Namrata Shailesh Kumar Teraiya v. Deputy Commissioner Of Income Tax, Central Circle 2(1),Ahmedabad ==========================================================

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 18459 of 2021 With R/SPECIAL CIVIL APPLICATION NO. 18704 of 2021With R/SPECIAL CIVIL APPLICATION NO. 18709 of 2021 ========================================================== NAMRATA SHAILESH KUMAR TERAIYA Versus DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1),AHMEDABAD ========================================================== Appearance: MR RAVISH D BHATT(5867) for the Petitioner(s) No. 1MS HIMANI J CHOUHAN(10826) for the Petitioner(s) No. 1RUCHIKA R SHARMA(9635) for the Petitioner(s) No. 1 MR MR BHATT, SENIOR COUNSEL WITH MR KARAN SANGHANI,ADVOCATE FOR THE RESPONDENTSNOTICE SERVED BY DS for the Respondent(s) No. 1,2,3,4SERVED BY RPAD (N) for the Respondent(s) No. 5========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 07/02/2022 COMMON ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1Since the issues raised in all the captioned writ applications arethe same, those were taken up for hearing analogously and are beingdisposed of by this common order. 2For the sake of convenience, the Special Civil ApplicationNo.18459 of 2021 is treated as the lead matter. 3By this writ application under Article 226 of the Constitution ofIndia, the writ applicant – an assessee has prayed for the following reliefs: “(A) Admit and allow the present application. (B) Issue a writ of mandamus and/or any other order or direction interalia quashing and setting aside the impugned order dated 13[th]November 2021 (Annexure A) passed by the present respondent no.1and further be pleased to issue directions to respondent no.1 to passreasoned and speaking order after providing opportunity of hearing tothe applicant on the application dated 01[st] November 2021 (AnnexureK) under Section 220(6) of the Act, in the interest of justice. (C) Issue a writ of mandamus and/or any other order or direction ofquashing and setting aside the impugned communication dated 17[th]November 2021 (Annexure O) inter alia effecting attachment of the carof the applicant being Mercedes Benz Car, Model NO.E350D, in theinterest of justice. (D) Issue appropriate writ, order or direction to the respondent no.3 todecide the pending applications of the applicant dated 16[th] November2021 (Annexure C) expeditiously and in accordance with law in theinterest of justice. (E) Issue appropriate directions restraining respondent no.4 fromtaking recourse to any coercive measures for recovery of disputed taxdemand during the pendency of the stay application before therespondent no.3, in the interest of justice. (F) Pending admission, hearing and final disposal of this petition, passan order of restraining the respondent no.4 from taking recourse to anysort of coercive action for recovery of disputed tax demand pursuant tohis pursuant to his demand notice dated 29[th] October 2021 (AnnexureI). (G) Grant ad-interim relief in terms of para 8(F) above. (H) pass any other and further order as may be deemed just, fit andproper looking at the facts and circumstances of the case in the ends ofjustice.” 4The facts giving rise to this litigation may be summarized asunder: 5It appears from the materials on record that the search and seizure operations were carried out at the premises of the writ applicant underSection 132 of the Income Tax, 1961 (for short, “the Act, 1961”) on 11[th]October 2019. Pursuant to the search and seizure operations, theproceedings of assessment under Sections 153A read with 143(3) of theAct for the assessment years 2014-15 to 2020-21 were undertaken. Thesame resulted in passing of various assessment orders dated 25[th]September 2021. The table below would indicate the assessed incomeunder Section 153A compared to the regular assessment under Section139(1) of the Act: 4The facts giving rise to this litigation may be summarized asunder: 5It appears from the materials on record that the search and seizure operations were carried out at the premises of the writ applicant underSection 132 of the Income Tax, 1961 (for short, “the Act, 1961”) on 11[th]October 2019. Pursuant to the search and seizure operations, theproceedings of assessment under Sections 153A read with 143(3) of theAct for the assessment years 2014-15 to 2020-21 were undertaken. Thesame resulted in passing of various assessment orders dated 25[th]September 2021. The table below would indicate the assessed incomeunder Section 153A compared to the regular assessment under Section139(1) of the Act: 6It further appears that the writ applicant made a request to theassessing officer to stay the demand as the writ applicant has preferredappeals under Section 264A of the Act against the final assessmentorders. The Assessing Officer asked the writ applicant to deposit 20% ofthe total demand for the purpose of staying the further recovery. 7In such circumstances referred to above, the writ applicant wentbefore the Joint Commissioner. The Joint Commissioner, vide intimationdated 25[th] November 2021, brought to the notice of the writ applicantthat in a case where a demand has been made by the Assessing Officer of20% of the disputed demand by way of pre-deposit and the assessee isstill aggrieved, the assessee has to approach the jurisdictional administrative Principal Commissioner of Income Tax for review of suchdecision of the Assessing Officer. 8The intimation referred to above reads thus: “Subject : Regarding stay for outstanding demand forAssessment Year A.Y. 2014-15 to 2020-21 – reg. Ref : Your stay petition filed on 16.11.2021. …. Please refer to the above. 