Air Liquide Medical Systems Private Limitedrepresented By Its Managing Directormr.anil Kumar, Campus Tek Meadows5[Th] Floor, Tower 'B' v. The Deputy Commissioner Of Income Tax Corporate Circle 1(1), Chennai Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.02.2022CORAM : THE HONOURABLE MR.JUSTICE R.SURESH KUMAR W.P.No.2232 of 2022and W.M.P.Nos.2402 & 2403 of 2022 Air Liquide Medical Systems Private LimitedRepresented by its Managing DirectorMr.Anil Kumar, Campus Tek Meadows5[th] Floor, Tower 'B', No.51, Rajiv Gandhi SalaiSholinganallur, Chennai – 119....Petitioner -Vs- 1.The Deputy Commissioner of Income Tax Corporate Circle 1(1), Chennai Room No.611, Wanaparthy Block VI Floor, No.121, Mahatma Gandhi Road Nungambakkam, Chennai – 600 034. 2.Commissioner of Income Tax (Appeals) National Faceless Appeal Centre Delhi....Respondents Prayer : Writ Petitions under Article 226 of the Constitution ofIndia praying for the issuance of a Writ of CertiorarifiedMandamus calling for the records on the file of the firstrespondent in PAN and quash the impugned order inITBA/COM/F/17/2021-22/1037956325(1) dated 20.12.2021 for theAssessment Year 2018-19 as illegal, arbitrary, against theprinciples of natural justice and devoid of merits andconsequently direct the 1[st] respondent to grant stay of recoveryof demand for the Assessment Year 2018-19 pending disposal ofthe appeal preferred by the petitioner before the 2[nd] respondent. For Respondents : Mr.D.Prabhu Mukunth Arunkumar Junior Standing Counsel The prayer sought for herein is for a Writ ofCertiorarified Mandamus calling for the records on the file ofthe first respondent in PAN and quash the impugnedorder in ITBA/COM/F/17/2021-22/1037956325(1) dated 20.12.2021https://hcservices.ecourts.gov.in/hcservices/ for the Assessment Year 2018-19 as illegal, arbitrary, againstthe principles of natural justice and devoid of merits andconsequently direct the 1[st] respondent to grant stay of recoveryof demand for the Assessment Year 2018-19 pending disposal ofthe appeal preferred by the petitioner before the 2[nd] respondent. 2. In respect of the petitioner/assessee, scrutinyassessment under Section 143(3) read with Section 143(3A) and143(3B) of the Income Tax Act, 1961 (In short 'the Act') for theAssessment Year 2018-19 was completed on 26.03.2021, whichresulted in a demand of Rs.12,86,72,780/-. 3. As against the said order, the petitioner/assesseealready preferred an appeal before the Commissioner of IncomeTax (Appeals) and the appeal is pending. In the meanwhile thepetitioner, by invoking Section 220(6) of the Act, filed apetition on 12.04.2021 for grant of stay of the assessment orderpending appeal. The said application submitted under Section220(6) of the Act having been considered, was decided by anorder dated 20.12.2021, under which, by quoting thecircumstances under which a blanket stay can be given underSection 220(6) of the Act and also by relying upon theinstructions issued by the Department in Instruction No.1914dated 29.02.2016, the assessing authority has passed the saidorder dated 20.12.2021, stating that the petitioner shall pay atleast 20% of the demand, otherwise he may not be entitled forstay. Aggrieved over the said order passed by the assessingauthority, the present writ petition has been filed. 4. Heard Mr.Raghav Rajeev Menon, learned counsel appearingfor the petitioner, who would submit that, when an applicationis filed under Section 220(6) of the Act, where certain groundshave been raised, to have a prima facie satisfaction of theassessing authority that the petitioner has got a presentablecase before the appellate authority, which is pendingconsideration before the said authority, and during theinterregnum, as an interim arrangement, stay can be granted,which is possible under Section 220(6) of the Act. 4. Heard Mr.Raghav Rajeev Menon, learned counsel appearingfor the petitioner, who would submit that, when an applicationis filed under Section 220(6) of the Act, where certain groundshave been raised, to have a prima facie satisfaction of theassessing authority that the petitioner has got a presentablecase before the appellate authority, which is pendingconsideration before the said authority, and during theinterregnum, as an interim arrangement, stay can be granted,which is possible under Section 220(6) of the Act. 5. In this context, the present condition imposed thatunless the petitioner/assessee makes a payment of 20% of thedemand, the petitioner/assessee is not entitled for stay is anexorbitant condition without considering the grounds raised bythe petitioner in the application submitted by the petitionerunder Section 220(6) of the Act, he contended. 