M/S Mascot Construction Co.(Partnership Firm) v. Pr. Commissioner Of Income-Tax

(1) wp4715.20 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.4715 OF 2020 M/s Mascot Construction Co.(Partnership Firm),Through its Managing PartnerShri Khaja Aminuddin S/o Shaikh Mehboob,Age : 62 Years, Occu. Business,R/o H. No.1-27, New Road,Manzoorpura, Aurangabad – 431001 ..PETITIONER VERSUS 1.Pr. Commissioner of Income-tax-2,Aaykar Bhavan, CantonmentAurangabad, Tq. & Dist. Aurangabad 2.Asstt. Commissioner of Income-tax Circle-3, R/o Income-tax Office,2[nd] Floor, “Given Suman”,LIC Building, N-5, CIDCO,Aurangabad 3.Commissioner of Income-tax(Appeals)-2, Aurangabad ..RESPONDENTS Mr. R.R. Chandak, Advocate for petitioner; Mrs.Kalpalata Bharaswadkar-Patil, Advocate for respondents CORAM : R.D. DHANUKA AND S. G. MEHARE, JJ. DATE : 6[th] April, 2022 P.C. 1.By this petition filed under Article 226 of the Constitution ofIndia, the petitioner has impugned the order dated 26.8.2019 passedby the Principal Commissioner of Income Tax-2, Aurangabad rejectingreview application for stay. 2.Petitioner has already filed an appeal before the Commissionerof Income-Tax on 16.1.2018 impugning the Assessment Order for theAssessment Year 2015-16 on 19.12.2017 thereby assessing theincome of Rs.5,29,52,162 and final demand of Rs.1,78,61,830/-. 3.The Assessing Authority passed an order on 5.3.2018 directingthe petitioner to deposit 20% of demand of tax for stay of the wholedemand. Being aggrieved by the said order, the petitioner filed WritPetition No.13233 of 2019 before this Court. By an order dated10.4.2019, the Division Bench of this Court in Writ Petition No.13233of 2018 observed that the office memorandum has streamlined theprocedure for considering stay petition and it lays down payment of20% of tax demand as pre-condition for grant of stay on demand witha rider that in view of nature of addition resulting in the disputeddemand is such that payment of a lump sum amount lower than 20% (3) wp4715.20 is not warranted. 4.This Court, in the said judgment, observed that the case put-forth by the petitioner had not been dealt with while passing theimpugned order and direction against the petitioner to deposit 20% ofthe tax demand which is a pre-condition for grant of stay on demandand accordingly was pleased to quash and set aside the order andremanded the proceedings for deciding the matter afresh. 5.Pursuant to the said judgment delivered by this Court,respondent no.2 heard the matter again and passed a fresh order on24.5.2019 directing the petitioner to deposit 20% of the tax demand.Being aggrieved by the said order, the petitioner filed a reviewpetition before the Commissioner of Income Tax. By an order dated26.8.2019, the Commissioner of Income Tax rejected the said reviewapplication filed by recording various reasons. The Commissioner ofIncome Tax upheld the order passed by the Assessing Officer on24.5.2019. 6.Mr. Chandak, learned Counsel for the petitioner submits thatsince August, 2019, no action has been taken by the Revenue againstthe petitioner though the petitioner had not complied with the said (4) wp4715.20 order of deposit of 20% of the tax demand. He submits that theappeal filed by the petitioner before the first Appellate Authority ispending and thus the Appellate Authority be directed to dispose of thesaid appeal expeditiously without directing the petitioner to depositthe amount of 20% of the tax demand. 7.Learned Counsel placed reliance on the judgment of this Courtin the case of Bhupendra Murji Shah vs. Deputy Commissioner ofIncome Tax & ors., (2018) 305 CTR (Bom.) 88 and would submit thatin the facts of that case, this Court had directed the AppellateAuthority to decide the appeal itself without compliance of anypre-condition of deposit of 20%. (4) wp4715.20 order of deposit of 20% of the tax demand. He submits that theappeal filed by the petitioner before the first Appellate Authority ispending and thus the Appellate Authority be directed to dispose of thesaid appeal expeditiously without directing the petitioner to depositthe amount of 20% of the tax demand. 7.Learned Counsel placed reliance on the judgment of this Courtin the case of Bhupendra Murji Shah vs. Deputy Commissioner ofIncome Tax & ors., (2018) 305 CTR (Bom.) 88 and would submit thatin the facts of that case, this Court had directed the AppellateAuthority to decide the appeal itself without compliance of anypre-condition of deposit of 20%. 8.Learned Counsel for the Revenue, on the other hand, submitsthat the amount demanded from the petitioner is substantial. Thepetitioner has challenged the earlier order passed by the AssessingOfficer before this Court by filing a writ petition. While remandingthe matter back to the Assessing Officer, this Court had consideredthat the Assessing Officer has not dealt with the case put-forth by thepetitioner. She submits that after order of remand, the AssessingOfficer has recorded various reasons after dealing with all the (5) wp4715.20 submissions advanced by the petitioner and thus, no interference iswarranted with the order passed by the Assessing Officer and also bythe Commissioner of Income Tax in the Review Application filed bythe petitioner. 