Wp/13926/2022 Of Apr Jewellers Private Limited v. The Commissioner Of Income Tax (Appeals)

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) FRIDAY, THE TWENTY SECOND DAY OF APRILTWO THOUSAND AND TWENTY TWO PRESENT THE HON'BLE SRIJUSTICE UJJAL BHUYANANDTHE HON'BLE MRS JUSTICE SUREPALLI NANDAANDTHE HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 1 3926 0F 2022 Betwee n: APR JEWELLERS PRIVATE LIVITED, (pan No ) Rep. Bv ttsFlat It4anaging No.3, Director Qloynd Sri Floor, Rama S_4-Tirumata Krshna Rebdy Ambati, Office T5wers, Opp. Hotel atll.flo.'a-_O-_2g0,Centrif -parf<iHyderguda' Hyderabad -500029 ...pErroNER AND 1 . The Commissioner of lncome Tax(Appeals), Hyderabad-1.2. The lncome Tax Officer, Ward 1(2),I ncome rax Depa rtment, 1[t"JBBi,tr*r,2. The lncome Tax Officer, Ward 1(2),I ncome rax Depa rtment, 1[t"JBBi,tr*r, Petition under Article 226 of the constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High court may bepleased to pass an order or orders or a writ more particularly one in the nature ofwrit of Mandamus and declare the action of the Respondent No. 1 in disposingof the stay Petition dt. 0510412021 fited by the writ petitioner against thewrit of Mandamus and declare the action of the Respondent No. 1 in disposingof the stay Petition dt. 0510412021 fited by the writ petitioner against theAssessment Order No. ITB A/AST/S/143 (3)t2019- 2Ol1O22B24Og4 dt. 21-12-201 9 for the A.Y.201 7-1 8 of the Respondent No. 2 vide orders dt. 04.03.2022 bydirecting the petitioner herein to deposit a sum equivalent to 20% of theoutstanding demand of Rs. 1,48,02,0441- so as to avoid the petitioner beingtreated as not being default of the above said demand as illegal, arbitrary andtreated as not being default of the above said demand as illegal, arbitrary andagainst the Principles of Natural Justice and in violation of Article 14 andcontrary to the relevant instructions issued by CBDT and contrary to theguidelines issued by the judgements of the Hon'ble High courts andguidelines issued by the judgements of the Hon'ble High courts andconsequently set aside the order dt. 04.03.2022 vide Appeal No CIT(A),Hyderabad-1/1 043012019-20 passed by Respondent No. 2 //{ lA NO: 1 oF 2022 Petition under Section 151 CPC praying that in the circumstances statedin the affidavit filed in support of the petition, the High Court may be pleased tostay of all further recovery proceedings of the Respondent No.2 till the disposalof the present petition Counsel for the Petitioner: SRI SRIRIPURAM KESHAVA, COUNSEL FORSRI CHALLA GUNARANJAN Counsel for Respondents: SRI K. RAJI REDDYSr. SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER I UB,J&SN,JW,P.No.13926 of 2022 THE HONOURABLE SRI JUSTICE UJJAL BHUYANAND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA 1VRIT PETITION No.13926 of 2022 ORDER: [(Per ]Hon'ble Sn Justice [UljaL ]Bhugan) Heard Mr.Siripuram Keshava, learned counselappearing on behalf of Mr. Challa Gunaranjan, learnedcounsel for the petitioner and Mr. [K. ]Raji Reddy, [learned]Standing Counsel for Income Tax Department for there spo n dents. 2. Petitioner is aggricved by order dated04.O3.2022 passed b5, the 1"t respondent to the effect thatpetitioner u,ould nol be trcated as being in default if thepetitioner deposits 2Oo/a of the outstanding demand on orbefore 20.03.2022. 3. It may be mentioned that petitioner15 an assessee under the Income Tax Act, 196 i (briefly referred W.P.No.13926 of 2022 to hereinalter as 'the Act') [assessed ][to ][tax ][n'ithin ][the]jurisdiction of respondent No.2. 4. For the assessment [year 2017-18, ][respondent]No.2 passed assessment [order dated ][21.12.2019 ][under]Section 143(3) of the [Act ][making certain additions ][under]Section 69,,{ of the Act. [Against ][the ][returned ][income ][of the]petitioner of Rs.1,78,860'00, [by the ][aforesaid ][assessment]order, income of the [petitioner ][was ][assessed ][at]Rs. 1,50,03,952.0O. 3. It may be mentioned that petitioner15 an assessee under the Income Tax Act, 196 i (briefly referred W.P.No.13926 of 2022 to hereinalter as 'the Act') [assessed ][to ][tax ][n'ithin ][the]jurisdiction of respondent No.2. 