6. Learned counsel for the petitioner also relied upon someof the decisions of the Writ Court ie., this Hon'ble Court,where he heavily relied upon the order of the learned SingleJudge dated 08.04.2021 made in W.P.(MD) No.5550 of 2020 in thematter of “Queen Agencies -Vs- The Assistant Commissioner ofIncome Tax, Circle-1 and Others” , where he relied upon thefollowing portions.https://hcservices.ecourts.gov.in/hcservices/ “ 12. The learned counsel on either side bring itto my notice that the decision of the Delhi HighCourt was put to challenge before the Hon'bleSupreme Court in MANU/SC/0907/2018 : (2018) 18SCC 447 (Principal Commissioner of Income Tax-Vs- LG Electronics India Private Limited).Based on the submission of the learned AdditionalSolicitor General, the Hon'ble Supreme Courtclarified that in all cases arising under Section220(6) of the Act, it will be open to theauthorities on the facts of individual cases, togrant deposit orders of a lesser amount that 20%pending appeal. This was laid down by theHon'ble Supreme Court since it was submitted thatthe administrative circular will not operate as afetter on the Commissioner since he is a quasi-judicial authority. Since the Assessing Officeris exercising quasi-judicial power by virtue ofSection 220(6) of the Act, the implication of theclarification of the legal position by theHon'ble Supreme Court is that the assessingofficer can grant deposit orders of a lesseramount than 20% pending appeal without makingreference to the administrative Pr.CIT/CIT.Reference of course has to be made if he is ofthe view that deposit order of a higher amountthan 20% pending appeal is warranted.” 7. He also relied upon another decision of this Court dated13.12.2019 made in W.P.No.3849 of 2019 dated 13.02.2019 in thematter of “Mrs.Kannammal -Vs- Income Tax Officer, Tiruppur”,where he relied upon the following portion. “ 14. The disposal of the request for stay by thepetitioner leaves much to be desired. I am ofthe categoric view that the Assessing Officerought to have taken note of the conditionsprecedent for the grant of stay as well as theCirculars issued by the CBDT and passed aspeaking order. Of course the petition seekingstay filed by the petitioner is itself cryptic.However, as noted by the Supreme Court in thecase of Commissioner of Income Tax Vs.MahindraMills ((2008) 296 ITR 85 (Mad)) in the context ofgrant of depreciation, the Circular of CentralBoard of Revenue (No.14 (SL-35_ of 1955 datedApril 11, 1955) requires the officers of thedepartment 'to assist' a taxpayer in everyreasonable way, particularly in the matter ofclaiming and securing reliefs....... Although,therefore, the responsibility for claimingrefunds and reliefs rests with the assessees onhttps://hcservices.ecourts.gov.in/hcservices/ whom it is imposed by law, officers should drawtheir attention to any refunds or reliefs towhich they appear to be clearly entitled butwhich they have omitted to claim for some reasonor other.........'. Thus, notwithstanding thatthe assessee may not have specifically invokedthe three parameters for the grant of stay, it isincumbent upon the assessing officer to examinethe existence of a prima facie case as well ascall upon the assessee to demonstrate financialstringency, if any and arrive at the balance ofconvenience in the matter.15. I thus set aside impugned order dated25.01.2019. The Assessing Officer is directed topass orders de novo on the stay application filedby the petitioner in the light of the discussionas aforesaid, after hearing the petitioner,within a period of four weeks from date ofreceipt of a copy of this order. I have, fortheaforesaidreason,consciouslyanddeliberately refrained from referring to ormaking any observation on the merits of theassessment.” 8. By relying upon these decisions, the learned counselwould submit that, as per the decision made by the Courts ofLaw, even though it is the discretion of the assessing authorityto exercise his power under Section 220(6), he has to exercisesuch jurisdiction with caution and in each and every case itneed not be a uniform order to make a payment of 20% as acondition precedent for grant of stay. 9. Therefore, the learned counsel seeks the indulgence ofthis Court by remanding the matter for re-consideration, where,after giving an opportunity of being heard to the petitioner,the issue raised by the petitioner can be considered and decidedafresh, for which purpose the issue can be remanded back onceagain. 