Sinhgad Technical Education Society v. The Assistant Commissioner Of Income Tax & Ors.…

pvr 1/8 wp7456-13.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7456 of 2013 Sinhgad Technical Education Society.... Petitioners Vs. 1.The Assistant Commissioner of Income Tax & Ors.… Respondents ---- Mr.J.D.Mistry, Senior Advocate with Mr.Niraj Seth i/b. Mr.Nitin Dhumal, for the Petitioner. Mr.Tejveer Singh, for the Respondents-Revenue. ---- CORAM : M.S.SANKLECHA & G.S.KULKARNI, JJ. P.C.:- DATE : 28 JULY 2014---- We heard this petition alongwith Writ Petition no.7458 of 2013 in respect of Assessment Year 2008-09 filed by the petitioners. The facts and submissions in both the petitions are substantially identical with regard to stay of demand. However, we have passed separate orders as an additional submission is made by the Revenue in this petition. 2.This petition under Article 226 of Constitution of India challenges the order dated 13.7.2012 passed by the Assessing Officer, order dated pvr 2/8 wp7456-13.doc 28.12.2012 passed by the Commissioner of Income Tax and order dated 17.7.2013 passed by the Chief Commissioner of Income Tax. All the aforementioned orders reject the petitioners application for stay of the demand consequent to the assessment order dated 29.12.2011 for the Assessment Year 2009-10 passed under the Income Tax Act,1961 (the Act). 3.Consequent to the assessment order dated 29.12.2011 a demand of Rs.776.60 lakhs was raised upon the petitioners. The petitioners have preferred an appeal from the order dated 29.12.2011 to the Commissioner of Income Tax (Appeals). In terms of Section 220(6) of the Act, pending the disposal of its appeal by the Commissioner of Income Tax (Appeals), the petitioners by an application dated 23.1.2012 sought a stay of the demand from Assessing Officer. The Assessing Officer by order dated 13.7.2012 granted a stay of the demand on deposit of 50% of the demand. 4.In view of the order dated 29.12.2011 of the Assessing Officer, the petitioners preferred an application to the Commissioner of Income Tax on 3.8.2012 seeking a stay of demand of Rs.776.60 lakhs till the disposal of the appeal by the Commissioner of Income Tax (Appeals). By order dated 28.12.2012 the Commissioner of Income Tax considered the petitioners' case and conduct in respect of the assessment year 2006-07 and concluded that for the pvr 3/8 wp7456-13.doc subject assessment year the petitioner should be directed to deposit 25% of the demand of Rs.776.60 lakhs for the grant of stay till the disposal of its appeal by Commissioner of Income Tax (Appeals). 5.In view of orders dated 13.7.2012 and 28.12.2012 of the Assessing Officer and Commissioner of Income Tax respectively, the petitioners preferred an application for Stay of demand to Chief Commissioner of Income Tax on 12.1.2013 seeking a stay of the demand of Rs.776.60 lakhs for the assessment year 2009-10. In its application, the petitioners sought to make out a prima facie case and also submitted that the payment would cause them great financial hardship. On 17.7.2013, the Chief Commissioner of Income Tax referred to the facts with regard to the assessment year 2006-07 and concluded that the directions given by the Commissioner of Income Tax by his order dated 28.12.2012 calls for no interference. Thus the stay of the demand was subject to the petitioners depositing 25% of the demand of Rs.776.60 lakhs for the assessment year 2009-10. 6. The petitioners have filed this petition essentially challenging the 6. The petitioners have filed this petition essentially challenging the impugned orders dated 13.7.2012, 28.12.2012 and 17.7.2013 being passed without following the directions of this Court in the case “KEC International Vs. B.R.Balkrishnan, ((2001) 251 ITR 158 (Bom)).” which lays down the factors to be pvr 4/8 wp7456-13.doc considered while disposing of the Stay Application. Besides it is contended that the hearing of its appeal before the Commissioner of Income Tax (Appeals) for the subject assessment year has already been completed and orders are awaited. In these circumstances, it is submitted that the petitioners should not be called upon to deposit any amount at this stage. It is pointed out to us that before the Chief Commissioner of Income Tax the petitioners had pointed out that the appeal for the subject Assessment Year viz. 2009-10 has been completed by the Commissioner of Income Tax (Appeals) on 4.9.2012 and orders thereon were awaited. The Chief Commissioner of Income Tax in his order dated 17.7.2013 records that the office of the Commissioner of Income Tax (Appeals) has informed him that final hearing has not yet been completed. It is submitted that even after the order dated 17.7.2013 the petitioners were not called for personal hearing in respect of the assessment year 2009-10 nor any order was received from the Commissioner of Income Tax (Appeals). 