In a major relief to CCTEB India Private Limited, the Delhi High Court released provisionally attached Rs 42 crores available as Fixed Deposit.
The Counsel for the petitioner submitted that pursuant to the order of the Principal Commissioner of Income Tax [“PCIT”], the petitioner is now called upon to pay Rs.35,42,16,461/-. It was submitted by the counsel for the petitioner that the respondents/revenue have called upon the petitioner to deposit a substantial part of the demand, when, even according to them, the petitioner has the wherewithal to liquidate the demand, if it were to ultimately fail on merits.
The Counsel for the petitioner that the appeal against the assessment order was lodged with the Commissioner of Income Tax (Appeals) [“CIT(A)”].
Pursuant to the hearing, Zoheb Hossain, senior standing counsel, who appears on behalf of the respondents/revenue, has obtained instructions. The senior standing counsel submitted that a fixed deposit/bank balance created by the petitioner amounting to approximately Rs.42 crores stands attached under Section 281B of the Income Tax Act, 1961 and that the attachment dissolves on the date of hearing.
A Division Bench consisting of Justices Rajiv Shakdher and Girish Kathpalia observed that “Briefly, what emerges is that a cumulative amount of approximately Rs.42 crores, which was available in the fixed deposits maintained by the petitioner with the Standard Chartered Bank, stands released to the petitioner.”
“According to us, 20% of the total demand, i.e., Rs.56,48,47,520/- should suffice, in line with the CBDT office memorandum F.No. 404/72/93- ITCC dated 31.07.2017. Since respondents/revenue are secured to the extent of Rs.2,14,14,742/-, the petitioner will deposit the balance amount, i.e., Rs.9,15,54,762/- so that it reaches a figure of 20% of the demand” the Court noted.
The Court further added that the Commissioner of Income Tax (Appeals) [“CIT(A)”] will hear and adjudicate the appeal preferred against the assessment order, on merits. Needless to add, once deposit is made by the petitioner, no coercive measures will be taken against the petitioner, till the disposal of the appeal.
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