Wp/15850/2022 Of M/S Navanatha Educational Society v. The Income Tax Officer

/ HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Original Jurisdiction)TUESDAY ,THE NINETEENTH DAY OF APRILTWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE UJJAL THE HONOURABLE MRS JUSTICE SUREPALLI WRlT PETITION NO: 15850 OF 2022 Between: M/s Navanatha Educational Society, [C/o ][Narendra ][Degree College, ][Survey]Telangana. Represented No.. 21 , 46311 , 46312, Perkit, Armoor, by its Secretary Nizamabad [cum ][Correspondent, ][District ][- ][Mr. ][503 ][Dasari][224']Shankar, S/o lMr. D.Rajaram. ...PETITIONER AND 1. The lncome Tax Officer, Ward [- ]1, Nizamabad, [lncome ][Tax Office, ][6-2-15613']Subhash Nagar, Nizamabad [- ]503 002, [Telangana]Subhash Nagar, Nizamabad [- ]503 002, [Telangana] 2. The Principal Commissioner of lncome [Tax - ][2, Hyderabad' ][Signature]Towers, Sy. No.. 6(P) of Kondapur, [Sy. ][No". ][37(P) ][of ][Kothaguda, Opposite]Botanicbl Gardens, Serilingampally [M-andal, ][Ranga Reddy District, Hyderabad]- 500 084, TelanganaTowers, Sy. No.. 6(P) of Kondapur, [Sy. ][No". ][37(P) ][of ][Kothaguda, Opposite]Botanicbl Gardens, Serilingampally [M-andal, ][Ranga Reddy District, Hyderabad]- 500 084, Telangana 3. The National Faceless Appeal [Centre ][(NFAC), Delhi, ][lncome Tax]Department, Ministry of Finance, Government [of ][lndia]Department, Ministry of Finance, Government [of ][lndia] 4. The State Bank of lndia, Main [Branch, ][Armoor, Nizamabad ][District ][- ][503 ][224] ...RESPONDENTS Petition under Article 226 of [lhe ][Constitution ][of ][lndia ][praying ][that in ][the]circumstances stated in the affidavit filed [therewith, ][the ][High ][Court may ][be]pleased to issue a writ, order or Direction, one, more [particularly ][in ][the ][nature ][of]Mandamus declaring. a.the order of the ['l ]st Respondent [(served ][on ][07.03-2022), ][in directing ][the]Petitioner to [pay ]20 [percentage ]of [the ][disputed demand, ][pending disposal ][of ][the]appeal of the Petitioner before [the ][4th ][Respondent, for ][the ][Assessment Year ][2017]- 18, as arbitrary, illegal, bad in law, bereft of [any reasons, violative of principles ][of]natural [justice ]and to consequently [set-aside ][the ][same ][and grant ][stay ][of ][any]recovery, [pending ]disposal of the [Petitioners ][appeal before ][the ][1st ][Appellate]Authority, in the interests of [justice, ][and] . b.the notice u/s 226(3) ot the lncome Tax Act, 1961, dated 2311112021,issued by the ['1 ]st Respondent to the bankers of the Petitioner, i.e., the 4thRespondent herein, as arbitrary, illegal, bad in law, violative of [principles ]of naturaljustice and to consequently set-aside the same in the interests of justice, and topass lA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated inthe affidavit flled in support of the petition, the High Court may be pleased tosuspend the notices uls 226(3) of the lncome Tax Act, 1961, dated 2311112021 ,issued by the 1 st Respondent to the bankers of the Petitioner, i.e., the 4thRespondent herein, pending disposal of the above Writ Petition. lA NO:2 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated inthe affidavit filed in support of the petition, the High Court may be pleased to grantstay of all further proceedings, including any recovery, [pending ]disposal of theabove Writ Petition; Counsel for the Petitioner:SRl. A V A SIVA KARTIKEYA Counsel