9.Perusal of the order dated 10.4.2019 passed by the DivisionBench of this Court in earlier Writ Petition bearing No.13233 of 2018filed by the petitioner clearly indicates that the earlier impugnedorder was quashed and set aside by this Court on the ground that thecase put-forth by the petitioner had not been dealt with while passingthe impugned order so as to substantiate the discretion exercised bythe Assessing Officer. This Court accordingly remanded the matterback to the Assessing Officer for passing a fresh order. 10.Perusal of the order passed by the Assessing Officer on24.5.2019 clearly indicates that the Assessing Officer has dealt withall the issues raised by the petitioner as to why the Assessing Officershall exercise his discretion not to impose any condition of deposit of20% as a pre-condition for grant of stay. The petitioner was notsatisfied with the order passed by the Assessing Officer and filedReview Petition, which also came to be rejected by the learned (6) Commissioner of Income Tax by passing a detailed reasoned orderdated 26.8.2019. 11.In our view, the Assessing Officer was justified in not exercisingthe discretion to grant unconditional stay or stay on payment of lesseramount than 20% of the tax demand. The Assessing Officer whilerejecting the said case of the petitioner has recorded reasons in greatdetail. The Commissioner of Income Tax while rejecting the ReviewApplication has recorded reasons as to why the order passed by theAssessing Officer shall not be interfered with. We do not find anyinfirmity in the order passing by the Assessing Officer as well as bythe Commissioner of Income Tax while rejecting the request of thepetitioner for granting unconditional stay during the pendency of theappeal filed by the petitioner. 12.We are not inclined to accept the submission of the petitionerthat since the appeal is pending for quite some time, instead ofdirecting the petitioner to comply with the order passed by theAssessing Officer which is not recalled by the order passed by theCommissioner of Income Tax, the Appellate Authority shall bedirected to dispose of the appeal expeditiously. The Appellate (7) wp4715.20 Authority has not fixed any date for hearing of the appeal in view ofthe petitioner not having complied with the conditional order passedby the Assessing Officer. Though this petition was filed by thepetitioner on 26.9.2020, no interim relief has been granted by thisCourt in favour of the petitioner. 12.We are not inclined to accept the submission of the petitionerthat since the appeal is pending for quite some time, instead ofdirecting the petitioner to comply with the order passed by theAssessing Officer which is not recalled by the order passed by theCommissioner of Income Tax, the Appellate Authority shall bedirected to dispose of the appeal expeditiously. The Appellate (7) wp4715.20 Authority has not fixed any date for hearing of the appeal in view ofthe petitioner not having complied with the conditional order passedby the Assessing Officer. Though this petition was filed by thepetitioner on 26.9.2020, no interim relief has been granted by thisCourt in favour of the petitioner. 13.So far as the judgment of this Court in the case of BhupendraMurji Shah (supra) relied upon by Mr. Chandak, learned Counsel forthe petitioner is concerned, perusal of the said judgment indicatesthat in that matter this Court had clarified that no opinion on meritswas expressed. The said order was passed in the peculiar facts andcircumstances of the petitioner’s case and only because the learnedCounsel for the petitioner had informed the Court that theCommissioner of Income Tax (Appeal) had already scheduled thematter for hearing and had already heard the matter partly. In thefacts of that case, this Court accordingly directed the Commissioner ofIncome Tax (Appeal) to decide the appeal expeditiously. This Courtwhile passing the said order clarified that this Court would haverelegated the petitioner to the remedy of making an application forstay before the Commissioner of Income Tax (Appeal) and thereafterleft it to the Commissioner of Income Tax to take an appropriate (8) wp4715.20 decision thereon. However, since the appeals were not being heard,such order came to be passed. This Court also clarified that the saidorder shall not be treated as precedent for all cases of of this nature.This Court recorded an undertaking of the petitioner in that matterthat during the pendency of the appeals before the Commissioner ofIncome Tax (Appeal), the petitioner shall not dispose of or createthird party right in respect of his movable assets and properties. 14.In our view, the facts before this Court in the case of BhupendraMurji Shah (supra) were totally different and are distinguishable inthe facts of this case. Thus, the judgment of this Court in the case ofBhupendra Murji Shah (supra) would not advance the case of thepetitioner. 15.In our view, the petition is devoid of merit and is accordinglydismissed. Time to deposit 20% of the tax demand is extended byfour weeks from today. 16.It is made clear that if the amount is not deposited within fourweeks from today, the appeal filed by the petitioner, which is pendingbefore the Commissioner of Income Tax (Appeal), shall standdismissed in view of the default on the part of the petitioner for not (9) wp4715.20 depositing 20% of the tax demand, without further reference to this Court. It is further made clear that no further extension of timewould be granted. No order as to costs. Parties to act on theauthenticated copy of this order. (S. G. MEHARE, J.) (R.D. DHANUKA, J.) amj