Wp/103334/2015 Of M/S. Hubballi Electricity Supply Co., Ltd v. The Commissioner Of Income-Tax (Appeals)

IN THE HIGH COURT OF KARNATAKADHARWAD BENCH DATLBD THIS THE 1 DAY OF APRIL 2015 BEEORE THE HON’BLE MR.JUSTICE B.MMANOHA W.P.No.103334/2015 (T-IT) BETWEEN: M/S. HUBBALLI ELECTRICITY SUPPLY CO., LTD., CORPORATE OFFICE, P.B.ROAD,HUBBALLI-580 025,REPRESENTED BY ITSFINANCIAL ADVISER,SRI. BLABDUL WAJIDS/O B ABDUL HAI. AGED ABOUT: 52 YEARS. .. PETITIONER (By Sr. H.RAKAMBIYAVAR, ADV. FORSRL. S PARTHASARATHI, ADV) AND 1.THE COMMISSIONER OFINCOME-TAX (APPEALS),CR BUILDING ANNEXE,IST FLOOR, P.B.ROAD,NAVANAGAR, HUBBALLI-580 025. 2.THER ASST. COMMISSIONER OINCOME-TAX, CRICLE-1(1), HUBBALLIINCOME-TAX, CRICLE-1(1), HUBBALLI 3.THE JOINT COMMISSIONER OF INCOME-TAX,RANGE-1I & 3, NAVANAGARHUBBALLIRANGE-1I & 3, NAVANAGARHUBBALLI 4.THE CHIEF COMMISSIONER OF INCOME-TAX,AAYAKAR BHAVAN, PLOT NO.5,EDC COMPLEX, PATTO PLAZA,PANAJI-GOA.AAYAKAR BHAVAN, PLOT NO.5,EDC COMPLEX, PATTO PLAZA,PANAJI-GOA. RESPONDENTS (By Sri: Y V RAVIRAJ FOR R1-R4) ----- THIS WP IS FILED UNDER ARTICLES 226 AND 227OF THR CONSTITUTION OF INDIA PRAYING TOQUASH THE ORDER OF THE 1ST RESPONDENTDATED 18.03.2015 FOR THER ASSESSMENT YEAR 2011-1(ANNEXURE-K) AND QUASH THE ORDER OF THE 3RDRESPONDENT.DATED04.02.2015FOR.THEASSESSMENT YEAR 2011-12 (ANNEXURE-G) AND ETC) THIS WRIT PETITION IS ARE COMING ON FORPRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THISCOURT MADE THER FOLLOWING ORDER Petitioner in this writ petition has sought for quashing theotder dated 18-03-2015 passed by the First respondent rejectingthe application filed by the petitioner seeking for stay of collectionof tax for the assessment year 2011-12, 2.The grievance of the petitioner is against the assessmentorder for the assessment year 2011-12 and also Rectification orderdated 23-12-2014 under Section 154 of the Income Tax Act, 1961and he preferred an appeal before the Commissioner of IncomeTax (Appeals) (hereinafter referred to as ‘the First AppellateAuthority’). The petitioner also filed an application seeking forstay of collection of tax demanded on the basis of the assessmentotder or the rectification order to an extent of Rs.60,47,53,790/-.However, the First Appellate Authority without considering theapplication for grant of stay of collecting tax passed the order incryptic manner on 18-3-2015, which reads as under: JWith reference to the letter dated 05-02-2015, this7s to informyou thatyour stay applcation is not considered. However, the early hearing of your appeal havingNo.444/ CIT(A)/HBL/2014-15 is considered. So younstay application 1s rejected.” While rejecting the application for stay of collection of tax, thepetitioner was not heard. Being agerieved by the said order, thepetitioner preferred this writ petition. In the meanwhile, the bankaccounts of the petitioner in Syndicate Bank, ING Vysya Bank,State Bank of Mysore, Canara Bank and Viaya Bank wereattached. This Court while issuing notice to respondents granted|an interim order of stay of collection of tax demanded for theassessment year 2011-12. Before communication of the saidotder, the respondent had collected a sum of Rs.2,44,46,740/- andalso collected a Demand Draft for a sum of Rs.1,89,32,484/-,The said Demand Draft is yet to be encashed, 2.It is the contention of the petitioner that attachment of bank accounts and encashment of some amount is contrary to law. The Appellate Authority without considering the contentions urged in the appeal and without hearing the petitionerrejected the stay application, which is contrary to law. 2.It is the contention of the petitioner that attachment of bank accounts and encashment of some amount is contrary to law. The Appellate Authority without considering the contentions urged in the appeal and without hearing the petitionerrejected the stay application, which is contrary to law. 4 Section 246-A of the Income Tax Act provides for anappeal before the Appellate Authority. The Appellate Authority 1sbound to consider the appeal in proper perspective and passnecessaty ofders, otherwise, the very purpose of providingstatutory appeal will be frustrated. In the instant case, thepetitioner being agerieved by the assessment order as well as therectification order, had filed an appeal along with the applicationseeking for stay of the said orders. The First Appellate Authoritywithout hearing the petitioner rejected the said application, whichis contrary to law. The order passed by the First AppellateAuthority is not a speaking order. Hence, I feel that the FirstAppellate Authority has to reconsider the matter afresh and passappropriate orders on the application filed by the petitioner forerant of stay of collection of the tax demanded. Hence, it 1sappropriate to direct the First Appellate Authority to reconsider the matter afresh and pass orders in accordance with law afterhearing the petitioner, 5,It was brought to the notice of the Court that during thependency of this writ petition, Rs.4,33,79,224/- has beenrecovered from the petitioner. The demand notice was issued forRs.60,47,53,790/- and the amount collected is less than 7%. Theamount collected may be adjusted to the dues. On the otherhand, if the petitioner succeeds 1n the appeal, the respondent shallrefund the said amount with interest, in accordance with law. 6,With the above observations, the appeal 1s allowed,Annexute-K is quashed and the matter is remanded to the FirstAppellate Authority to reconsider both the appeal as well as thestay application in accordance with law, as expeditiously aspossible. In view of quashing the order dated 18-03-2015,attachment of bank accounts will have to be withdrawn by therespondents, The First Appellate Authority 1s directed to dispose of the stay application within a period of 30 days and the main appealwithin three months from the date of receipt of a copy of thisorder, The respondents are directed not to take any coercive steps till the stay application is considered, SD/- JUDGE -* mpk