenue has been sufficiently safeguarded and the petitioner should be permitted to pursue their appeal without the second respondent insisting

upon any further payment pursuant to the impugned order dated 17.10.2017.

For the above reasons, while permitting the petitioner to canvass the correctness of the impugned order before the third respondent in the

pending appeal, there will be a direction to the respondents 2 and 3 not to insist upon any further payment of tax or interest as per the impugned

order dated 17.10.2017 till the appeal filed by the petitioner is heard and disposed of by the third respondent on merits and in accordance with

law, after affording an opportunity of personal hearing to the authorized representative of the petitioner. The third respondent is requested to

dispose of the appeal petition as expeditiously as possible, preferably within a period of four months from the date of receipt of copy of this order.

With the above direction, the writ petition is disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.