LAVANYA PROPERTY DEVELOPERS PRIVATE LTD BY ITS MANAGING DIRECTOR, N A VARATHARAAJAN Vs. ASSISTANT COMMISSIONER OF INCOME TAX; COMMISSIONER OF INCOME TAX (APPEALS); DEPUTY COMMISSIONER OF INCOME TAX; BRANCH MANAGER, CANARA BANK, RAILWAY JUNCTION BRANCH

JUDGEMENT

(1.) By consent, the writ petition is taken up for final disposal.

(2.) The prayer in the writ petition is to quash an order passed by the first respondent dated 10.07.2008 and the notice issued by the third respondent dated 14.10.2008 under Section 226(3) of the Income-tax Act and to forbear the first respondent herein from in any manner enforcing the demand of the tax pursuant to the assessment order dated 31.12.2007 for the assessment year 2005-2006 (previous year 2004-2005) till the disposal of the appeal preferred by the petitioner on 01.02.2008. The petitioner is a private limited company engaged in the business of property development. The petitioner's case was taken for scrutiny by the first respondent under Section 143(3) read with Section 14 of the Income-tax Act, on 31.12.2007 and a show cause notice was issued which did not allow the claim of the petitioner under Section 80(1)(B)(10) of the Act and proposed to disallow the claim of the petitioner towards cost of consturction. On receipt of the showcause notice, the petitioner submitted its reply claiming an exemption under Section 80(1)(B)(A) of the Act by stating that all the conditions under the said provision were fulfilled. The first respondent passed an order of assessment on 31.12.2007 disallowing the claim made by the petitioner under Section 80(1)(B)(10) of the Act, disallowing the cost of construction nad made a total aboave of Rs. 2,43,70,680 and on that basis computed tax demand at Rs. 84,58,911/-. Along with the order of assessment the first respondent, also issued a notice of demand under Section 156 of the Act calling upon the petitioner to pay amount assessed to tax within 30 days failing which recovery proceedings would be initiated under Sections 222 to 229, 231 and 232 of the Act . The petitioner preferred a statutory appeal on 01.02.2008 under Section 246A before the second respondent. The said appeal petition is pending. Learned senior Counsel while contending that the petitioner has got an excellent case on merits, made submissions has to how the order of assessment is not sustainable.