Wp/3831/2021 Of M/S. Gorlas Infrastructure Pvt Ltd v. Pr. Commissioner Of Incometax-2 And Another

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Original J urisdiction) MONDAY, THE TWENTY SIXTH DAY OF APRILTWO THOUSAND AND TWENTY ONE PRESENT THE HON'BLE SRI JUSTICE M.S. RAMACHANDRA RAOANDTHE HON'BLE SRI JUSTICE T. VINOD KUMAR WRIT PETITION NO: 3831 OF 2021 Between: M/s. Gorlas lnfrastructure Pvt. Ltd., Rep. by Mohd. Afzal (Authorised Representative),Shop No.87, Ground Floor, Bearing Municipal no. 11-705, Pipe line Road, FathenagarVillage, GHMC, Kukatpally Circle, Ransa Reddy District, Hyderabad - UO?.?33i,r,O*=* AND 1 . Pr. Commissioner of lncometax-2, Signature Towers, Sy.No.6(P) of Kondapur,Sy.37(P) of Kothaguda Opp. Botanical Gardens, Serlingampally [(M), ]R.R.District,Hyderabad, Telangana, 500084.Sy.37(P) of Kothaguda Opp. Botanical Gardens, Serlingampally [(M), ]R.R.District,Hyderabad, Telangana, 500084.2. Commissioner of lncome-tax(Appeals)-2, Signature Towers, Sy.No.6(P) ofKondapur, Sy.37(P) of Kothaguda Opp. Botanical Gardens, Serlingampally [(lV),]R.R.District, Hyderabad, Telangana, 500084.Kondapur, Sy.37(P) of Kothaguda Opp. Botanical Gardens, Serlingampally [(lV),]R.R.District, Hyderabad, Telangana, 500084. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia [praying ]that in thecircumstances stated in the affidavit filed therewith, the High Court may be [pleased ]toissue a writ, order or direction, more particularly one in the nature of Writ ofI\,4andamus/Certiorari to set aside/quash the mechanical order bearing F.No.Pr.ClT-2/Hyd/Stayi2O2O-21 , d1.0310212021 [passed ]by the 1st respondent, by declaring it asBad in Law and consequently direct him to consider the application dt. 2810712020afresh, in line with the CBDT lnstruction No.95 dt.21l08/ [1 ]969. lA NO: 1 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in theaffidavit filed in support of the petition, the High Court may be [pleased ]to [grant ]stay ofall further proceedings, pursuant to the order passed by the 1st Respondent, videorder bearing F. No. Pr.ClT-2lHyd/Stay/2020 -21, dl. 031 0212021 for the A.Y.201 4-1 5,till the disposal of the first appeal, in the interests of Justice, as otherwise thePetitioner would be put to irreparable loss and injury.Counsel for the Petitioner: SRl. DUNDU MANMOHAN Counsel for the Respondent No.1: SRI B. NARASIMHA SARMA Counsel for the Respondent No.2: M/s. K. MAMATA The Court made the following: ORDER THE HON'BLE SRI JUSTICE M.S. RAMACHANDRA RAOANDTHE HON'BLE SRI JUSTICE T. VINOD KUMAR WRIT PETITION NO.3831 of 2O2L ORDER :[per Ho n'ble Si Justice T. Vinod Kumar) In this Writ Petition, the petitioner is assailing thecorrectness of the order passed by the 1"t respondent inF.No.Pr.ClT-2 /HydlK/2O2O-21 dated 03.O2.2O2t, in theapplication filed seeking stav of demand of tax. 2. The petitioner contends that for the Asst. year 2014-15, ithad filed return of income u/s. 139(1) of the Incomer Tax Act, 1961(for short the ActJ admitting income of Rs. 1,76,654/- and thesame was processed on 27.11.2014 under Section 143(i) of theAct; that the assessing authorit5r has issued notice under Section148 of the Act, proposing to revise the income admitted, by makingan addition of Rs.575 crores; no reasons were assigned forreopening; as a result of the addition, a high pitched assessmentwhich is 30409 times higher than the income declared has beenmade on the petitioner; and the petitioner has been issued r.l,ith ademand notice dt. 27.12.2019 in a sum of Rs. 418.12 crores. 3. It is also contended that aggrieved by the order passed bythe assessing authority, the petitioner has preferred an appeal tothe 2nd respondent being the 1st appellate authoritl/ on 13.01.2020under Section 246A of the Act; and the said appeal is pending. 4. The petitioner further contends that pending considerationof appeal, the petitioner approached the 1st respondent on1O.O2.2O2O requesting the stay of collection of demand of tax; andnot to treat the petitioner as assessee-in-default under Section 3. It is also contended that aggrieved by the order passed bythe assessing authority, the petitioner has preferred an appeal tothe 2nd respondent being the 1st appellate authoritl/ on 13.01.2020under Section 246A of the Act; and the said appeal is pending. 