Ahmed Memorial Education Society V. The Commissioner of Income Tax, (Exemption), Hyderabad and The National Faceless Appeal Centre, Delhi and ICICI Bank Limited and State Bank of India and Syndicate Bank

WP/686/2024

AI Insights

The case involves the Ahmed Memorial Education Society, which challenged an order from the Commissioner of Income Tax, (Exemption), Hyderabad, that mandated the payment of 20% of a disputed tax demand based on an administrative circular. The petitioner argued that this circular should not override the discretion of the tax authorities, especially in light of a Supreme Court decision that allowed for such discretion based on individual case facts. The High Court found the reliance on the circular to be mechanical and not justified, leading to the setting aside of the impugned order and remitting the case for a fresh decision. The court also provided interim relief to ensure the petitioner's ability to operate their bank account for specific educational purposes.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796241 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-01-2024
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax vs. LG Electronics India Private Limited
• Laws Referred To: Article 226 of the Constitution of India, Article 14 of the Constitution of India, Section 151 CPC
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: RADHA KRISHNA; GADI KUMAR
• Assessee Lawyers: NAGA DEEPAK
• Keywords: Arbitrary; Bank Account Attachment; Illegal; Income Tax; Interim measure; Violation of Article 14; Writ of Mandamus; Mechanical reliance on circular; Discretion of authority
• Section: 14; 151; 226

