BALAJI REFINERY Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Petitioner is a partnership firm engaged in the business of refining of goldbars, and is an assessee under the IT Act, on the rolls of the 1st respondent. On 15th Jan., 2009, a team led by the ITO from Palakkad conducted a search under s. 132 of the IT Act, 1961 in the premises of the petitioner. In the search, 4136.83 grams of gold was seized and Ext.P1 is the Panchanama prepared during the course of the search. Following the search and seizure, by Exts. P2 to P2(f) orders issued on31st Dec, 2010, assessment for the years 2003-04 to 2009-10 was completed under s. 153C of the IT Act. In these orders, it is also stated that penalty proceedings under s. 271(1)(c) of the IT Act are being initiated. Later the assessment orders for the asst. yrs. 2003-04 to 2006-07 were rectified as per Exts. P2(g) to P2(j). Case of the petitioner is that the liability under Ext. P2 series of orders was discharged by remitting the tax due as per Ext. P3 series of bank receipts. It is stated that they also filed Ext. P4 series of appeals against Ext. P2 series of orders, which are pending before the appellate authority, the 3rd respondent.

(2.) Subsequently, petitioner made Ext. P5 dt. 5th Aug 2009 requesting the 2nd respondent to return the gold since they have already paid the entire tax due under Ext. P2 series of orders. To that representation, they were given Ext. P6 reply requiring them to contact the AO. Subsequently. Ext. P7 dt. 18th Nov., 2011 was issued by the 1st respondent informing the petitioner that their request cannot be considered before the disposal of Ext. P4 series of appeals. It was in these circumstances, the writ petition was filed mainly contending that the petitioner having discharged the tax liability due under Ext. P2 series of orders, the pendency of Ext. P4 series of appeals filed by them cannot be a justification for the respondents for refusing to release the gold and appropriate orders are sought for.

(3.) A statement has been filed on behalf of the respondents, in which mainly three contentions are raised. First is that, as per Ext. P10 dt. 31stDec, 2010 and other similar notices issued under s. 271(1)(c) of the IT Act, penalty proceedings have already been initiated against the petitioner and that if penalty is Imposed, petitioner will have a liability between Rs. 14,72,494 and Rs. 44,17,482. It is also contended that subsequent to the issuance of the penalty notices, the assessment orders for the years 2005-06 to 2008-09 were again rectified by Ext. P8 series oforders issued on 19th Jan., 2012. Thirdly, it is contended that the petitioner has an interest liability, the total of which is Rs. 34,129 in terms of the provisions contained under s. 220(2) of the IT Act.