2Your attention is invited to CBDT OM number F.No.404/72/93-ITCC dated 29/02/2016 and 31.07.2017 which partially modified theinstruction NO.1914 dated 21/03/1996. Clause (c) to para 4 of theabove instruction provides as under:- “In a case where stay of demand is granted by the assessingofficer on payment of 20% of the disputed demand and theassessee is still aggrieved, he may, approach the jurisdictionaladministrative Pr. CIT/CIT for review of the decision of theassessing officer.” In view of the above, you are requested to approach the Pr. CIT(Central), Ahmedabad for a review of the decision of the AssessingOfficer. 3Your petition dated 16.11.2021 accordingly stands disposed off.” 9Thus, it appears that the writ applicant went before an authoritypraying for stay who could be said to be having no jurisdiction to staythe demand of the total liability assessed. 10In such circumstances referred to above, the writ applicant camebefore this Court with the present writ applications. 11When this writ application was taken up for hearing for the first time, an argument was canvassed before us that the case is one of a highpitched assessment, and in such circumstances, at least, till the point oftime the CIT(A) decides the appeals, the demand or the recovery shouldbe stayed. The learned counsel appearing for the writ applicant alsopointed out the financial hardships that the writ applicant may have toface if he is to deposit 20% of the total demand for getting the recoverystayed. 12This Court vide order dated 17[th] January 2022 issued notice andalso passed an ad-interim order in terms of para 8(F). 13Today, when the matter was taken up for further hearing, Mr. M.R. Bhatt, the learned Senior Counsel appeared for the Revenue pointedout that in the appeals filed by the writ applicant before the CIT(A)under Section 246A of the Act, interim applications have also been filedrequesting the CIT(A) to stay the demand or recovery. 12This Court vide order dated 17[th] January 2022 issued notice andalso passed an ad-interim order in terms of para 8(F). 13Today, when the matter was taken up for further hearing, Mr. M.R. Bhatt, the learned Senior Counsel appeared for the Revenue pointedout that in the appeals filed by the writ applicant before the CIT(A)under Section 246A of the Act, interim applications have also been filedrequesting the CIT(A) to stay the demand or recovery. 14In a very recent pronouncement by this very Bench in the case ofHarsh Dipak Shah vs. Union of India [Special Civil Application No.19804of 2021 decided on 4[th] January 2022], this Court took the view that thePrincipal Commissioner, undoubtedly, has the power and the jurisdictionto stay the demand or recovery under Sub-section (6) of Section 220 ofthe Act, but while saying so, this Court also took the view that theCIT(A), being an appellate authority, also has the inherent power to staythe recovery or demand pending the final disposal of the appeal. Wequote the relevant observations in this regards as under: “50.So far as the other two connected writ applications areconcerned, we decline to interfere having regard to the quantum of theamount involved in both the matters. However, we leave it open for thewrit applicants of both the said writ applications to file an appropriateapplication seeking appropriate relief before the First Appellate Authority, i.e, the CIT (Appeals). We are saying so because such powersto grant stay can be implied as inherent power of the First AppellateAuthority. The powers of the Appellate Authorities are indisputablyconcurrent and co-extensive with that of the Assessing Authority butwider and superior in nature. Section 251 of the Act clearly stipulatesthat in disposing of an appeal, the CIT (Appeals) can confirm, reduce,enhance or annul the assessment. Section 251 (1) (c) of the Act furtherprovides that in other cases, he may pass such orders in appeal as hethinks fit. These words harmoniously read, definitely mean that powersof appellate authorities under the Act are wide enough. Such powerscould not be intended to be drained out or rendered meaningless, if thepower to grant stay against the recovery of disputed demand is to betaken away from the first appellate authority. Such implied, necessaryand inherent power must necessarily be read into these provisionsconferring the powers upon the appellate authority to modify theimpugned assessment order in any manner. In specific terms, the firstappellate authority can even enhance the taxable income, while he hasthe power to reduce or completely set at naught the assessment. Thewords "as he thinks fit" in Section 251 (1) (C) are not redundant, as nosuch redundancy can be attributed to the Parliament. Therefore, mereabsence of words "power to grant stay" in Section 251 of the Act cannotmean that such powers are specifically excluded from the jurisdiction ofthe first appellate authority. [See Maheshwari Agro Industries vs. Unionof India, (2012) taxmann.com 68 (Raj.)]” 15We are of the view that no useful purpose would be served byadjudicating this writ application on merits because we want the CIT(A)to look into the interim applications filed by the writ applicant and takean appropriate decision whether any case has been made out for stay ofthe demand or recovery pending the final disposal of the appeals. 16All the three writ applications are disposed of with a direction tothe CIT(A) to take up all the interim applications filed by the writapplicants and pass an appropriate order in accordance with law. Till theCIT(A) decides such applications, the interim order passed by this Courtshall continue. We may only observe that while deciding suchapplications, the CIT (A) shall keep in mind the principles of lawexplained by this Court in the case of Harsh Dipak Shah (supra). 17With the aforesaid, all the three writ applications stand disposedof. (J. B. PARDIWALA, J) CHANDRESH (NISHA M. THAKORE,J)