4. The petitioner further contends that pending considerationof appeal, the petitioner approached the 1st respondent on1O.O2.2O2O requesting the stay of collection of demand of tax; andnot to treat the petitioner as assessee-in-default under Section 220(3) and (6) of the Act, till such time rhe appeal is decided by rhe2,t,1 respondent. 5. It is the contention of the petitioner that the 1"t respondentdisposed of the said request in a mechanical manner; directingpayment ol 2ooh of outstanding balance demand in 10 equalinstallments starting 15.03.2020, without taking note of thefinancial difficulty of the petitioner; and the said direction of the 1strespondent was communicated to the petitioner by the assessingofficer on 09 .O3 .2O2O. 6. As the petitioner was afforded with short time of one week tomake the payment of 1"t instalment out of the ten equalinstallments granted, the same could not be complied with; and,thcreafter the petitioner's activities got affected due to Covid 19pandemic. 7. [t is contended that due to Covid 19 pandemic the petitionerbusincss got affected; the petitioner approached the lstrespondent once again, vide his request letter dated 28.07.2O2O,and sought lor reconsideration of the order passed earlier [granting]conditional stay; and that the 1"t respondent disposed of the saidstay application by the impugned proceeding dated O3.O2.2O2Iwithout taking note of the submissions made and also the financiaiposition of the petitioner subsequent to Covid 19 pandemic; thatthe l"t respondent has rejected the request of the petitioner by-stating that "rto blanket staA can be giuen. Ihe assessee to pay 20vo ofthe total demand in eight instalments at the [(11 ][Rs. ]10 croresper month startitg from February, 2021 and the 1"t instalment to be paid bg 10.02.2021 and the balance instalments should.be paid on or before 10th of euery succeeding month, failingbe paid on or before 10th of euery succeeding month, failingu.thich the stay uill automatically stand uacated and theAssessing Offtcer/ Tax Recouery Offi"cer shalt be at tibertg toenforce collection tuithout further notice"Assessing Offtcer/ Tax Recouery Offi"cer shalt be at tibertg toenforce collection tuithout further notice" iJ. It is the contention of the petitioner that, despite thepetitioner makingout a case forgrant of absolute stay inappropriate casesof the demandraised in view of CBDTinstructions No.95 dated 21.08. i969 and further instructionNo. 1914 dated 28.07.2020, the direction to pay 2Oo/o is arbitrary,erroneous and illegal; that the appeal filed before the 2"drespondent was taken up for hearing in July, 2O2O and no ordersthereon have been passed till date; and that non-exercise of powerconferred on the 1"t respondent for grant of absolute stay iscontrary to the law laid down by the Apex Court in prl.Commisstoner of Income Tax S and others u. M/s. L.G. Electronicshtdta Piuate Limitedt. 9. We have given our anxious consideration to the submissionsmade on behalf of the petitioner. 10. Firstly, the CBDT instructions No.95 dated 2 I .0g. 1969 onwhich reliance is placed to contend that absolute stay should begranted, is no more in force and stands superseded by instructionno. 1914 dated 28.OT.2O2O. Secondly, by the CBDT instructionNo.1914 dated. 28.07.2020, the authorities under the Act areconferred power to grant stay pending appeal before the appellate forum under the Act; and it is stated therein that the authority inorder to protect the interests of revenue can grant stay by directingpayment of 2Ook of the demand. 9. We have given our anxious consideration to the submissionsmade on behalf of the petitioner. 10. Firstly, the CBDT instructions No.95 dated 2 I .0g. 1969 onwhich reliance is placed to contend that absolute stay should begranted, is no more in force and stands superseded by instructionno. 1914 dated 28.OT.2O2O. Secondly, by the CBDT instructionNo.1914 dated. 28.07.2020, the authorities under the Act areconferred power to grant stay pending appeal before the appellate forum under the Act; and it is stated therein that the authority inorder to protect the interests of revenue can grant stay by directingpayment of 2Ook of the demand. 