Mascot Constrution Co Partnership Firm v. Pr Commissioenr Of Income Tax 2And Others

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD56 WRIT PETITION NO.13233 OF 2018 MASCOT CONSTRUTION CO PARTNERSHIP FIRM THROUGH ITS MANAGING PARTNER ..PETITIONER VERSUS PR COMMISSIOENR OF INCOME TAX 2AND OTHERS..RESPONDENTS … Mr. Raviraj R. Chandak, Advocate for thePetitioner. Mrs. Kalpalata Bharaswadkar Patil and Mr. A. R.Kale, Advocate for Respondents No.1. … CORAM : S. V. GANGAPURWALA & PER COURT:- 1.Heard learned counsel for the petitionerand respondents. 2.The petitioner assails the order rejectingthe application for stay, so also the order passedin review on the application for stay. 3.The learned counsel for the petitionersubmits that the authority has proceeded on thepremise that in view of CBDT guidelines bearinginstruction no.1914, (office memorandum dated31.07.2017) the stay cannot be granted without theassessee depositing 20% of the tax demanded. Theassessee has to deposit 20% of the tax demanded aspre-condition for grant of stay. According to thelearned counsel the CBDT circular cannot restrictthe discretionary powers of the authority. The learned counsel relies on the judgment of the ApexCourt in case of the Principal Commissioner ofIncome Tax and Ors. Vs. LG Electronics India (P)Ltd. dated 20.07.2018 and the order of the DelhiHigh Court in case of LG Electronics India (P) Ltd.Vs. Principal Commissioner of Income Tax and Ors.reported in (2018) 168 DTR (Del) 354. According tothe learned counsel the case put forth by thepetitioner has not been considered. 4.Mrs. Bharaswadkar Patil, learned counselfor the respondent submits that the authority hasconsidered the case put forth by the petitioner andit is not only on the basis of CBDT circular theorder has been passed. It has been considered thatthe petitioner had made a declaration during thesurvey. It cannot be said that the authority whilepassing the impugned order has not considered thecase put forth by the petitioner. 5.The Apex Court in a case of Principal Commissioner of Income Tax and Ors. Vs. LG Electronics India (P) Ltd. (supra) has observedthat the administrative circular does not operateas fetter on the powers of CIT since it is a quasi-judicial authority. The Apex Court has clarifiedthat in all cases like the present case, it will beopen to the authorities, on the facts of individualcases, to grant deposit orders of lesser amountthan 20 per cent, pending appeal. 6.The general direction appears to have beengiven by the Apex Court in the said judgment. 7.The authority in the impugned orderobserves that the office memorandum has streamlinedthe procedure for considering stay petition and itlays down payment of 20% of tax demand as pre-condition for grant of stay on demand. One riderwas attached in the order that in view of nature ofaddition resulting in the disputed demand is suchthat payment of a lump sum amount lower than 20% isnot warranted. 8.The order passed in review reiterates thesame. It is further observed in said order thatthe assessee himself voluntarily disclosed certainamount of income over and above the regular incomeduring the course of survey proceedings. The caseof the petitioner appears to be that the same hasbeen retracted. The said aspect has not beenconsidered by the authority. 9.It is discretion of the authority todirect payment of particular percentage of theamount as a pre-condition for stay. However whileconsidering the stay petition the prima facie caseput forth by the parties is required to beconsidered. The authority has to deal with thecontentions raised by the parties so as to disclosethe application of mind by the authority to thecontention put forth by the parties. Reasons arerequired to be given. Reasons now are considered to be one of the pillar of the principles ofnatural justice. 9.It is discretion of the authority todirect payment of particular percentage of theamount as a pre-condition for stay. However whileconsidering the stay petition the prima facie caseput forth by the parties is required to beconsidered. The authority has to deal with thecontentions raised by the parties so as to disclosethe application of mind by the authority to thecontention put forth by the parties. Reasons arerequired to be given. Reasons now are considered to be one of the pillar of the principles ofnatural justice. 10.We do not find that the case put forth bythe petitioner has been dealt with while passingimpugned order so as to substantiate the discretionexercised by him. If after considering the caseput forth by the petitioner, the authority may cometo the conclusion about the quantum of the amountthe petitioner is required to deposit as a pre-condition for stay. 11.In light of the above, the impugned ordersare quashed and set aside. The authority shallconsider the stay application filed by thepetitioner on its own merits and take decisionprima facie meeting out the case put forth by thepetitioner. The petitioner shall appear before theauthority on 15.04.2019 and shall cooperate inexpeditious disposal of the said petition. 12.Writ Petition accordingly disposed of. Nocosts. (A. M. DHAVALE) (S. V. GANGAPURWALA) JUDGE JUDGE