for the Respondent Nos. 1 to 3: SRl. A RADHA KRISHNA, SC FOR lT Counsel for the Respondent No. 4: SRI A.MURALI The Court made the following: THE HONOURABLE SRI JUSTICE UJJAL BHUYANANDTHE HONOURABLE MRS JUSTICE SUREPALLI NANDAWRIT PETITION No. 15850 of 2022 ORDER: (Per Hon'ble Si Justice Ujjal Bhuyan) Heard Mr.A.V.A. Siva Kartikeya, learned counsel for [the]petitioner and Mr. A.Radha Krishna, learned StandingCounsel Income Tax Department for respondent [Nos. ]i [to ][3.] Counsel for the Petitioner:SRl. A V A SIVA KARTIKEYA Counsel for the Respondent Nos. 1 to 3: SRl. A RADHA KRISHNA, SC FOR lT Counsel for the Respondent No. 4: SRI A.MURALI The Court made the following: THE HONOURABLE SRI JUSTICE UJJAL BHUYANANDTHE HONOURABLE MRS JUSTICE SUREPALLI NANDAWRIT PETITION No. 15850 of 2022 ORDER: (Per Hon'ble Si Justice Ujjal Bhuyan) Heard Mr.A.V.A. Siva Kartikeya, learned counsel for [the]petitioner and Mr. A.Radha Krishna, learned StandingCounsel Income Tax Department for respondent [Nos. ]i [to ][3.] 2. By filing this petition, under Article 226 ol tbeConstitution of India, petitioner [seeks ][quashing ][of ][undated]communication of respondent No.l [(at ][page ]62 [of ][paper]book). 3. Be it stated that petitioner is an assessee underthe Income Tax Act, 1961(briefly referred to hereinafter [as]'the Act). For the assessment year 2Ol7-1.8, [respondent]No.1 passed assessment order dated [17 ].12.2019 underSection 144 of the Act. Aggrieved by the aforesaid order [of]assessment, petitioner has preferred appeal [before]respondent No.3. The appeal is stated to be [pending.]During the pendency of the appeal, petitioner filed a [petition]for stay of the demand on O4.O2.2O22. By the [impugned] intimation, respondent No.1 granted stay of the demandsubject to deposit of 2O%o thereof. This order is impugned inthe present proceedings. 3.1. Impugned intimation reads as under: " As directed by the Pr.Commissioner of IncomeTax-2, Hyderabad it is hereby informed that as perthe Board circular, 2OYo of the outstandingdemand for the assessment year 20i7-2018 is tobe paid on or before 2a.O3.2O22 to stay theCollection of Demand." 4. From a perusal of the above, we {ind thatrespondent No.t had acted on a direction of respondentNo.2, who had informed that as per circular of the CentralBoard of Direct Taxes (CBDT) stay can be granted subject topayment of 2OYo of the demand. 5. Respondent No.l, while dealing with a petitionfor stay of demand under Section 22O (61 of the Act, acts asa quasi-judicial authority. Being a quasi-judicial authority,he is expected to apply his own mind and pass a reasonedorder either rejecting the prayer for stay or granting staywith or without conditions. 6. A perusal of the impugned intimation would goto show that the same is devoid of reasons. All that has \ been mentioned [by respondent ][No.1 ][is ][that ][respondent ][No'2]had informed him [about the circular ][of ][the ][CBDT, which]provides for [granting stay of demand subject ][to ][payment ][of]2Oo/o of the outstanding [demand' ][Accordingly, ][the ][order]was passed. 