Jankalyan Vinimay Private Limited v. Deputy Commissioner Of Income Tax, Circle-1(1), Kolkata & Ors

Item No.2, 3, & 4. IN THE HIGH COURT OF JUDICATURE AT CALCUTTACIVIL APPELLATE JURISDICTION APPELLATE SIDE HEARD ON: 07.02.2023 DELIVERED ON: 07.02.2023 CORAM: THE HON’BLE MR. JUSTICE T. S. SIVAGNANAM AND THE HON’BLE MR. JUSTICE HIRANMAY BHATTACHARYYA F.M.A. 1160 of 2022 WithI.A. No.CAN 1 of 2022 WithI.A. No.CAN 2 of 2022 Jankalyan Vinimay Private Limited Vs. Deputy Commissioner of Income Tax, Circle-1(1), Kolkata & Ors. And F.M.A. 1161 of 2022WithI.A. No.CAN 1 of 2022 WithI.A. No.CAN 2 of 2022 Jankalyan Vinimay Private Limited Vs. Deputy Commissioner of Income Tax, Circle-1(1), Kolkata & Ors. And F.M.A. 1164 of 2022 WithI.A. No.CAN 1 of 2022 WithI.A. No.CAN 2 of 2022 Jankalyan Vinimay Private LimitedVs. Deputy Commissioner of Income Tax, Circle-1(1), Kolkata & Ors. Appearance:- Mrs. Manju Agarwal, Mr. B. Manot… for the appellant. Mr. Smarjit Roychowdhury …. for the respondents. JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, J.) 1.Since the issues involved in these appeals are common andgermane, all the appeals are disposed of by this common judgmentand order. 2.These intra-Court appeals have been filed by the writpetitioner against the orders passed by the learned Single Benchin W.P.A. No.11284 of 2021, W.P.A. No.11281 of 2021 and W.P.A.No.11272 of 2021 respectively dated 27[th] July, 2021. All the writpetitions were filed by the assessee with varied prayers and ineffect questioning the assessment orders passed under Section 143(3) of the Income Tax Act, 1961 (for short, “the Act”).Though such varied prayers were sought for in the writpetitions, during the course of submissions before the learnedWrit Court, the learned Advocate appearing for the appellant /writ petitioner confined the arguments with the prayer todispose of the appellant’s application filed under Section 220(6) of the Act for granting an order of interim stay of theassessments, which according to the appellant, are high-pitchedassessments till the appeal filed by the assessee before theCommissioner of Income Tax (Appeals) are disposed of. 3.The learned Single Bench has dismissed the writ petitionsby the impugned orders on the ground that the writ petitionswere filed belated whereas the stay applications were filedbefore the assessing officer during September, 2018. Aggrievedby such order, the appellant is before this Court by way ofthese appeals. 4.There is a delay of 166 days in filing the appeals. Wefind sufficient cause has been shown for not preferring theappeals within the period of limitation. Hence, the delay infiling the appeals are condoned. 5.We have heard Mrs. Manju Agarwal, learned counsel appearingfor the appellant and Mr. Smarajit Roychowdhury, learned counselappearing for the respondents. 6.Admittedly, the assessments are high-pitched assessmentshaving completed in the year 2017-2018. The assessments relateto the assessment years 2011-12, 2012-13 and 2016-17. Wellwithin the period of limitation, the appellant had filed thestatutory appeals before the Commissioner of Income Tax(Appeals) and the appeals are pending since 2018. It is notclear as to why the appeal petitions have not been disposed ofin spite of passage of time and very recently, the assessingofficer has rejected the stay application buy communicationdated 8[th] December, 2022. 5.We have heard Mrs. Manju Agarwal, learned counsel appearingfor the appellant and Mr. Smarajit Roychowdhury, learned counselappearing for the respondents. 6.Admittedly, the assessments are high-pitched assessmentshaving completed in the year 2017-2018. The assessments relateto the assessment years 2011-12, 2012-13 and 2016-17. Wellwithin the period of limitation, the appellant had filed thestatutory appeals before the Commissioner of Income Tax(Appeals) and the appeals are pending since 2018. It is notclear as to why the appeal petitions have not been disposed ofin spite of passage of time and very recently, the assessingofficer has rejected the stay application buy communicationdated 8[th] December, 2022. 