Case Law Details
Ramasamy Rajkumar Vs PCIT (Madras High Court)
Introduction: The Madras High Court recently delivered a significant judgment in the case of Ramasamy Rajkumar vs. PCIT. The case revolved around a challenge to the order issued by the Principal Commercial of Income Tax-I, the Appellate Authority, requiring the petitioner to make a substantial deposit for pursuing an appeal. The petitioner contested the necessity of pre-depositing 20% of the tax amount, amounting to Rs. 47,89,456, stating that it was onerous, given the nature of their business. This article explores the key aspects of this judgment.
Detailed Analysis: The petitioner, engaged in the business of manufacturing handloom sarees with a turnover of only Rupees One Crore, found the 20% pre-deposit condition unreasonable, given their limited financial capacity. On the other hand, the Income Tax Officer argued that the petitioner had failed to file returns and had significant cash in their bank account. The Appellate Authority, in the impugned order dated 31.08.2023, directed the petitioner to pre-deposit 20% of the tax amount while granting a stay for the balance.
The High Court, after hearing both parties, considered the factual details of the case and recognized that the petitioner’s grievance centered on the conditional stay order requiring them to pay 20% of the demanded tax, which amounted to Rs. 47,89,456. Given the petitioner’s involvement in the handloom saree business, the court deemed this amount to be excessive. Consequently, the court directed the petitioner to deposit Rs. 10,00,000 within eight weeks, starting from the judgment date. Following this deposit, the Commissioner of Income Tax (Appeals) was directed to entertain the appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
