+W.p.(C) 535/2024, Cm Appl. 2362/2024Bunch Microtechnologies Private Limitedbunch Microtechnologies Private Limited v. Income Tax Officer Ward 5 (1) Delhi And Anr

$~75 *IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 535/2024, CM APPL. 2362/2024BUNCH MICROTECHNOLOGIES PRIVATE LIMITEDBUNCH MICROTECHNOLOGIES PRIVATE LIMITED ..... PetitionerThrough:Mr. Deepak Chopra, Mr. AnkulGoyal, Advs. versus INCOME TAX OFFICER WARD 5 (1) DELHI AND ANR. ..... RespondentThrough:Mr. Kunal Sharma, Sr. SC withMs. Zehra Khan, Jr. StandingCounsel,Mr.ShubendruBhattacharya, Advs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE PURUSHAINDRA KUMARKAURAV O R D E R %15.01.2024 1.This writ petition is directed against the order dated 13December 2023 in terms of which the application under Section220(6) of the Income Tax Act, 1961 [“Act”] has come to be rejectedwith the first respondent taking the view that since the writ petitionerhad failed to make a pre-deposit of 20% of the outstanding demand, astay of the demand would not be warranted. The petitioner has alsochallenged the order dated 8 January 2024 wherein the applicationfiled for review of the order dated 13 December 2023 was rejected bythe second respondent. 2.The aforesaid view is premised on a reading of OM No.404/72/93-ITCC dated 31 July 2017 issued by the Central Board of Direct Taxes [“CBDT”] with respect to Instruction No. 1914 dated 21March 1996 and which the respondents appear to read as mandating apre deposit of 20% of the outstanding demand before the powersconferred by Section 220(6) of the Act could be exercised. 3.The aforesaid view would clearly not sustain bearing in mindthe following position in law which was enunciated by the DivisionBench of the Court in LG Electronics India Pvt. Ltd vs. Pr.Commissioner of Income Tax & Ors. [ 2017 SCC OnLine Del 12760] “7. The impugned order clearly makes no reference to thecentral issue in the pending appeal or the grievance of thePetitioner regarding the order passed by the AO. The impugnedorder in short is without reasons and is therefore unsustainablein law. 8. For the above reasons, the impugned order is set aside and adirection is issued that the Petitioner's application will onceagain be heard by the PCIT on merits and without reference tothe OM dated 31[st]July, 2017, which, on the face of it, appears tocurtail his discretion. The PCIT will dispose of the applicationwith a reasoned order not later than two weeks from the date ofreceipt of this order.” We note that the said decision has since then been affirmed bythe Supreme Court in Principal Commissioner of Income Tax and Ors. vs. LG Electronics India Pvt. Ltd. [(2018) 18 SCC 447] wherein it was held: “2. Having heard Shri Vikramjit Banerjee, learned ASGappearing on behalf of the appellant, and giving credence to thefact that he has argued before us that the administrative circularwill not operate as a fetter on the Commissioner since it is aquasi-judicial authority, we only need to clarify that in all caseslike the present, it will be open to the authorities, on the facts ofindividual cases, to grant deposit orders of a lesser amount than20%, pending appeal.” 4.In view of the aforesaid, we find ourselves unable to sustain the impugned orders. 5.The writ petition is accordingly allowed. The impugned ordersdated 13 December 2023 and 8 January 2024 are hereby set aside. Thematter shall stand remitted to the first respondent who shall pass freshorders bearing in mind the observations appearing hereinabove as wellas the judgments rendered on the subject.6.Pending application also stands disposed of. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J.JANUARY 15, 2024neha