4. For the assessment [year 2017-18, ][respondent]No.2 passed assessment [order dated ][21.12.2019 ][under]Section 143(3) of the [Act ][making certain additions ][under]Section 69,,{ of the Act. [Against ][the ][returned ][income ][of the]petitioner of Rs.1,78,860'00, [by the ][aforesaid ][assessment]order, income of the [petitioner ][was ][assessed ][at]Rs. 1,50,03,952.0O. 5. Against the aforesaid order [of ][assessment,]petitioner has preferred appeal [before ][the ][1"t ][respondent']It is stated that the appeal [is ][pending.] In the meanwhile, 2"d [respondent ][issued] 6. demand notices, which [were foliowed ][by ][garnishee notices']Though petitioner had filed [a ][stay ][petition ][before ][the ][1"t]respondent on 05.04.202 [1, ][the ][same ][was ][not ][considered]while the petitioner faced [demand ][with ][garnishee ][notices.] UB,J&SN,JW.P.No. 13926 of 2022 7. It was at that stage that petitioner hadapproached this Court by filing W.p.No.3 1826 of 2027.The said writ petition r,r,as disposed of on 03.I2.2021ASund er: "6. After hearing learned counsel for the partiesand on due consideration, we are of the view that it wouldmeet the ends of justice if a direction is issued to theAppellate Authority i.e., respondent No. 1 to take up thestay petition of the petitioner dated OS.O4.2O2l and passappropriate orders thereon in accordalce with law. We areof the further opinion that the said stay petition should bedecided within a period of six weeks from the date of receiptof a copy of this order. Till such time, the demald pursuantto assessment orderdated 21, 12.2019 shall remarnstayed." B. Thereafter, lst respondent passed a long orderdated 04.03 .2022 grantrng conditionai stay. Relevantportion of the order dated 04.03.2022 reads as under: "lo.l The assessee appeilant will be treated as notbcing in dcfault in respect of the amount ol demand of_Rs.1,48,02,444 [outstanding ][at ][present, (after payment of] amount as indicated [below), ][subject ][to the ][followrng]conditions being [fu1fr1led.] 1. The appellant deposits [a sum ][equivalent ][to ][2O"/o]of the above outstanding [demand ][of]Rs.7,48,O2,444 on or [before ][2O.O3.2O22 ][a:ncl]submits evidence of such [payment of demand ][to]the Assessing Offrcer.of the above outstanding [demand ][of]Rs.7,48,O2,444 on or [before ][2O.O3.2O22 ][a:ncl]submits evidence of such [payment of demand ][to]the Assessing Offrcer. 2. The appellant must [cooperate ][in the ][early]disposal of its [appeal ][and ][make ][its ][necessary]submissions in compliance [of ][notice(s) ][issued ][in ][this]regard.disposal of its [appeal ][and ][make ][its ][necessary]submissions in compliance [of ][notice(s) ][issued ][in ][this]regard. The above conditior-rs having [been ][ful{illed ][:] 1. The appeal on merits in [the ][case ][of ][the ][appellant]will be taken up, out of [turn ][for ][early disposal ][for]which notice for hearing [is ][being ][issued ][separately']will be taken up, out of [turn ][for ][early disposal ][for]which notice for hearing [is ][being ][issued ][separately']2. No coercive measures [will ][be ][taken ][for ][recovery of]reminder oI outstar-rding [demald ][against ][the]appellant if the appellant [complies ][with ][Sr'No ][1]above.reminder oI outstar-rding [demald ][against ][the]appellant if the appellant [complies ][with ][Sr'No ][1]above. 3. This order will [be reviewed ][after expiry of 3 ][months]from the date of order, [or ][if ][the ][appeal order ][is ][not]passed by such time Period.from the date of order, [or ][if ][the ][appeal order ][is ][not]passed by such time Period. 