SUNNY AND SUNNYS BUSINESS VENTURES PVT. LTD. Vs. THE JOINT COMMISSIONER OF INCOME TAX, RANGE-4, I.S. PRESS ROAD, COCHIN

JUDGEMENT

(1.) IN respect of the assessment year 2009 -10, the petitioner filed return showing an annual income of Rs. 3,42,42,790/ - (Rupees three crores forty two lakhs forty two thousand seven ninety) attracting a tax liability of Rs. 1,18,78,606/ -(Rupees one crore eighteen lakhs seventy eight thousand six hundred and six), which is stated as satisfied. However, the assessing authority, being dissatisfied, proceeded with further steps and passed Ext. P1 order re -fixing the annual income as Rs. 7,98,33,274/ -(Rupees seven crores ninety eight lakhs thirty three thousand two hundred and seventy four), casting a much higher burden of tax which made the petitioner to challenge the same by filing Ext. P2 appeal along with Ext. P3 petition for stay before the appellate authority. Though the petitioner approached the concerned authority by filing a petition under Section 220(6) of the Income Tax Act, the petitioner was directed to satisfy 50% of the balance amount, for a declaration that the petitioner will not be treated as a defaulter in respect of the balance as borne by Ext. P4. This made the petitioner to approach this Court by filing W.P.(C). No. 8956/2012, which was disposed as per Ext. P8 dated 12.3.2012, directing the petitioner to file an I.A. for stay and to have it considered accordingly. The petitioner filed Ext. P9 application for stay before the appellate authority, wherein Ext. P10 order was passed on 3.5.2012, whereby the petitioner has been directed to satisfy 50% of the liability by way of '5' equated monthly installments (after giving credit to the amount already satisfied) which made the petitioner to approach this Court by filing the present writ petition.

(2.) SRI . G. Shrikumar, the learned Sr. Counsel appearing for the petitioner submits that the petitioner is entitled to have the benefit of absolute stay in view of the Circular bearing No. 334 (F. No. 400/3/81 -ITCO) dated 3.4.1982 issued by the Central Board of Direct Taxes, wherein it has been stipulated that, where the income determined on assessment is substantially higher than the returned income, say, twice the latter amount or more, the collection of tax in dispute should be held in abeyance till the decision on that case, provided there is no lapse on the part of the assessee. Reliance is also placed on the decision rendered by the Allahabad High Court as borne by Ext. P7 in this regard.

(3.) ON going through the materials on record, it is seen that, the issue is more with regard to the quantum and the so called materials sought to be relied on by the department to arrive at the figures in Ext. P1, which is more than double the amount returned by the petitioner. On going through the grounds of appeal and the nature of challenge projected before the appellate authority, it is seen from Ext. P10 interim order passed by the appellate authority granting the stay, that nothing is discussed with regard to the merits of the case, in view of the observation in paragraph '5' of the order in the following terms: