HC asks I-T department not to take coercive action against Dishnet

The company owes an alleged outstanding amount of Rs 46 cr

The Madras High Court (HC) ordered the Income-Tax officials not to take coercive steps while recovering the liabilities from Dishnet Wireless Ltd, part of Aircel Ltd, in a dispute related to payment of an alleged outstanding amount of Rs 46.18 crore.

The order was issued on a writ petition filed by Dishnet, apprehending there may be coercive action for recovering around Rs 46.18 crore.

The I-T department issued a demand notice on January 2, 2014, stating the company's earlier appeal application was disposed of by the commissioner of Income Tax (Appeals)-VII with a direction to the company to pay the outstanding amount.

A single Judge in the Madras High Court disposed of the case last month, stating, “...respondents are directed to not to take any coercive steps for recovery against the petitioner, till the appeal time is exhausted. Thereafter, the respondents are at liberty to act in accordance with law for recovery of the amount as per the order of the appellate authority.”

While a mail sent to Aircel did not elicit a comment, sources close to the dispute said the company would file an appeal with the appellate tribunal in Chennai, as suggested by the court.

The company pointed out to the court though the time limit of 60 days to prefer an appeal from the date of passing of the impugned order is available to the I-T department, without waiting for the same, the respondents had proceeded to send a reminder to the petitioner on January 2, 2014, on payment.

Refuting this, counsel for I-T (Revenue) submitted that when the original authority had passed the order, it was not incumbent on the revenue authorities to keep the matter pending till the petitioner moves the appellate forum. Therefore, a mere intimation to the petitioner to pay the outstanding amount cannot be questioned in the law.

 

The order said that it is not in dispute that the original authority passed the assessment order on December 30, 2013, as against which, further appeal lies to the Income Tax Appellate Tribunal under Section 253 of the Act and the time for moving the Tribunal is 60 days from the date of receipt of a copy of the order. "As the appellate remedy is available to the petitioner, it could be accepted and the authority may thereafter proceed with the matter," stated the order.