Chunibhai Haribhai Gajera v. Principal Commissioner Of Income Tax 1

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 5251 of 2022 ========================================================== CHUNIBHAI HARIBHAI GAJERA Versus PRINCIPAL COMMISSIONER OF INCOME TAX 1 ========================================================== Appearance:MR MANISH J SHAH(1320) for the Petitioner(s) No. 1MR DEVANG VYAS, ADDITIONAL SOLICITOR GENERAL OF INDIA for the Respondent(s) No. 1,2,3 ==========================================================CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMARand HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI Date : 28/03/2022 ORAL ORDER (PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR) 1.Though the matter is listed for admission, by consent of learned advocates appearing for the parties, it is taken it forfinal disposal since this Special Civil Application can bedisposed of at this stage as it lies in a narrow compass in thelight of fair submission made by learned counsel appearing forpetitioner. 2. We have heard Mr. Manish J. Shah, learned counsel appearing for the petitioner and Mr. Devang Vyas, learnedAdditional Solicitor General of India, who has accepted notice on behalf of respondents 1 to 3 and waived service of notice onthem. 3.Petitioner filed his return of income on 27.2.2018 for the Assessment Year 2017-18 declaring a total income ofRs.2,83,40,520/-. Return of income filed by the petitioner wasselected for scrutiny assessment by issuing notice under SectionNo.143(2) of The Income Tax Act, 1961 (hereinafter referred toas ‘IT Act’ for short) with the flagged parameters of ‘increase incapital and details of assets and liabilities’. During the course ofassessment proceedings, show cause notice came to be issuedto the petitioner/assessee for explaining the source of capitalintroduction, which is claimed to have been sourced throughreceipt of gift of Rs.10,93,00,000/- from Shri Girdharbhai Gajeravia proper channel. Not accepting the version putforth by thepetitioner/assessee whereunder it was contended that it was agift, the Assessing Officer vide order dated 16.12.2019 passedan assessment order under Section 143(3) of IT Act by holdingsaid gift as a cash credit under Section 68 of the IT Act anddetermined the assessment at Rs.13,76,40,520/- as against thedeclared income of Rs.2,83,40,520/- and consequently, issueddemand notice under Section 156 of the IT Act. 4.Assessee being aggrieved by said order ofassessment filed an appeal under Section 246A of IT Act beforeCommissioner of Income Tax (Appeals)-2, Surat. Alongside filingan appeal, an application for stay was also filed before the 2[nd]respondent namely, the Assessing Officer. However, 2[nd]respondent passed an order directing the assessee to pay 20%of the demand, on the ground that assessment order came to bepassed after considering the information furnished by theassessee. Being aggrieved by the same, petitioner/assesseepreferred an application for stay of entire demand on 25.1.2020before 1[st] respondent against aforesaid order of AssessingOfficer and urged the demand of Rs.11,87,82,252/- raised underthe demand notice under Section 156 of the IT Act be stayed. Inthe meanwhile, petitioner/assessee is said to have received anattachment notice issued under Section 226(3) of IT Act by theAssessing Officer for recovery of demand as made in thedemand notice on 15.2.2022. 5.Petitioner/asseee contends that he was not aware ofany order having been passed by 1[st] respondent much less on20.2.2020 and he came to know only after going through the 5.Petitioner/asseee contends that he was not aware ofany order having been passed by 1[st] respondent much less on20.2.2020 and he came to know only after going through the income tax portal upon receiving the attachment order that anorder came to be passed on 20.2.2020 directing the petitionerto pay 10% of the outstanding amount till 10.3.2020 and onmaking payment of that demand, recovery has been stayed upto31.3.2020 or decision of high pitched committee, whichever wasearlier. It is also stated that even the application for stay madebefore the 1[st] respondent is also pending. Hence, seeking forcomplete stay of the demand, petitioner is contending thatunder similar circumstances, similar benefit has been extendedto similarly placed assessee and the amount received throughbank channel by way of gift having been accepted as areasonable explanation, same benefit ought to be extended tothe petitioner as petitioner is having a good case on meritsbefore the appellate authority. Hence, learned counselappearing for petitioner has reiterated grounds urged in thepetition and has prayed for entire demand being stayed. 6.Per contra, Mr. Devang Vyas, learned AdditionalSolicitor General of India would oppose said prayer, bycontending that order passed by the Principal Commissioner ofIncome Tax is in consonance with the facts obtained in the present case and has prayed for rejection of the petition. 7.Mr. Manish Shah, learned counsel appearing for thepetitioner would contend by way of alternate submission that inthe event this Court is not agreeable to grant an absolute stay ofthe demand as prayed for, atleast the appellate authority maybe directed to dispose of the appeal within a time frame sincethe entire business of the petitioner would get jeopardised byvirtue of the order of attachment. Hence, he prays for suitabledirections being issued to the appellate authority. 8.Having heard the learned advocates appearing forthe parties and on perusal of the order passed by the 1[st]respondent, we are of the considered view that first respondenthaving taken into consideration the order passed by theAssessing Officer and explanation offered by the petitioner withregard to unexplained investment has partially accepted theplea of the assessee and as such, reduced the demand from 20%as determined by the Assessing Officer to 10% of the totaldemand. Said finding recorded by 1[st] respondent would not callfor our interference. However, insofar as 2[nd] prayer is concerned namely, for early disposal of the appeal, we are ofthe considered view that it merits acceptance since petitionerhas pleaded both before the Assessing Authority as well asbefore the Appellate Authority that present assessee stands onthe same footing of an assessee to whom the benefit has beenextended and as such, appellate authority will have to examinethe petitioner’s case on merits namely, the appellate authoritywould be required to examine this aspect also whileadjudicating the appeal expeditiously and as such, we direct the3[rd] respondent-appellate authority to hear, adjudicate anddispose of the appeal filed by e-filing AcknowledgementNo.291721151150120 (date of filing 15.1.2020) filed against theassessment order dated 16.12.2019 (for the Assessment Year2017-18) expeditiously and at any rate within an outer limit ofthree months from today. Petitioner is permitted direct service.Learned Additional Solicitor General of India, who is on advancenotice, shall forward copy of this order to the jurisdictionalappellate authority for compliance. (ARAVIND KUMAR,CJ) (ASHUTOSH J. SHASTRI, J)