4 . This order will not [impinge ][on the right ][of ][the]Assessing oflicer to [adjust refunds arising, ][if ][arry]against the demand.Assessing oflicer to [adjust refunds arising, ][if ][arry]against the demand.\ 3. This order will [be reviewed ][after expiry of 3 ][months]from the date of order, [or ][if ][the ][appeal order ][is ][not]passed by such time Period.from the date of order, [or ][if ][the ][appeal order ][is ][not]passed by such time Period. 4 . This order will not [impinge ][on the right ][of ][the]Assessing oflicer to [adjust refunds arising, ][if ][arry]against the demand.Assessing oflicer to [adjust refunds arising, ][if ][arry]against the demand.\ 5. This order is without [prejudice ][to ][the ][proceedings]and hna1 outcome [the ][appeal ][to ][be decided ][on ][the]grounds of appeal filed by the appellant."and hna1 outcome [the ][appeal ][to ][be decided ][on ][the]grounds of appeal filed by the appellant." UB,J&SN,JW.P.No.13926 of 2022 9. On a perusal of the impugned order datedO4.O3.2O22, it is seen that 1st respondent was guided bythe office memorandum dated 31.07.2017 of the CentralBoard of Direct Ta-xes (CBDT), as per which stay may begranted in cases where appeals are pending subject topayment o{ 2Oak of the disputed demand. Thus, foilowingthe CBDT office memorandum dated 31 .O7 .2077 the, impugned order came to be passed. 10. Supreme Court in Principal Commissioner of Income Tax vs. L.G. Electronics India Private Ltd,r,observed that an administrative circular would not operateas a factor on the Commissioner since it is a quasi-judicialauthority. Clarifying further, Supreme Court held that itwould be open to the authority on the facts of individualas a factor on the Commissioner since it is a quasi-judicialauthority. Clarifying further, Supreme Court held that itwould be open to the authority on the facts of individualcases to grant deposit orders of a lesser amount than 2Oo/opending appeal.pending appeal. r (2018) 18 Supreme Court Cases 447 8 UB,J&SN,JW.P.No.13926 of 2022 11. Needless to say, [1"t ][respondent as ][the ][appellate] authority exercises [quasi-judicial ][powers' ][Power ][to]consider prayer lor [stay ][is ][incidental ][and ][anci1lary ][to ][the]power to hear appeals. [As ]a [quasi-judicial ][authority,]Commissioner [(Appeals) ][is ][not bound by the administrative]circulars issued by CBD'I'. [He has ][to ][apply ][his ][olr'n]independent mind in [the ][facts and ][circumstances ][of ][each]case. 12 . Considering the [above ], [the ][impugned ][order] dated 04.03.2022 is [hereby ][set ][aside. ][The matter ][is]remanded back to the [lst ][respondent ][for ][a ][fresh ][decision ][on]the prayer for stay [of ][the ][petitioner ][in ][accordance ][with ][1au']after complying with [the ][principles ][of ][natural ][justice' ][This]shal1 be done within a [period ][of ][four ][(04) weeks ][from ][the]date of receipt of a copy [of ][this ][order. ][Ti1l ][such ][time,]demand pursuant to [the ][assessment ][order ][dated]21 .12.2019 sha1l remain [staYed.] UB,J&SN,JW.P.No.13926 of 2022 13. This disposes of the [Writ ][Petition. ][However,] there shall be no order [as ][to ][costs.] 14. As asequel, miscellaneous [applications] per-rding, if any , in this Writ [Petition, ][sha11 ][stand ][closed.] SD/-T.SRINIVASASSISTANT //TRUE SECN#oFFICER \oneFair""or,,r..l[[t?]l3i.f ,:?,iH?:i",: [jiir^'BHUYAN] oneFairc"py.(H.E#?i;?!"=,,'ll1'i,H:rJ3i:jii'"ALLTNANDA To' rf lncome [Tax (Appeals)' Hyderabad-l']""'"^U;d (2i' iibome raibepartment' [Hvderabad]I Ii3 [P.:['TJT:T3-"; ]i. lljS;&?"?lretary, [union ][or ][lndia' ][tr/inistry ][or ][Law' ][Justice and ][companv]5t[3 S;]:u,?Hirngrnu [Advocates Association ][Library' Hish ][court],3llEE 6.lli [ftffi;:tl:#Y.;:ilsJ33Y3l'u,un'"n'i ][(oPuc)]7.#iif, 7.B.Two CD Copies9.One SPare [CoPY]MBCsB1AJ I 2 HIGH COURT DATED: [2210412022] kiE [SiA]r€(t+'\)))02MAY2B?.?rci1;F,..7[...),- ]t ORDER WP.No.13926 [of ][2022] DISPOSING WITHOUT