Kalaignar Television found itself in soup after it showed a loss in its income for the year 2009-10 and 2010-11. The Income tax department however recorded that the channel had much larger income than it accounted for. Madras High Court has now granted status quo on the matter.
Chennai: The Madras High Court has directed the Income Tax department to maintain status quo on its arrears of tax demand against Kalaignar Television’s channel for the years 2009-10 and 2010-11.
Justice Anita Sumanth granted status quo till the next date of hearing. Kalaignar TV sought quashing of the department's March 7 demand notice that reaffirmed its determination of tax made.
The petitioner is seeking a directive from the court to the department to not enforce the arrears of demand, stating that it violates natural justice and provisions of the Constitution.
The court issued notice to the assistant commissioner of Income Tax, Non-Corporate Circle in Chennai for filing counter by April 24.
Kalaignar TV had filed the Income Tax returns showing a loss of over Rs 3 crore for 2009-10 and a loss of Rs 6 crore for 2010-11.
The Tax department, however, on March 28, 2013 had determined that its income had crossed Rs 21 crore for 2009-10 and Rs 177 crore for 2010-11.
The television channel first approached the Income Tax Appellate Tribunal and then the Madras high court, which directed them to file a stay application before the assistant commissioner of Income Tax, Non-Corporate Circle.
Kalaignar TV then filed an application for stay on the grounds of financial hardship
After another round of litigation, the department again confirmed the same income (on December 31, 2017) for the petitioner and sent a notice for payment of tax on March 7, 2019 demanding them to pay 10 % of the income.
The notice was issued without even considering the grounds in its stay application, the petitioner alleged.
The assessment order allegedly showed complete non-application of mind since it was identical to the initial order passed.
The petitioner further said the disputed assessment order was contrary to the orders of the high court, the appellate authority and related agencies and therefore violated the principles of natural justice.
It was also arbitrary, perverse and violative of Articles 14 (equality), 19(1)(g) (right to carry on any trade) and 265 (no tax shall be levied expect under the authority of law) of the Constitution, the television channel contended.
(With inputs from PTI)
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