11. It cannot be stated that by the CBDT instruction No. 1914,in all cases a condition precedent to direct payment of 2oo/o of Lhedemand for grant of stay having been prescribed. Hou'ever, whileconsidering the application for grant of stay, the authority [is]required to consider three essential parameters namely;(i) existence of pima facie case, (ii) financial stringencg, and [(iii)]balonce of conuenience. .Based on consideration of the [above, ][in]the facts of each case, the authority can direct [payment ][of ][even]lesser amount. 12. Though, it is contended before us that even a [direction ][to]pay the 17o of the demand raised by the assessing officer [would]causc undue hardship and irreparable [loss ][to the ][peLitioner, ][ancl]that the authorities have not been able [to ][recover ][any ][part ][of ][the]demand raised on the petitioner, because of [it's ][financial]stringency, the said submission does [not ][appeal ][to ][this ][Court, ][as]mere failure of the authorities to recover [any ][amount cannot ][be]considered as financial stringency of the [petitioner.] 13. The 1"t respondent, having regard to the [facts ][of ][the ][case]and the material placed on record, [granted ][conditionai ][stay, ][which]the petitioner failed to comply [with at ][the ][first ][instance; ][and ][even]thereafter the l [strespondent,by ]considering the [request ][of ][the]petitioner, granted further time for making [the ][conditional]payment to commence from 1Os [February, ][202 ][1 ][. ][Thus, ][the] pctitioner failed to comply either order dt. O 1.03.2020 or order dt.03.o2.202103.o2.2021 74. Though, it is sought to be contended by the petitioner thatthe lst respondent ought to have granted absolute stay, the saidsubmission lacks bonafides. The same is evident from theapplication made by the petitioner on 2a.O7.2O2O forreconsideration of the earlier decision wherein, as an alternateprayer, it sought the following reiief : "therefore, the Hon'ble Principal Commissioner is pleaded tokindlg postpone the pogment of the l.t instalment out of teninstalments of 20% of total demand to 15.01.2021 instead of1s.03.2020.'instalments of 20% of total demand to 15.01.2021 instead of1s.03.2020.' The 1"t respondent, having considered the request of the petitioner,granted time to make conditional payment in installmentscommencing from 1O.O2.2O21, beyond the period indicated by thepetitioner. Even this the petitioner failed to comply with and onlyas an after thought filed the present Writ Petition on 15.02.2021,after having committed default in payment ol rhe revised 1stinstallment due on IO.O2.2O21.. 15. Since, the 1st respondent has passed the rmpugned orderdated 03.02.2021 by taking all the facts into consideration,including the request of the petitioner as noted above by way ofreconsideration of its earlier order of March, 2O2O, and the saidorder passed by the 1st respondent is in exercise of discretionarypo\ [/ers, ]this court is of the view that no valid ground has beenmade out for interference with it. 16. Therefore, the writ petition is de void of merits. Accordingly,the Writ Petition is dismissed at admission stage. 15. Since, the 1st respondent has passed the rmpugned orderdated 03.02.2021 by taking all the facts into consideration,including the request of the petitioner as noted above by way ofreconsideration of its earlier order of March, 2O2O, and the saidorder passed by the 1st respondent is in exercise of discretionarypo\ [/ers, ]this court is of the view that no valid ground has beenmade out for interference with it. 16. Therefore, the writ petition is de void of merits. Accordingly,the Writ Petition is dismissed at admission stage. L7. As, it is contended that the 2"d respondent [heard ][the ][appeal]filed by the petitioner in July, 2020, and no orders are [passed ][as]yet, we direct the 2nd respondent to dispose off the appealexpeditiously, if not already disposed, [preferably ][within ][a ][periocl ][of]four weeks from the date of receipt of copy [of ][this ][order.] 18. Miscellaneous [petitions ]if [any, ][stand ][closed ][in ][the ][light ][of] this order. No order as to costs. Sd/-T.KRISHNA ASSrsrANr [-iezo*]//TRUE COPY'SECTION OFFICER\ To, Towers. Sv.No.6(P) [of]ns. Serlinq'amPallY [(M)] 'ffi [3",T13;lSifJiI?.'""&tL#8X;:86'::qE:Y!""], BrE{'rilUilq!:fl,. nl.i#i:b%?"r3 One CC to [Sri ][B, Narasi]i 6ilE ;E i; [M-i.-K. ][Mimata, ][Advocate ][[oPUC]] 5. Two [CD CoPies] CHR HIGH COURT DATED:2610412021 STATE o"ta.(a-:o\02 [lu\{ ][?$?1]q).AORDERW.P.No.3831 of 2021 DISMISSING THE WRIT PETITIONWITHOUT COSTS b)D