Wp/5055/2023 Of M/S Boilam Sampath Kumar Jewellers Private Limited v. The Assistant Commissioner Of Income Tax

HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD(Special Original Jurisdiction) FRIDAY, THE EIGHTEENTH DAY OF AUGUSTTWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYAND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 5055 OF 2023 Between: srarron [rt1_1,eotj-am fioad, ,sampath .warangar^-. [Kumar Jeweilers ]5gg q0?, Telangana. Represented [private ][Limited, ][B-7-159, ]by its [Sunir ]Director, [rheatre,]Mr.Bottam Sampath Kumar, S/o Mr. Bollam Vishwanadham. .....PETITIONER AND 'l . The Assistant Commissioner_of lncome Tax, Circle 3(1), Hyderabad,Signature Towers, Sy. No.. 6(p) of Kondapur, Sy. No.. SZf Fj oiXotf,'ror.f,Opposite Botanical G,!dens, Serilingampally Mandal, Rangi ReOOy D"istriit,Hyderabad - 500 084, Telangana. [-]Signature Towers, Sy. No.. 6(p) of Kondapur, Sy. No.. SZf Fj oiXotf,'ror.f,Opposite Botanical G,!dens, Serilingampally Mandal, Rangi ReOOy D"istriit,Hyderabad - 500 084, Telangana. [-] 2. The Assistant Commissioner of lncome Tax, Circle 7(1), Hyderabad,Signature Towers, Sy. No.. 6(p) of Kondapur, Sy. No.. Sltbt o,f Xotfr'aora,oppostte Botanical Galdens, Serilingampally MSndal, nangi ReOOy district,Hyderabad - 500 084, Telangana. [-]Signature Towers, Sy. No.. 6(p) of Kondapur, Sy. No.. Sltbt o,f Xotfr'aora,oppostte Botanical Galdens, Serilingampally MSndal, nangi ReOOy district,Hyderabad - 500 084, Telangana. [-] .....RESPONDENTS Petition Under Article 226 of rhe 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 particurarry in the nature ofMandamus declaring the order of the 1st Respondent, dated 31 .o1 .2023, videDlN. lrBA/coMlFl17l2o22-2311o49264s87(1), directing the petitioner to pay 20percentage of the disputed demand, pending disposal of the appeal of thePetitioner before the 1st Appellate Authority, for the Assessment year 2017 - 1g,as arbitrary, illegal, bad in law, bereft of any reasons, violative of principles ofnatural justice and to consequen y set-aside the same and grant stay of recovery, pending disposal of the Petitioners appeal before the 1st AppellateAuthority, in the interests of [justice.] !.A.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 ]togrant stay of all further proceedings, including any recovery, pursuant to theorder of the 1st Respondent, dated 31 .O1 .2023, vide DlN. ITBA/COM/F/1 712022-2311049264587('1 ), directing the Petitioner lo [pay ]2Oo/o of the disputed demand,pending disposal of the appeal of the Petitioner before the 1st AppellateAuthority, for the Assessment Year 2017 - 18, pending disposal of the above writpetition. Counsel for the Petitioner : Sri A.V.A.Siva Kartikeya Counsel forthe Respondents : Sri J.V.Prasad (Sr. SC For lncome Tax) The Court made the following Order :- THE HON'BLE SRI JUSTICE P.SAM KOSHYAND THE HON'BLE SRI JUSTICE LAXMI NARAYANA AIISHETTY W.P. No. 5O55 of 2O23 ORDER: /per ,ao n'ble Sn ,Justice P.SAM KOSHY) Heard Mr.A.V.A. Siva Kartikeya, learned counsel.for the petitionerand Mr-J.V.Prasad, ' learned Senior Standing Counsel for Income TaxDepartment appearing for respondents- 2. The instant writ petition has been hled assailing the orderdated 3 1.0 1.2o23 vide DIN: ITBA/COM / F / 17 / 2022-23 / 1049264587 l1lpassed by respondent No. I directing the petitioner to pay 2Oo/o of thedisputed demand. Counsel for the Petitioner : Sri A.V.A.Siva Kartikeya Counsel forthe Respondents : Sri J.V.Prasad (Sr. SC For lncome Tax) The Court made the following Order :- THE HON'BLE SRI JUSTICE P.SAM KOSHYAND THE HON'BLE SRI JUSTICE LAXMI NARAYANA AIISHETTY W.P. No. 5O55 of 2O23 ORDER: /per ,ao n'ble Sn ,Justice P.SAM KOSHY) Heard Mr.A.V.A. Siva Kartikeya, learned counsel.for the petitionerand Mr-J.V.Prasad, ' learned Senior Standing Counsel for Income TaxDepartment appearing for respondents- 2. The instant writ petition has been hled assailing the orderdated 3 1.0 1.2o23 vide DIN: ITBA/COM / F / 17 / 2022-23 / 1049264587 l1lpassed by respondent No. I directing the petitioner to pay 2Oo/o of thedisputed demand. 3. lrarned counsel for the petitioner while referring to the provisionsof Section 220(61 of the Income Tax Act, 1961 (for short, the Act')highlighted the fact that the Appellate Authority ought to have applied itsmind and given reasons while passing the order for payment of 2Ooh ofthe demand raised so as to stay further execution of the order which isunder challenge. Learned counsel submitss that the authority concernedhas committed a flaw, frrstly, so far as relying upon a circular issued byCentral Board of Direct Ta:res (CBDT) and secondly, the order beingpassed in a mechanical manner without application of mind and thirdly,the discr'etion ought to had been exercised more [judiciously ]rather thanpassing an order in a routine manner ald for the aforesaid reasons, theorder is liable to be set aside ald the matter required to be remalded back to the Appellate Authority [for ][reconsideration ][of ][the application for]interim order 4. Per contr:r, learned counsel for the department [submits ][that ][it ][is ][a]case where the powers under Section [220(61 ][of the Act ][have ][to ][be]exercised under the discretionary [jurisdiction ][of ][the Appellat,: ][Authority]and this Court cannot interfere [with ][the ][order ][passed ][bl' ][Appellate]Authority under discretionary [jurisdiction ][and ][hence, ][the ][present ][writ]petition for the said reason deserwes [to be ][rejccted.] 