7 . Supreme Court [in ][Principal ][Commissioner ][of] Income Tax v. [L.G.Elecronics ][India ][Pvt ][Ltd, ][decided ][on]2O.O7.2O1a has held [that ][administrative ][circular ][of ][the]CBDT would [not ][operate as ][a ][fetter on ][the authority ][acting]in a quasi-judicial [manner ][discharging ][quasi-judicial]function. In that [case, ][Supreme ][Court ][clari{ied ][that ][it]would be open to [the authorities ][on ][the ][facts ][of ][individual]cases to [grant ][deposit ][orders of a ][lesser ][amount than ][2Oo/o ]'pending disPosal of the [aPPeal'] 8. That being the [position, ][and on ][due]consideration, impugned [intimation ][(at ][page ][62 ][of ][the paper]book) is hereby set [aside ][and ][quashed' ][Consequently]matter is remanded [back ][to ][respondent ][No'1 ][for ][taking ][a]fresh decision on [the ][stay petition ][of the ][petitioner ][dated]in [accordance ][with ][law, and after ][hearing ][the]O4.O2.2O22, petitioner. 8.1. The above exercise shall be carried out within [a]period of thirty (30) days from the date of receipt of a copy ofthis order. 9. However, during this period of thirty (30) days,respondents shall not take coercive steps against thepetitioner. 10. At this stage, learned counsel for the [petitioner]submits that the petitioner's bank accounts have beenattached pursuant to the assessment order. 8. That being the [position, ][and on ][due]consideration, impugned [intimation ][(at ][page ][62 ][of ][the paper]book) is hereby set [aside ][and ][quashed' ][Consequently]matter is remanded [back ][to ][respondent ][No'1 ][for ][taking ][a]fresh decision on [the ][stay petition ][of the ][petitioner ][dated]in [accordance ][with ][law, and after ][hearing ][the]O4.O2.2O22, petitioner. 8.1. The above exercise shall be carried out within [a]period of thirty (30) days from the date of receipt of a copy ofthis order. 9. However, during this period of thirty (30) days,respondents shall not take coercive steps against thepetitioner. 10. At this stage, learned counsel for the [petitioner]submits that the petitioner's bank accounts have beenattached pursuant to the assessment order. 11. We make it clear that attachment of [petitioner's]bank accounts would be subject to such order that may [be]passed by respondent No.1 in terms of the present order. 12. This disposes of the Writ Petition. [However,]there shall be no order as to costs. 13. As a sequel, miscellaleous applications [pending,] if any, in this Writ Petition, shall stand [closed.] To, SD/-B.SAT,YAVATHIASSISTANT REGISTRAR//TRUE COPY//L-l "-'SECTION OFFICER 1The lncome Tax Officer, Ward [- ][1, Nizamabad, lncome ][Tax Office, ][6-2-15613']Subhash Nagar, Nizamabad [- 503 002, ][Telangana]Subhash Nagar, Nizamabad [- 503 002, ][Telangana] The Principai Commissioner [of ][lncomeTax-2, ][Hyderabad, ][Signature]Towers, Sy. No.. 6(P) of [Kondapur, ][Sy. ][No.. 37(P) ][of ][Kothaguda, Opposite]Botanical 6ardens, Serilingampally [Mandal, Ranga ][Reddy District, Hyderabad]- 500 084, TelanganaTowers, Sy. No.. 6(P) of [Kondapur, ][Sy. ][No.. 37(P) ][of ][Kothaguda, Opposite]Botanical 6ardens, Serilingampally [Mandal, Ranga ][Reddy District, Hyderabad]- 500 084, Telangana 2 / / PM SW 3. The National Faceless Appeal Centre (NFAC), Delhi, tncome Tax Department, Ministry of Finance, Government of lndia 4. The State Bank of lndia, Main Branch, Armoor, Nizamabad District - SO3 224 5. One CC to Sri. A V A Siva Kartikeya Advocate tOpUCl 6. One CC to Sri. A Radha Krishna, SC For lT tOpUCltOpUCl 7. One CC to Sri. A MURALI, Standing counsel, 8. Two CD Copies. 9. One spare copy \\ HIGH COURT DATED:1910412022 ORDERWP.No.15850 ot 2022 Disposing of the WpWithout costs. I(,v1It \\ \;r; [r ][.-r]14,I-)2 3 [AU$ ]2[22..oOF.9opTC i.[,..1]'->.