Failure to Pay Admitted Income Tax amount Due to Financial Crisis: Madras HC Directs Installment Payments [Read Order]

The Madras High Court has directed the Commissioner of Income Tax (Appeals) to entertain an appeal filed by the petitioner subject to the payment of the balance admitted Income tax amount of Rs. 28,76,662 in six equated monthly installments citing financial constraints.

Jayar Enterprises (petitioner) represented by its partner Janardhan Rao, filed a writ petition under Article 226 of the Constitution of India, challenging the order passed by the Commissioner of Income Tax (Appeals) on 13.12.2024.

The petitioner sought a Writ of Certiorarified Mandamus to quash the impugned order and direct the respondent to accept the appeal upon payment of the balance tax in six equated monthly installments.

Read More: Different Floors of Single Building cannot be Counted as Separate “Residential Houses” u/s 54F of Income Tax Act: Delhi HC [Read Order]

The department rejected the petitioner’s appeal for the assessment year 2019-20 due to non-payment of the admitted tax amount. The petitioner had already paid Rs. 15,00,000 out of the total admitted tax amount but was unable to pay the remaining Rs. 28,76,662 in a single payment due to financial difficulties.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The counsel for the petitioner submitted that the petitioner was arranging funds to clear the balance but required flexibility to pay in installments.

The bench comprising Justice Krishnan Ramasamy, observed that the petitioner had demonstrated a genuine financial crisis, which prevented the payment of the balance tax amount in a single transaction.

The court set aside the impugned order dated 13.12.2024 and granted liberty to the petitioner to pay the balance tax amount in six equated monthly installments. The court directed the petitioner to pay Rs. 5,00,000 each month for the first five installments.

The court directed to pay the balance amount by installments starting on or before 10.04.2025 and continuing monthly until 10.08.2025, with the final installment of Rs. 5,76,662 due on or before 10.09.2025.

Read More: CESTAT Confirms Duty on Sprout Sale Proceeds Retained by Job Worker in Malt Manufacturing [Read Order]

The court directed the Appellate Authority to entertain the appeal, subject to the petitioner adhering to the prescribed payment schedule. The court emphasized that the appeal should be considered on its merits after providing the petitioner sufficient opportunity for a hearing.

The writ petition was disposed of with no costs, and the connected miscellaneous petitions were closed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates