By Sri. K v. Aravind, Adv

IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4[‘T]DAY OF MARCH 2020 BEFORE| THR HON BLE MR.JUSTICE S. SUNIL DUTT YADAV .WRIT PETITION No. 4952/2020 (TIT) Between:| M/s. MonarchNo.54, Monarch Plaza,Brigade Road,Bangalore 560 OO1.Represented byShri Dawood MohammedPartner Aged about 69 years»/o. Mohammed Dawood ... Petitioner (By Sri Raghuraman V, Adv.) And Ll.Income Tax Officer.Ward 1(2)(1), BMTC Building,80 Feet Road, 6[0#]Block,Near KHB Games Village,Koramangala,Bengaluru 960 O95.Ward 1(2)(1), BMTC Building,80 Feet Road, 6[0#]Block,Near KHB Games Village,Koramangala,Bengaluru 960 O95. oODeputy Commissioner of Income Tax Circle 1(2)(1), BMTC Building, 80 Feet Road, 6[0#]Block, Near KHB Games Village, Koramangala, Bengaluru 960 O95. ... Respondent (By Sri. K. V. Aravind, Adv.) This Writ Petition is filed under Articles 226 & 227 otConstitution of India, praying to quash the impugned notice(1) dated 24.09.2018 (2) dated 29.09.2018 (Annexures-Aland A2) issued by the R-1 as being illegal and withoutjurisdiction and quash the impugned order (1) dated13.12.2019 (Annexure-B) passed by R-2 as being violative ofArticle 14, Article 19, Article 265 and 300A oft theConstitution of India and etc. This Writ Petition coming on for preliminary hearing|this day, the Court made the following: ORDER The petitioner has challenged the impugned noticeissued under Section 143 of the Income Tax Act, 1961,copies of which are produced as Annexures-Al and A2.and has also challenged the order dated 13.12.2019,copy of which is enclosed as Annexure-—B and thedemandpursuant|TO theassessment.OrderatAnnexure-C dated 13.12.2019. 2 |The petitioner submits that as against theassessment order at Annexure-B, an appeal has beenfiled before the Commissioner of Income Tax (Appeals). It is further submitted that the petitioner had filed anapplication for stay and had sought for interim reliefand the Assessing Officer as per the order at |Annexure-X has ordered that there would be stay of80% of the disputed demand till disposal of the appeal,subject to payment of Rs.61,17,317/- (20% of thedemand) on or before 07.02.2020. 3.|It is the contention of learned counsel for thepetitioner that subsequent to the order at Annexure-xX,thepetitionerhas|approachedthePrincipalCommissioner of Income Tax on 07.02.2020 and had|sought for stay of recovery of demand including thedirection of Assessing Officer directing the petitioner todeposit Rs.61,17,317/- of the demand. The petitionerhas furnished copy of the detailed representation madeto the Principal Commissioner of Income Tax detailingvarious contentions, justifying stay of recovery ofdemand and making out a case that the demand is high pitched and has also contended that the assessmentorder has disallowed expenditure of Rs.6,53,34,/735/- asallowable under Section 37(1) of the Income Tax Act,1961, as the said amount was already declared asincomeduringtheassessmentYCalYAOQII2O13.Various other contentions have also been raised. 4It is further contended that when the'application for stay is taken up for consideration by theAssessing Officer, the Assessing Officer should pass anOrderafterdueapplication oT|mind.andthat|subsequently after the application for stay is disposedoff, the petitioner has an opportunity of approaching thePrincipal Commissioner of Income Tax in light of theCircularbearingNo.1914,furtheramendedOTl29.01.2017, 29.02.2016 and 31.07.2017 and despiterepresentation there is no consideration by the PrincipalCommissioner ot Income Tay. 5It is also contended that the Principal|Commissioner of Income Tax is also to take note of the|suidelines as observed in the case ofFlipkart IndiaPrivate LimitedVoThe Assistant Commissioner ofIncome Tax|W.P.Nos.1339-1342/2017decided on23.02.2017)and apply his mind and pass a consideredorder. It is contended that the contents of stayapplication make out a case for consideration ofrelaxing the condition as sought for. 5It is also contended that the Principal|Commissioner of Income Tax is also to take note of the|suidelines as observed in the case ofFlipkart IndiaPrivate LimitedVoThe Assistant Commissioner ofIncome Tax|W.P.Nos.1339-1342/2017decided on23.02.2017)and apply his mind and pass a consideredorder. It is contended that the contents of stayapplication make out a case for consideration ofrelaxing the condition as sought for. 6.|Learned counsel appearing for the Revenuesubmits that the petition is premature and no doubt,the Principal Commissioner of Income Tax has notpassed any order on the representation of the petitionerdated 07.02.2020, but the same would be considered inaccordance with law and in accordance with the existingcirculars as applicable. ToIn light of the appeal having been filed, thequestion of intervening as regards to the assessment order at this stage is not appropriate. However, asregards the contention that the consideration ofapplication for stay and further exercise of power of thePrincipal Commissioner of Income Tax, Keeping in mindthe circular bearing No.1914 as amended on 21.95.2017,29.22.2016 and 31.7.2017 request of the petitioner is tobe considered in a meaningful manner. In fact, thepower of granting stay has been considered by the HighCourt of Judicature at Madras in the case ofM/s.Shriram FinanceVoPrincipal Commissioner ofIncome Tax (1) and Others(W.P.No.5425/2019 &)W.P.Nos.6166 & 6168/2019|decided on01.03.2019)wherein, certain guidelines have been referred to inpara-S which may be taken note of. So also the mannerof exercise of power of the Principal Commissioner ofIncome Tax is detailed in|Flipkart’s case (supra)aT|paras — 18 and 19, which needs to be kept in mind. This_Court refrains from expressing any opinion on themerits of contentions raised but reiterates that the' Principal Commissioner of Income Tax is to exercisepower conferred upon him as per the circulars in ameaningful manner. 8.|The petitioner to be present before the|Principal Commissioner of Income Tax on05.03.2020AT|11.30 a.m.and the request of petitioner as containedin the representation dated O7.02.2020 would bedisposed of in light of the observations made above. OQ In light of the submission that there hasbeen attachment of bank account and in light of thedirection being passed, the attachment already resortedto would be limited to Rs.61,17,317/-. However, in lightof the attachment being restricted to Rs.61,17,317/-,.the Principal Commissioner of Income Tax to dispose ofthe representation of the petitioner within a period notlater than one week from the date of appearance of thepetitioner as noticed above. All contentions of partiesare kept open. It is made clear that if the Principal Commissioner of Income Tax does not decide the matter within a period of one week as_ stipulated, theattachment would automatically stand vacated. This petition is accordinglydisposed off. VGR Sd/-. JUDGE|