10. However, Mr.D.Prabhu Mukunth Arunkumar, learnedStanding Counsel appearing on behalf of the respondents reliedupon the very same decisions referred to by the petitioner'sside and would contend that, insofar as exercising of the powerby the assessing authority under Section 220(6) of the Act isconcerned, it is purely a discretionary one, where, if at all adiscretion has to be exercised, he must exercise such discretionwithin the parameters of the Instructions issued by theDepartment, where he very much relied upon the Instruction,according to which initially there was a minimum 50% of thedemand to be paid and now it is 20% of the demand. Therefore,that 20% as of now has been directed to be paid for the purposeof getting stay, otherwise it is open to the assessee to make ahttps://hcservices.ecourts.gov.in/hcservices/ further request to the Jurisdictional Commissioner before whomalso the same plea can be made by the petitioner/assessee asthat would be possible for the assessee because of the judgmentmade in (2018) 18 SCC 447 (Principal Commissioner of Income Tax-Vs- LG Electronics India Private Limited). 11. Therefore, according to the learned Standing Counselfor the respondent, if the petitioner/assessee is not satisfiedwith the present order to make a payment of 20% of the demandfor getting stay of the assessment order pending appeal beforethe CIT (Appeals), he can very well approach the Commissionerfor getting a better relief, if he so advised. Therefore, thepresent order does not warrant any interference even forremanding the matter back to the authority for re-consideration. 12. I have considered the submissions made by the learnedcounsel for both sides and have perused the materials placed onrecord. 11. Therefore, according to the learned Standing Counselfor the respondent, if the petitioner/assessee is not satisfiedwith the present order to make a payment of 20% of the demandfor getting stay of the assessment order pending appeal beforethe CIT (Appeals), he can very well approach the Commissionerfor getting a better relief, if he so advised. Therefore, thepresent order does not warrant any interference even forremanding the matter back to the authority for re-consideration. 12. I have considered the submissions made by the learnedcounsel for both sides and have perused the materials placed onrecord. 13. Insofar as the case of the assessee is concerned, asagainst the order passed under Section 143(3) of the Act for theAssessment Year 2018-19 dated 26.03.2021, where a demand ofRs.12,86,72,780/- has been made, the petitioner/assessee alreadyfiled an appeal before the CIT (Appeals). The appeal is stillpending and it may take some time to decide the appeal and soduring the pendency of the appeal, the petitioner is entitled toseek for a stay, of course by invoking sub-section (6) ofSection 220 of the Act. 14. If we look at the language of the said Section, itshows that, where an assessee has presented an appeal undersection 246 [or Section 246A] the Assessing Officer may, in hisdiscretion and subject to such conditions as he may think fit toimpose in the circumstances of the case, treat the assessee asnot being in default in respect of the amount in dispute in theappeal. 15. Two things are to be noted in the said sub-section (6)ie., the assessing officer may use his discretion, that too,subject to certain conditions as he may think fit, in thecircumstances of the case. 16. Here in the case in hand, the assessing officer sincecan use his discretion to pass any order, of course by imposingcertain conditions in the circumstances of the case, if we lookat the impugned order, the assessing officer has stated threereasons under which a blanket stay can be given without imposingany condition. But, the petitioner's case does not fall in anysuch category. 17. Moreover, the assessing authority has quoted theDepartment's Instruction No.1914 dated 29.02.2016, wherehttps://hcservices.ecourts.gov.in/hcservices/ originally it was a demand of 50% and subsequently a demand of20% was imposed as condition precedent for getting stay underSection 220 (6). 18. Here in the case in hand, the minimum requirement of20% ought to have been paid by the petitioner, which alone hasbeen quoted by the assessing authority in the impugned order. 19. If at all any quasi-judicial authority is vested withthe power to use his discretion, that too on conditions to beimposed in the circumstances of the case, it cannot be statedthat, a hard and fast rule for such kind of discretion must beexercised in a particular fashion or manner, wherein a constantorder has to be passed in each and every case. 20. The discretion to be exercised by the assessingauthority depends upon the circumstances of each and every case.This has also been specifically made clear in Section 220(6) ofthe Act. Here in the case in hand, even though it was submittedby the learned counsel for the petitioner that, the groundsurged by the petitioner/assessee have not been considered inproper perspective in the impugned order, this Court feels that,since