7.Be that as it may, this Court is of the view that duringthe pendency of the appeals, if the assessment orders are to begiven effect to, it may cause prejudice. Normally, whilegranting an order of interim stay, condition would be imposed onthe assessee to pay part of the assessed tax. However, therehave been cases where such payment / deposit has not beenordered when the assessments are unduly high-pitched. 8. In the instant case, since the appeals were filed in 2018and the stay applications filed before the Deputy Commissionerof Income Tax during the year 2018 followed by subsequentreminders, were rejected only on 8[th] December, 2022 and theassessments orders were not given effect to till date, we are ofthe view that the appeals filed before the Commissioner ofIncome Tax (Appeals) could be disposed of at an early date anduntil then, the respondents/department should not take anycoercive action against the appellant / assessee for recovery ofthe income tax, which has been assessed. 9.Identical view was taken by this Court in the case of GreatBarter Private Limited Vs. Assistant Commissioner of Income Tax,Circle-1(1), Kolkata & Ors in MAT 244 of 2020 and MAT 245 of2020 dated 6[th] December, 2022. The operative portion of theorder reads as follows:- “9.Admittedly, the assessments are high pitchedassessments and when such high pitched assessmentsare appealed against and an order of stay issought for either before the assessing officer byfiling an application under Section 220(6) of theIncome Tax Act, orders are passed by the assessing officer either keeping the notice of recovery inabeyance and not treating the assessee as anassessee in default till the appeal is disposedof. 12.In both these cases, the Hon’ble DivisionBench of the High Court of Delhi has consideredhigh pitched assessments and has also taken noteof the instruction issued by the CBDT and haveheld that when the assessments are unreasonablyhigh pitched, the notices of recovery shouldremain stayed till the disposal of the appeal bythe first appellate authority. In cases on hand,the return filed by the assessee was a lossreturn. However, the assessing officer hasassessed the income and it is definitely a highpitched assessment. That apart, we find that theappeal was filed before the Commissioner of IncomeTax (Appeals) well within the period of limitationand is pending since 25[th] January, 2018.14.In the light of the above, the appeals areallowed and the order passed in the writ petitionsis set aside with a direction to keep the recoverynotices issued by the assessing officer kept inabeyance and direct the Commissioner of Income Tax(Appeals), the appellate authority, to disposed ofthe appeals on merits and in accordance with lawafter affording an opportunity of personal hearingto the authorised representative of the assesseeas expeditiously as possible preferably within a period of 45 days from the date of receipt of theserver copy of this judgment and order. period of 45 days from the date of receipt of theserver copy of this judgment and order. 10.In the light of the above discussion, these appeals areallowed and the orders passed in the writ petitions are setaside with a direction to keep the recovery proceedingsinitiated by the assessing officer in abeyance with a furtherdirection to the Commissioner of Income Tax (Appeals) to disposeof the appeal petitions filed by the assessee on merits and inaccordance with law after affording an opportunity of personalhearing to the authorised representative of the assessee asexpeditiously as possible, preferably within a period of 45 daysfrom the date of receipt of the server copy of this judgment andorder. 11.We make it clear that we have not gone into the merits ofthe matters and it will be well open to the assessee to canvassall factual and legal issues in the pending appeals before theCommissioner of Income Tax (Appeals). 12. There shall be no order as to costs. 13. Urgent photostat certified copy of this order, if appliedfor, be furnished to the parties expeditiously upon complianceof all legal formalities. (T.S. SIVAGNANAM, J) I agree, (HIRANMAY BHATTACHARYYA, J.) NAREN/PALLAB(AR.C)