T Which, An Appeal Hasbeen Preferred Before The Respondent v. The Assistant Commissioner Of Income

IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THER 1 DAY OF MARCH, 2019 BEFORE: THR HON’BLE MRS. JUSTICK S.SUJATHA ;WRIT PETITION No. 10443 OF 2019 (TIT) BETWEEN: M/S KHODAY ESHWARSA AND SONSNO.9, KHODAY HOUSE, SESHADRI ROAD|GANDHI NAGAR, BENGALURU — 560 OO9REPRESENIED BY ITS PARINER SRI. K. LSWAMY SON OF LATE SRI. K. LAKSHMANSA _. PRHTITIONBER |BY SRI. A. SHANKAR, SENIOR ADVOCATE|SRI. SUKUMAR. 8, ADVOCATE] | AND: 1.|DBPUTY COMMISSIONER OF INCOME TAX.CIRCLE -5(2)(1),. ROOM NO.316, |, FLOOR, BMTC BUILDING80 FEET ROAD, 6 BLOCK.KORAMANGALA, BENGALURU —- 560 O95.CIRCLE -5(2)(1),. ROOM NO.316, |, FLOOR, BMTC BUILDING80 FEET ROAD, 6 BLOCK.KORAMANGALA, BENGALURU —- 560 O95. «|THE ADDITIONAL COMMISSIONEROF INCOME TAX, BENGALURU -5(2), FLOOR, BMTC BUILDING, 80 FEET ROAD,|6TH BLOCK, KORAMANGALA,BBNGALURU — 560 095.OF INCOME TAX, BENGALURU -5(2), FLOOR, BMTC BUILDING, 80 FEET ROAD,|6TH BLOCK, KORAMANGALA,BBNGALURU — 560 095. 3.|THE PRINCIPAL COMMISSIONER OF |INCOME TAX, BMTC BUILDING, |80 FEET ROAD, 6[‘T]BLOCK,KORAMANGALA, BENGALURU - 560 O95.INCOME TAX, BMTC BUILDING, |80 FEET ROAD, 6[‘T]BLOCK,KORAMANGALA, BENGALURU - 560 O95. 4THE COMMISSIONER OF [INCOMETAX (APPEALS)-95, KFLOORBMTC BUILDING, 80 FEET ROAD,TAX (APPEALS)-95, KFLOORBMTC BUILDING, 80 FEET ROAD, -9.- [‘T]BLOCK,KORAMANGALA,BBNGALURU — 560 095. _ RESPONDENTS IBY SRI.K.V. ARAVIND, ADVOCATE] THIS WRIT PETITION [IS FILED UNDER ARTICLES 226 &22/7 OF THE CONSTITUTION OF INDIA, PRAYING TO QOUASHTHERE ORDER PASSED BY THE R-1 VIDE COMMUNICATIODATED 03.04.2018 (ANNEXURE-A) FOR THE ASSESSMENT)YEAR 2015-16, PENDING DISPOSAL OF THE APPEAL BY R-4.. THIS PETITION COMING ON FOR PRELIMINARY HEARING,THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER Learned Counsel Sri K.V.Aravind accepts noticefor the respondents. 2. Though the petitioner has sought for severalreliefs in the prayer column of the writ petition, at thetime of arguments, the relief is restricted only to prayer- (f) which reads as follows: “f) Issue a writ or order in the nature of|mandamus or any other writ or order to directthe respondent No.3 to dispose of the stayapplication filed by the petitioner on 16.5.2018(Annexure-L) and expeditiously.” -3- 3. The petitioner is a partnership firm. Theassessments were concluded for the assessment year —2015-16 under Section 143(3) of the Income-Tax Act,1961 (for short, the ‘Act’), against which, an appeal hasbeen preferred before the respondent No.4. It appears,the respondent No.4 has heard the assessee-petitioneron 13.3.2019 and reserved for orders. 4It is the grievance of the petitioner that thepetitioner had filed an application before the respondentNo. 1forstayoT|collectionoT|demandoT|Rs.6,94,00,840/- as per the order under Section 143(3)till the disposal of the appeal. The respondent No.1.insisted the petitioner to pay 20% of the outstandingdemand without considering the stay application filedby the petitioner vide communication dated 26.2.2018. ©It transpires that the petitioner wrote a letter dated0.3.2018 in response to the said communication by therespondent No.1 and requested to consider the stay -4- application. Respondent No.1 dismissed the applicationon 3.4.2018 directing the petitioner to pay 20% of theoutstanding demand. Aggrieved by the order of therespondentNo. 1,thepetitionerapproached|the|respondent No.2 seeking absolute stay of demandunsuccesstully. Aggrieved by the order of the|respondentNo.2,|thepetitionerapproachedtherespondent No.3. However, no orders are passed by therespondent No.3 so far. Hence this writ petition. | o. The learned counsel for the petitioner wouldsubmit that it was obligatory on the part of therespondent No.3 to pass orders on the stay applicationfiled by the petitioner. The demand of 20% of theoutstanding demand by the authorities is contrary tothe judgment of this court in the case ofFlipkart India|Private Limited vs. The Assistant Commissioner of Income. -4- application. Respondent No.1 dismissed the applicationon 3.4.2018 directing the petitioner to pay 20% of theoutstanding demand. Aggrieved by the order of therespondentNo. 1,thepetitionerapproached|the|respondent No.2 seeking absolute stay of demandunsuccesstully. Aggrieved by the order of the|respondentNo.2,|thepetitionerapproachedtherespondent No.3. However, no orders are passed by therespondent No.3 so far. Hence this writ petition. | o. The learned counsel for the petitioner wouldsubmit that it was obligatory on the part of therespondent No.3 to pass orders on the stay applicationfiled by the petitioner. The demand of 20% of theoutstanding demand by the authorities is contrary tothe judgment of this court in the case ofFlipkart India|Private Limited vs. The Assistant Commissioner of Income. Taxin Writ Petition Nos.1339-1342/2017. On thehighpitched assessment determined by the authorities, no 20% demand could be made pursuant to the stayapplication filed. 6. The learned counsel for the Revenue fairly andrightly submits that the respondent No.3 may bedirected to consider the stay application filed by thepetitioner in accordance with law and pass appropriateorders. 7. In view of the aforesaid submissions made bythe learned counsel for the parties, it is necessary todirect the respondent No.3 to consider the stayapplication filed by the petitioner on 15/16.5.2018 andtake a decision in the matter considering the genuinehardship that would be caused to the petitioner in casethe petitioner is directed to pay 20% of the disputeddemand placing reliance on Instruction No.4(B)(b) of theCircular dated 29.2.2016. In view of the assessment|order being unreasonably highpitched and the matter is heard by the appellate authority, the assessee isrequired to be protected from coercive action, if any, tobe initiated by the Department until a decision is takenby the appellate authority. | 8. Under these circumstances the respondentNo.3 is directed to consider the stay application filed bythe petitioner on 19/16.5.2018 and take a decision inthe matter in an expedite manner Keeping in mind theobservations made hereinabove. The petitioner shallappear before the respondent No.3 on 18.33.2019without expecting any notice. No coercive recoveryaction shall be initiated by the authorities till thedecision is taken by the respondent No.3. | With the aforesaid observations and directions, the writ petition stands disposed of. ©