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Court No. - 32

Case :- WRIT TAX No. - 56 of 2015

Petitioner :- Jagran Prakashan Limited
Respondent :- The Deputy Commissioner Of Income Tax Tds And 2 Others
Counsel for Petitioner :- Ritvik Upadhya,V.K. Upadhya
Counsel for Respondent :- S.C. It

Hon'ble Tarun Agarwala,J.
Hon'ble Dr. Satish Chandra,J.

We have heard Sri V.K.Upadhya, the learned Senior Counsel assisted by Sri Ritvik Upadhya, the learned counsel for the petitioner and Sri Dhananjay Awasthi, the learned counsel for the department.

In an earlier round of litigation, the petitioner had questioned the initiation of the proceedings under Section 201/201(1A) of the Income Tax Act. This Court framed 12 issues, which were considered by the High Court. One such issue was, whether against a deductor who fails to deduct the tax at source, the liability of payment of tax can also be fastened against the deductor under Section 201 apart from liability of interest and penalty. The Court after considering the matter came to the conclusion that where the tax has not been deducted at source the petitioner could not be fastened for short deducted tax and, at best, was liable for interest and penalty only. After observing the above, the Division Bench of this Court quashed the assessment orders.

For the financial year 2011-12, notices were issued to the petitioner to show cause as to why the order under Section 201(1)/201(1A) should not be passed declaring the assessee in default. The Deputy Commissioner of Income Tax (TDS), respondent no.1 passed an order dated 31.03.2014 under Section 201(1) read with Section 201(1A) treating the petitioner in default for a sum of Rs. 38,78,72,323/- including a sum of Rs. 31,27,67,751/- towards short deducted tax and interest amount of Rs. 7,51,04,572/-. The petitioner, being aggrieved by this order, has filed an appeal before the Commissioner of Income Tax (Appeals), where the matter is pending consideration. The petitioner also filed an application for early hearing of the appeal, which has remained pending. The petitioner filed two rectification applications under Section 154 of the Act, which was disposed of by orders dated 11.07.2014 and 31.12.2014, whereby the applications were allowed in part and the demand has now been reduced to Rs. 12,76,85,755/-.

After the reduction of demand, the petitioner also filed a stay application before the appellate authority, which was disposed of directing the petitioner to approach the Assessing Officer under Section 220(6) of the Act. The petitioner, consequently, moved a stay application, which was rejected by the Deputy Commissioner of Income Tax (TDS) Kanpur by an order dated 19.01.2015.

The petitioner, being aggrieved, has filed the present writ petition contending that when the issue with regard to deduction of tax has already been decided in the earlier round of litigation by the writ Court, there was no occasion for the authorities to demand the short deducted tax from the petitioner and the petitioner at best was liable to pay interest, if any.

Sri Dhananjay Awasthi, the learned counsel for the department has placed an order of the Deputy Commissioner of Income Tax (T & J), Kanpur dated 27.01.2015 directing the Commissioner of Income Tax (Appeals) to decide the appeal of the petitioner on a priority basis.

Considering the fact that this Court in an earlier round of litigation inter-se between the parties had decided certain issues and without prejudice to what the department may contend before the appellate authority, we dispose of the writ petition with the following directions:-

1. At present there is an outstanding demand of Rs.12,76,85,755/-, namely, the short deducted tax amounting to Rs.10,29,72,390/- and the interest component amounting to Rs.2,47,13,365/-.

2. We direct the petitioner to deposit the component of interest of Rs.2,47,13,365/- within two weeks from today.

3. Upon deposit, the Commissioner of Income Tax (Appeals)-respondent no.2 where the petitioner's appeal is pending would be decided on a priority basis within three months. The balance demand towards short deducted tax will remain stayed during the pendency of the appeal.

The writ petition is, accordingly, disposed of.

Order Date :- 29.1.2015

MAA/-

(Dr.Satish Chandra,J.) (Tarun Agarwala,J.)

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