7.Mr.Tejveer Singh,learned Counsel for the Revenue supports the impugnedorderandsubmitsnointerferenceis calledfor by this Court. In particular oninstructionshestates that in respectof AssessmentYear2009-10the Commissioner of Income Tax (Appeals) had granted hearing to the petitioners on 20.8.2013 and it was adjourned to 23.8.2013.However, at that point of time the Commissionerof Income Tax (Appeals) was of the view that the next date of pvr 5/8 wp7456-13.doc hearing would be communicated after the assessment proceedings are centralised. It is pertinent to note that this submission on behalf of Revenue is only restricted to Assessment Year 2009-10 and not made for Assessment Year 2008-09. 8.We have considered the rival submissions. The Assessment Order for Assessment Year 2009-10 was passed on 29.12.2011. The stay applications filed by the petitioners were disposed of by the Assessing Officer, Commissioner of Income Tax and the Chief Commissioner of Tax by orders dated 13.7.2012, 28.12.2012 and 17.7.2013 respectively without having followed the directions of the Court “KEC International Ltd.” (supra). Be that as it may, in the present facts we find that the hearing of the appeal for Assessment Year 2009-10 have been completed on 4.9.2012 by the Commissioner of Income Tax (Appeals). Thereafter no order has yet been passed by the Commissioner of Income Tax (Appeals). The submission of Mr.Tejveer Singh, learned Counsel for the Revenue that the hearing of appeal before the Commissioner of Income Tax (Appeals) for Assessment Year 2009-10 is kept pending in view of centralising proceedings, is not acceptable for the simple reason that for the Assessment year 2008-09 the petitioner was given personal hearing on 16.1.2014. In case the proceedings had to be centralised as contended by Mr.Singh on instructions, then the appeal for the Assessment Year 2008-09 could not have been heard on pvr 6/8 wp7456-13.doc pvr 6/8 wp7456-13.doc 16.1.2014 by the Commissioner of Income Tax (Appeals). The fact that the hearing has already been concluded by the Commissioner of Income Tax (Appeals) and the order is awaited, the requirement of depositing even 25% of the tax demand in the present facts for the grant of stay is not called for. This is particularly so as under the Act there is no requirement that the amount of demand confirmed by the Assessing Officer should be deposited / paid before the appeals can be entertained by the Commissioner of Income Tax (Appeals) as is the case in Central Excise Act,1944 and Customs Act,1962. In any view of the matter, the stay which is granted under Section 220(6) of the Act, enures only till Commissioner of Income Tax (Appeals) disposes of the appeal. 9.One more aspect which must be adverted to is Section 250 of the Act which deals with the procedure for appeal before Commissioner of Income Tax (Appeals). Section 250(6A) of the Act reads as under:- “(6A)In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) of section 246A.” From the above provisions, it is very clear that the Commissioner of Income Tax (Appeals) is obliged to try and dispose of the appeal wherever it is possible pvr 7/8 wp7456-13.doc within a period of one year from the end of the financial year in which the appeal has been filed. In this case the appeal has been filed prior to 31.3.2012 and has already been heard by the Commissioner of Income Tax (Appeals) and no acceptable reason is forthcoming from the Revenue as to why no order has been yet passed. Considering the conduct of the Revenue in this particular case, it would be appropriate that the requirement of depositing and/or making payment of 25% of Rs.776.60 lakhs for the assessment year 2009-10 for grant of stay as directed by impugned orders dated 13.7.2012, 28.12.2012, 17.7.2013 be set aside. 10.However, keeping in mind the fact that the last hearing has taken place as far as back on 4.9.2012, the Commissioner of Income Tax (Appeals) would grant a fresh hearing to the petitioners before the appeal for Assessment Year 2009-10 is finally disposed. We trust that the Commissioner of Income Tax (Appeals) shall dispose of the appeal for Assessment Year 2009-10 as expeditiously as possible preferably within a period of three months from today. However, the respondents-Revenue would not take any coercive proceedings for a period of two weeks from the date of communication of the order of Commissioner of Income Tax (Appeals) in the appeal for Assessment Year 2009-10 from Assessment Order dated 29.12.2011 of the Assessing Officer. It is made clear that we have not considered the merits of the petitioner's case in appeal. pvr 8/8 wp7456-13.doc 11. Accordingly, the petition is disposed of in the above terms with no order as to costs. (G.S.KULKARNI, J.) (M.S.SANKLECHA, J.)