Wp/1814/2023 Of Mr. Sudarshan Reddy Kottur v. The Income Tax Officer

[ [3311 ]] IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdic'tion) MONDAY, THE THIRTIETH DAY OF JANUARYTWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYANANDTHE HONOURABLE SRI JUSTICE N.TUKARAMJIANDTHE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 1814 OF 2023 Between: Mr. Sudarshan Reddy Kottur, S/o Mr. K.Hanmath Reddy, aged 44 years. Occ:Business, D. No. 4-41320, Gujrathi Galli, Bank Street Koti, Hyderabad - 500001 , Telangana. ...PETITIONER AND 1. The lncome Tax Officer, Ward 5(1), Hyderabad, lT Towers, AC Guards,Masab Tank, Hyderabad - 500 084, Telangana.Masab Tank, Hyderabad - 500 084, Telangana. 2. The Additional / Joint / Deputy / Assistant Commissioner of lncome Tax /lncome Tax Officer, National e-Assessment Center, New Delhi, Room No.401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003.lncome Tax Officer, National e-Assessment Center, New Delhi, Room No.401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. .,.RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue a Writ, Order or Direction, one, more particularly in the nature ofMandamus declaring the order of the 1st Respondent, dated ['16.01.2023, ]videDlN. ITBA/COMIFl17l2O22- 2311O487356a5(1), directing the Petitioner to pay 20percent of the disputed demand, pending disposal of the appeal of the Petitionerbefore the 1st Appellate Authority, for the Assessment Year 2017 - 18, asarbitrary, illegal, bad in law, bereft of any reasons, violative of principles ofnatural [justice ]and to consequently set-aside the same and [grant ]stay ofrecovery, pending disposal of the Petitioners appeal before the 1st AppellateAuthority, in the interests of [justice.] lA NO: 1 OF 2023 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 ]to i I I 'grant stay of all furth )r proceedings, including any recovery, cending disposal ofthe above Writ Petitic n. Counsel for the Petit oner: SRI A.V.A. SIVA KARTIKEYA Counsel for the Res; ondents: Ms. SAPNA REDDY REPREST:NTING FORSRI J.V. PRASAD (Sr. SC FOF INCoME TAX) The Court made the ['ollowing: ]ORDER THE HON'BLE THE CHIET [BI{UYAN]AND THE HON,BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.1814 of 2023 ORDER: [(Per ][tlrc ][Hon'ble ][the ][Chief ][Justice ][Uijd ][Bhugan)]Heard Mr. A.V.A.Siva [Kartikeya, learned counsel ][for ][the]petitioner and Ms. Sapna [Reddy, ][learned counsel ][representing]Mr. J.V.Prasad, [learned Senior Standing ][Counsel, Income ][Tax]Department for the [respondents.] 2. Petitioner is an assessee under the Income Tax Act,1961 . (briefly referred to [hereinafter ][as ][:the ][Act') having ][the]status of an individual. [For ][the ][assessment ][year ][2al7-18,]petitioner had submitted return of income on 3O.10.2017declaring total [income of ][Rs.15,O2,400.OO. ][On ][the ground ][that]Assessing Officer [had ][reason ][to ][believe ][that ][income ][chargeable]to tax had escaped [assessment, ][assessment ][proceedings ][of ][the]petitioner for the aforesaid assessment year was reopenedwhereafter 2'd respondent [passed ][assessment ]order [dated]3O.O3.2O22 under [Seclion ][147 ][read ]with [Section ][1448 ][of ][the] 2H(:J & NTRJW.P.,"lc 18 ; 4 of 2O23W.P.,"lc 18 ; 4 of 2O23 2. Petitioner is an assessee under the Income Tax Act,1961 . (briefly referred to [hereinafter ][as ][:the ][Act') having ][the]status of an individual. [For ][the ][assessment ][year ][2al7-18,]petitioner had submitted return of income on 3O.10.2017declaring total [income of ][Rs.15,O2,400.OO. ][On ][the ground ][that]Assessing Officer [had ][reason ][to ][believe ][that ][income ][chargeable]to tax had escaped [assessment, ][assessment ][proceedings ][of ][the]petitioner for the aforesaid assessment year was reopenedwhereafter 2'd respondent [passed ][assessment ]order [dated]3O.O3.2O22 under [Seclion ][147 ][read ]with [Section ][1448 ][of ][the] 2H(:J & NTRJW.P.,"lc 18 ; 4 of 2O23W.P.,"lc 18 ; 4 of 2O23 Act. By the r tforesaid order of assessment, tota,l inc:ome of thepetitioner hal been assessed at Rs.24,89,2r,U r 1.Crt) whereafternotice of derr and under Section 156 of the Act u.as issued tothe petitione: by the 2"d respondent on 3O.03.202'2 itself.Petitioner file, I an application under Section 22o(,tl of the Actbefore the 1", respondent for stay of demand. I31, the orderdated 16.01.2123, lst respondent directed the peti -ioner: to pay2Oo/<' of the dt mand on or before 25.OL.2O23, but at_ the sametime rejected the application for stay of demand. Aggrieved,present writ p :tition has been liled. 