5. Having heard the contentions [put ][forth by ][either ][side ][and ][on]perusal of record, we are of the opinion [that ][it ][would ][be ][relevalt at ][this]juncture, to quote the provision of 1aw which [has ]to [be ][exercised by]considering the interim application [under ][section ][220(61 ][of ][the: ][Act'] Section 220(61 of the Act [reads ][as ][under] 'Where an assessee [has ][presented ][an ][appeal ][under ][Section 246]lor [section 246A] ][tine ][Assessing] [Officer ][may, ][in ][his ][discretion]and subject to such conditions [as ][he may ][think ][fit ][to ][imposc ][in]the circumstances of the case, treat [the ][assessee ][as ][not ][being ][in]default in respect of the amount [in ][dispute ][in ][the ][appeal, ][even]though the time for [payment ][has ][expired, ][as ][long ][as ][such app':al]remains undisposed of. 6. A plain reading of the aforesaid [section ][would ][clearly reflect ][that]provision of law itself specifically [enumerates ][that ][the ][Appellate]Authority has to [pass ]al [order ][strictly ][in ][its ][discretion. ][When ][the statute]prescribes the term 'the discretion [of ][the ][authority', ][it ][means ][the]subjective satisfaction of thc Appellate [Authority which ][needs ][to ][be]arrived at. Under those circumstances, [it ][is now necessall/ ][to ][take note ][of] .1^. tI the frndings given by the Appellate [Authority ][while ][passing ][the ][impugned]order dated 31.O 1.2023, whrch reads as under: '3. I have carefully examined letter submitted on [O8.O9.2O22]and communicated on 30.11.2022 that stay on [payment ]of taxescan't be considered in terms of OM 1914 of [1994 ][of ] Further it was communicated that instead of stay, option [of]installment was provided to which proposal was sought [from]Bollam Sampath Kumar Jewelers Private Limited on or [before]15.12.2022. Till Date no such [proposal has ][been received ][in this]office. .1^. tI the frndings given by the Appellate [Authority ][while ][passing ][the ][impugned]order dated 31.O 1.2023, whrch reads as under: '3. I have carefully examined letter submitted on [O8.O9.2O22]and communicated on 30.11.2022 that stay on [payment ]of taxescan't be considered in terms of OM 1914 of [1994 ][of ] Further it was communicated that instead of stay, option [of]installment was provided to which proposal was sought [from]Bollam Sampath Kumar Jewelers Private Limited on or [before]15.12.2022. Till Date no such [proposal has ][been received ][in this]office. 4. Record indicates that during th,e F.y 2O2l-2O22, [Sampath]Kumar Jewelers Private Limited reported Rs. [117 ]crores as [the]revenue from the operations, however no ta-xes [were ][paid against]the outstanding demand. Under these circumstances, I [hereby]reject the stay petition filed by Sampath Kumar Jewel€rs [Private]Limited. 5. tn this regard, I would like to thrust upon once again that [as]per OM 1914 of 1994 of CBDT, 20 percent of the demand has tobe paid till the disposal of the first appeal". 7. A plain reading of the aforesaid observations made by theAppellate Authority while deciding the matter would clearly reflect that itis not a case where we find that the order has been passed in amechanical manner arrd it is also not the case where the authority hasnot given any reasons alrd [justifications ]for passing the said order. 8. We find that the authority concerned has taken note of the factualdevelopments that have been transpired during the course of theproceedings and also has taken note of the hnancial status of thepetitioner's establishment arrd it is only thereafter decided that let theappellant pay atleast 2O percent of the demand. 9. In the given facts and circumstances of the case, where there arecertain justifiable reasons given by the authority concerned while passingthe impugned order, we are of the hrm view that the Writ Court at this juncture would not be in a position to frnd fault with the order passed Lryt.}'e Appellate Authority, especially, when it is [passed ]ex,:rcising [its]discretionary [jurisdiction ]and moreover, when the order [is ][passed giving]explanation ald reasons for reaching to the said conclusion. 10. Thus, the Writ Petition is devoid of merits and is [accordingly]dismissed. No order as to costs. Consequently, miscellaneous petitions [pending, ]if any, shall stardclosed. SD/. K. VENKAIAHASSISTANT REGISTRASECTION OFFICER //TRUE COPY// To 1. One CC to Sri A.V.A.Siva Kartikeya, Advocate tOpUCltOpUCl tOpUCl2. One CC to Sri J.V.Prasad (Sr. SC For tncome iax) tOirUCl3. Two CD Copies3. Two CD Copies SAGJP HIGH COURT DATED:1810812023 ORDER WP.No.5055 of 2023 DISMISSING THE W.P WITHOUT COSTS. 5r),l['\,>]qjA 51 [O][F]o?)o\[1]\\,1Tl,,Jr r ai,E':\[r.]