it is only an interim arrangement during the pendency ofthe appeal, where alone the entire issue ie., the root of thematter can be gone into by the appellate authority, therefore,during the interregnum, ie., during the pendency of the appeal,what best interim arrangement can be made alone has been statedunder Section 220(6) of the Act. 20. The discretion to be exercised by the assessingauthority depends upon the circumstances of each and every case.This has also been specifically made clear in Section 220(6) ofthe Act. Here in the case in hand, even though it was submittedby the learned counsel for the petitioner that, the groundsurged by the petitioner/assessee have not been considered inproper perspective in the impugned order, this Court feels that,since it is only an interim arrangement during the pendency ofthe appeal, where alone the entire issue ie., the root of thematter can be gone into by the appellate authority, therefore,during the interregnum, ie., during the pendency of the appeal,what best interim arrangement can be made alone has been statedunder Section 220(6) of the Act. 21. In this context, the judgment of the Hon'ble SupremeCourt referred to herein above ie., (2018) 18 SCC 447 (PrincipalCommissioner of Income Tax -Vs- LG Electronics India PrivateLimited) has been relied upon by the learned Judge in the saidorder in Queen Agencies case cited supra and the relevantportion at Para 12 has also been quoted, where the learned Judgehas stated that definite 20% need not be imposed in each andevery case, even a lesser percentage can be imposed whilepassing an order under Section 220(6) of the Act. 22. If we take the said proposition as culled down by thelearned Judge from the decision of the Hon'ble Supreme Court,this Court feels that, if at all the petitioner is having anygrievance, that may be only to a limited extent to state that,20% as has been sought for through the impugned order may bereduced to a lesser one. If it is a lesser one, we cannot onceagain remand the matter back to the respondent i.e., theassessing authority to use his discretion to fix a lesserpercentage of the demanded amount to be paid by thepetitioner/assessee. 23. In this context, since the demand under the assessmentwhich is in question before the appellate authority isRs.12,86,72,780/-, which is comparatively a huge sum, instead of20% demand by citing the Department Instruction No.1914 datedhttps://hcservices.ecourts.gov.in/hcservices/ 29.02.2016, the assessing authority could have passed an orderby making a demand of some lesser percentage. Considering thefacts and circumstances of the case and also taking into accountthe quantum of demand made as quoted herein above, this Courtfeels that, instead of remanding the matter back to therespondent for re-consideration, a direction can be given to thepetitioner/assessee to make a payment of at least 15% of thedemand and on that condition, the petitioner would be entitledto get a stay of the assessment order which is under appealbefore the appellate authority. If such a direction is given asan interim arrangement, this Court feels that, the ends ofjustice would be met. 24. Therefore, for all these reasons stated above, thisCourt is inclined to dispose of this writ petition with thefollowing order. ●That the impugned order is modified to theeffect that, instead of 20%, thepetitioner/assessee shall pay 15% of thedemand ie., Rs.12,86,72,780/- within aperiod of four weeks from the date ofreceipt of a copy of this order.●On this condition, there shall be an orderof stay of the assessment order till thedisposal of the appeal filed before thesecond respondent.●It is made clear that, within four weekstime if the payment of 15% of the demand asdirected above has not been paid or compliedwith by the petitioner/assessee, the orderof stay shall stand automatically vacatedwithout any further reference to this Court. 25. With the above directions, this writ petition isdisposed of. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar KST To 25. With the above directions, this writ petition isdisposed of. No costs. Consequently, connected miscellaneouspetitions are closed. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar KST To 1.The Deputy Commissioner of Income Tax Corporate Circle 1(1), Chennai Room No.611, Wanaparthy Block VI Floor, No.121, Mahatma Gandhi Road Nungambakkam, Chennai – 600 034. Corporate Circle 1(1), Chennai Room No.611, Wanaparthy Block VI Floor, No.121, Mahatma Gandhi Road Nungambakkam, Chennai – 600 034. 2.Commissioner of Income Tax (Appeals) National Faceless Appeal Centre Delhi. National Faceless Appeal Centre Delhi. +1 cc to M/s.Hema Muralikrishnan, Advocate Sr.NO. 9327 PMK(CO) A.SK(17/03/2022) W.P.No.2232 of 2022