Case Law Details
Mahalakshmi Textile Mills Limited Vs DCIT (Madras High court)
Madras High Court held that as the petitioner company is wound up, however, intention of petitioner for clearing the pending dues is sincere. Writ petition is allowed permitting the petitioner to pay pending dues in equal installments.
Facts- The petitioner company had been wound up by orders in C.P.No.68 of 1985. The official liquidator had been appointed to take charge of the affairs of the company and as a result any legal proceeding initiated without impleading the official liquidator was non-est in the eye of law. Meanwhile, the respondent had passed an assessment order on 07.10.2022 demanding payment of Rs. 1,33,45,480/- u/s. 143(1)(a) of the Income Tax Act, 1961, for the assessment year 2021-2022, which is payable on or before 14.10.2022.
The petitioner, who was not in a position to repay this huge amount, had sent a representation dated 20.12.2022 requesting the respondent to permit him to pay the said sum in easy installments. However, respondent directed to pay sum in three instalments. The same was totally unworkable as far as the petitioner is concerned. Since the respondent was reluctant to accept the same, the petitioner has come forward with the above writ petition.
Conclusion- Admittedly, the petitioner company has been wound up and the entire affairs of the company now rest with the official liquidator. The petitioner company does not have any property, which can be easily sold to clear the dues of the respondent herein. However, the intent of the petitioner appears to be sincere despite the odds stacked against them.
Therefore, this Court is of the view that the petitioner must be permitted to show their bona fides and settle the dues. With this intent and in the interest of justice, the Writ Petition is allowed permitting the petitioner to pay the amount in installments. The calculation sheet provided by the respondent is taken as the calculation for the repayment of the amount.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The above writ petition has been filed for the issue of a Writ of Mandamus directing the respondent to permit the petitioner company to pay the sum of Rs.1,00,00,000/- in ten monthly installments of Rs.10,00,000/- each commencing from the month of April, 2023.
2. The petitioner company had been wound up by orders in C.P.No.68 of 1985. The official liquidator had been appointed to take charge of the affairs of the company and as a result any legal proceeding initiated without impleading the official liquidator was non-est in the eye of law. Meanwhile, the respondent had passed an assessment order on 07.10.2022 demanding payment of Rs. 1,33,45,480/- under Section 143(1)(a) of the Income Tax Act, 1961, (herein after referred to as Act) for the assessment year 2021-2022, which is payable on or before 14.10.2022.
3. The petitioner, who was not in a position to repay this huge amount, had sent a representation dated 20.12.2022 requesting the respondent to permit him to pay the said sum in easy installments. In response to the above letter, the petitioner, vide letter dated 29.12.2022, was directed to pay the above sum in three installments, which is as follows:-
“a) a sum of Rs.31,83,690/- was directed to be paid on or before 06.01.2022;
b)n a sum of Rs.50,00,000/- was directed to be paid on or before 31.01.2023; and
c) further a sum of Rs.50,00,000/- was directed to be paid on or before 28.02.2023;”
4. This was totally unworkable as far as the petitioner is concerned and on 20.01.2023, the petitioner had paid a sum of Rs.20,00,000/- and on 31.01.2023, a further sum of Rs.11,83,690/- had also been paid thereby clearing the first installment of Rs.31,83,690/-. With regard to the remaining amount of Rs. 1,00,00,000/-, the petitioner company was unable despite its best efforts to make 3/8 the payment on the due dates directed. Therefore, they have requested the respondent to receive a sum of Rs.1,00,00,000/- in 10 equated monthly installments commencing from April, 2024.
5. The petitioner would submit that the properties of the company are under litigation in execution proceedings and that apart, the petitioner did not have the resources to pay such a huge sum. Since the respondent was reluctant to accept the same, the petitioner has come forward with the above writ petition.
6. The learned counsel for the petitioner submitted a calculation memo showing the manner in which the outstanding was to be repaid by the petitioner to the Department.
7. The learned Standing Counsel for the respondent would submit that the respondent has already considered the request of the petitioner for payment in installments and had also granted the said installments and the respondent cannot once again grant further schedule of payment. However, without prejudice to their contentions, he has submitted a calculation sheet as detailed herein below:-
|
Particulars |
Amount |
Interest u/s 220(2) |
||
| Tax payable as per intimation u/s 143(1) dated 13.06.2022 | 13345480 | |||
| Less: Tax paid on 11.10.2022 | 150000 | 7/2022 to 10/2022=4M on Rs. 13345480/- @ 1% | 533819 | |
| Balance Tax Payable | 13195480 | |||
| Less: Tax paid on 20.01.2020 & 31.01.2023 | 3183690 | 11/2022 to 1/2023=3M on Rs.13195480/- @ 1% | 395864 | |
| Balance Tax Payable | 10011790 | 2/2023 to 3/2023=2M on Rs.10011790/- @ 1% | 200236 | |
| 1129919 | ||||
| Monthly Installments: | ||||
| Month | Installment amount |
Interest 220(2) calculation | Interest u/s 220(2) | Total Installment due |
| April’2023 | 1000000 | 10011790×1%=10011 8 +1129919 =1230037 | 1230037 | 2230037 |
| May’2023 | 1000000 | 9011790×1%=90118 | 90118 | 1090118 |
| June’2023 | 1000000 | 8011790×1%=80118 | 80118 | 1080118 |
| July’2023 | 1000000 | 7011790×1%=70118 | 70118 | 1070118 |
| Aug’2023 | 1000000 | 6011790×1%=60118 | 60118 | 1060118 |
| Sep’2023 | 1000000 | 5011790×1%=50118 | 50118 | 1050118 |
| Oct’2023 | 1000000 | 4011790×1%=40118 | 40118 | 1040118 |
| Nov’2023 | 1000000 | 3011790×1%=30118 | 30118 | 1030118 |
| Dec’2023 | 1000000 | 2011790×1%=20118 | 20118 | 1020118 |
| Jan’2024 | 1011790 | 1011790×1%=10118 | 10118 | 1021908 |
| Total | 10011790 | 1681099 | 11692889 | |
8. Heard the learned counsels appearing on either side.
9. Admittedly, the petitioner company has been wound up and the entire affairs of the company now rest with the official liquidator. The petitioner company does not have any property, which can be easily sold to clear the dues of the respondent herein. However, the intent of the petitioner appears to be sincere despite the odds stacked against them.
10. Therefore, this Court is of the view that the petitioner must be permitted to show their bona fides and settle the dues. With this intent and in the interest of justice, the Writ Petition is allowed permitting the petitioner to pay the amount in installments. The calculation sheet provided by the respondent is taken as the calculation for the repayment of the amount.
11. In the calculation submitted by the respondent, the first installment payable is a sum of Rs.10,00,000/- together with interest of a sum of Rs. 11,29,919/-, totally a sum of Rs.22,30,037/-. This amount would be a little too steep for the petitioner to repay. Therefore, the first installment of Rs.22,30,037/- is split into two installments. The first of which will be a sum of Rs.11,29,919/-and the remaining shall be paid as the 11th installment and the amount due under the 11th installment would be a sum of Rs.10,21,908/-. It is needless to state that default of even one of the installments would bring an end to this concession shown to the petitioner. However, there shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed.
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