3. Agl3ieved by the order of assessrnt'nt dated3O.O3.2O22, 1 etitioner has preferred appeal befc re the 1irstappellate auth ;rity under Section 2464 of the Act- 4. Fro m a perusal of the impugned order dated76.01.2023, i. is seen that lst respondent hrrd followedinstructions of the Central Board of Direct Taxes (briefly [.CBDT,]hereinafter) d eted 21.03.1996 to the effect 1}at whereoutstanding dr mand is disputed before the appellate authority,the assessee has to pa! 2Oo/o of the disputeJ demand. Accordingly, petitioner has been directed to pay 2Oo/o of theoutstanding demand. 5. We are afraid l"t respondent did not apply his mindwhile passing the order dated 16.01.2023. It appears to be amechanical exercise of power. When ttre Income Tax authorityexercises jurisdiction under Section 220(61 of the Act, heexercises quasi-judicial powers. While exercising quasi-judicialpowers, the authority is not bound or conhned by departmentalinstructions. 6. 6. This position has been well settied by the SupremeCourt in Principal Commissioner of Ineome Tax v. LGElectronics India M. Ltd.r 7. That being the position, we set aside the order datedL6.O1.2O23 and remand the matter back to the 1st respondentfor passing a fresh order in accordance with law after giving dueopportunity of hearing to the petitioner. This sha1l be donewithin a period of six (06) weeks from the date of receipt of a II 4 HCJ & NTRJW.P llo. 18 14 of 2023 copy of this trder. Till the aforesaid period of s x (O€i) weeks,respondents ere directed not to take coercive steps lor realizingthe outstand ng demand for the assessment vear 2OlT-lg.the outstand ng demand for the assessment vear 2OlT-lg. 8. W:it Petition is accordingly allowed. However, theresha-ll be no or der as to costs. 9- M scellaneous applications pending, if any, in thisWrit Petition r;hall stand closed. SD/-P.P!.DMAI{ABHA REDDYASSISTANI REGISTRAR//TRUE COPY//)1,$ECTION OFFICER To, II 4 HCJ & NTRJW.P llo. 18 14 of 2023 copy of this trder. Till the aforesaid period of s x (O€i) weeks,respondents ere directed not to take coercive steps lor realizingthe outstand ng demand for the assessment vear 2OlT-lg.the outstand ng demand for the assessment vear 2OlT-lg. 8. W:it Petition is accordingly allowed. However, theresha-ll be no or der as to costs. 9- M scellaneous applications pending, if any, in thisWrit Petition r;hall stand closed. SD/-P.P!.DMAI{ABHA REDDYASSISTANI REGISTRAR//TRUE COPY//)1,$ECTION OFFICER To, 1 . The lncom, r Tax Officer, Ward 5(1), Hyderabad, lT Tower':;, AO Guards,[\4asab Tar [(, ]Hyderabad - 500 084, Telangana.2. The Additir nal / Joint / Deputy / Assistant Commissionet I' lnc.ome Tax /lncome Ta. Officer, National e-Assessment Center, Nev/ t.)elhi, Room No..401,2nd F :or, E-Ramp, Jawaharlal Nehru Stadium, Ne,v Delhi - 1-10 003.3. One CC to SRI A.V.A. SIVA KARTIKEYA Advocate [OP.J[l4. One CC to SRI J.V. PRASAD (Sr. SC FOR INCOME TAli) Advocate 5. Two CD C< piesBN2. The Additir nal / Joint / Deputy / Assistant Commissionet I' lnc.ome Tax /lncome Ta. Officer, National e-Assessment Center, Nev/ t.)elhi, Room No..401,2nd F :or, E-Ramp, Jawaharlal Nehru Stadium, Ne,v Delhi - 1-10 003.3. One CC to SRI A.V.A. SIVA KARTIKEYA Advocate [OP.J[l4. One CC to SRI J.V. PRASAD (Sr. SC FOR INCOME TAli) Advocate 5. Two CD C< piesBN us BSK HIGH COURT DATED:30 0112023 ORDER{$E r€WP.No.181* ot 20236.,\ao()2 5 ffiB [?i:3].1,).\*i..-" t t,E|;i' ALLOWING THE WRIT PETTTIONWITHOUT [(:OSTS] t\[q9]w(