Judgement Text

"[ 337e ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) WEDNESDAY, THE TENTH DAY OF JANUARY TWO THOUSAND AND TWENTY FOUR PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION NO:6 860F 2024 Between: AND Ahmed lvlemorial Education Society' Having rts. office at 17-3-115' SRT ilil;; 'd\"h;;;r;TakutpurJ,- uvfbrabad -- Telansana' lndia - 500023 ilElir\"t'\".i\"ii uv iG'vi\"\" prEliJint,'sarmanAhrned sl-o. Knaia Hasan, Ased ;b\"5;il1'V;\";{, 6cc Direc-t6i nib H.tl\" iz-s-trs, sRr cobnv' charminar' Yakutpura, Hyderabad ...pETlTtoNER . The Commissioner of lncome Tax, (Exemption), Hy-qerabad' . The National racetess nfrlijr. - Gni'd' . ihrough Principal . Chief c6\".miis[nei of tncome Ta*i[G]Acl Delhi situated at North Block, New Delhi 't 10001 . i#'i.;;; iax officer' Exemption Ward 1 (1) Hyderabad . iii; A;;itb;;fl .toint cor.-iiJ'oner oi tncomi: tax' ExemtionsHvderabad . i['N;i;;l iiJ.re.l-npp\"ii-Centte' Room No 401' 2nd Floor E-Ramp Jawaharlal Nehru Stadium Delhi . ifii;'Cji l;,iia, rr/linGtry oi Fi*n\"\" lncome Tax Department North Block New Delhi . iiJ'icfcf Bank Limited' Rep by its Manager, olo 22-8-2901291 Nayapul X Road Charminar HYderabad bui; E;k\"'oi l;6;, R.p' bv its Manaser o/o AlA Buildins' Pathergatti Hvderabad S\"ffii#il Bank, Rep bv its Manager opp SNvrampally Police Station R'ajendra Nagar Hyderabad ...RES'.NDENTS Petition under Article 226 oI lt}e Constitution of lndia praying that in the 1 2 3 4 5 6 7 8. 9. circumstancesStatedintheaffrdavitfiledtherewith,theHighCourtmaybe pleased to issue a wrlt, olrection or order more particularly in the nature of a writ of mandamus declaring the impugned Order No ITBA/COM/F|1712022- 23t1057518025 (1) dated 30-10'2023 passed by.the Respondent No' 1 and the consequent action of the Respondents in attaching the bank accounts of the PetitioneraSbeingarbitrary,illegal'violativeofArticlel4oftheConstitutionof lndia and without any application of mind and consequently set aside the same Petition under section 151 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to stay the co'ection of tax pursuant to the assessment order dated 23-03-2022 bearing DrN No rrBtuAST/S/147t2021- 2211041309769(1) pending disposar of the above writ petition lA NO: 1 oF 2024 lA NO:2 OF 2024 Petition under Section 151 cPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the notice dated 22-12-2023 having DrN No.rrBA/co,rFr17t2o23- 24t1058987199(1), notice dated 21_12_2023 having DtN No. lrBNco*lFllTl2o23- 2411058977391(1) and notice dated 21-.12-2023 having DIN No rrBAtco,rFrlTr2o23- 24t1058g777g2(.r) issued by the Respondent No.3 to the Respondent Nos T to g banks and any other attachment notice pending disposal of the above writ petition Counsel for the petitioner: SRI NAGA DEEPAK, REp. FOR slt K.RAVINDER REDDY (SC FOR GHMC) counsel for the Respondent No.1 t. s, snr ilbri KRTSHNA & c o u n se r ro r th e les pon de.n t N_o_ :,1 li Etlli^[X,iIH,_T\"l ?:f r r D E pr SRI GADI PRAVEEN I(U.MAR,DEFU-i'ii;ii;,rON GENERTAL OF TNDIA C.ounsel for the Respondent No.7 to 9: -_ - r ne uourt made the following: ORDER l I 7 THE HONOURABLE SRI JTISTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION No.686 oF 2024 ORf,)ER:p.. aon'ble Sa Justrr,.e P. sAM KosHY) Heard Mr. Naga Deepak, representing Mr. Katika Ravinder Reddy, learned counsel appearing for the petitioner, Mr. Radha Krishna and Mr. A. Rama Krishna, learned Senior Counsel for respondent Nos. 1 to 5 and Mr. B. Mukharjee, learned counsel appearing on behalf of Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India, for respondent No.6. 2. The present is a writ petition which has been filed questioning the order dated 30.1O.2O23 passed by the respondent No. 1, whereby the application filed by the petitioner seeking for a stay of collection of demands raised pursuant to the assessment order which has been decided in terms of the Circular d,ated 31.07.2O17 and the petitioner has been directed to pay 2Oo/o of the disputed demand. 3. The present writ petition has been filed primarily relying upon the decision of the Hon'ble Supreme Court in the case of Prlnciple Commissioner of Income Tox a. LG Electronics 1-1 I I I I I 2 Indla Priuate Limitedr.In the said case, the learned Additional Solicitor General of India on behalf of the Income Tax Department itself has made a statement before the Honble Supreme Court that the adminIStrative circular will not operate asa fetter on the Commissloner smce it lsao uasi-iudicial authoriw. Itwasclarffied bv the Hon 'ble Suoreme Court that in all cases like the resent it will be o the facts of individual c en to the authorities on ASES to tde sit orderg of a lesser aunount than 2Oo/o. oendins the aopeaI. 4. In the teeth of the said order, the impugned order dated 30.1O.2023 under challenge in this writ petition does not seem to be appropriate, legal or justified. The authority concerned had the discretion to pass appropriate order in the given factual circumstances of the appeal which was pending before the authorities concerned. The authority concerned could not have in a mechaaical manner relied upon the circular dated 31.O7.2OL7 while passing the said order. We are of the considered opinion therefore, the said impugned order is not sustainable. and the same deserves to be and accordingly set aside/quashed and the matter stands remitted back to the l\"t respondent for a fresh consideration of the interim a I '(zorg) tg scc +au pplication ( 3 I /, that has been hled by the petitioner. It is expected by the authority concerned that an appropriate decision to be taken at the earliest. Before taking a decision, the authority concerned may a-lso grant an opportunity of personal hearing to the petrtroner. 5. Learned counsel for the petitioner at this juncture submits that the petitioner's establishment is now in a fixed for the reason that they have collected the examination fees from all the students and the examination fees r,vithout late fees have to be deposited on or before 17.O1.2024. 6. Considering the fact that the educational career of t1 e students are at stake, and if the bank account of the petitioner stards frozen, the students at large may not be able to participate in the examination, hence, we are of the considered opinion that as an interim measure, the respondents should be directed to ensure that the petitioner would be permitted to operate the bank account to the extent of payrnent of the examination fCes required in respect of the students from whom the examination fees have already been collected by the petitioner. It is ordered accordingly. So far as the interim application is concerned, the authority is expected to take a t 4 decision on its own merits at the earliest before 3 I . O 1 .2024 itself 7. Considering the fact that considerable time has already lapsed, the let the petitioner appear before the concerned authority for personal hearing on the 1 I.O1.2O23. There shall be no further requirement of any issuance of notice for personal hearing of the petitioner. The assessing authority shall after due hearing being provided to the petitioner pass appropriate orders. 8. Accordingly, this Writ petition stands disposed of 9. As a sequel, miscellaneous applications pending if any in this Writ Petition, shall stand closed. No order as to costs. SD/-T. JAYASREE //TRUE COPY// ASSISTANT g:GISTRAR ro, sEcTtditroFFtcER 1. The Commissioner of lncome Tax, (Exemption), Hyderabad. 2 The Pn'ncrpar chigf commissioner df lncome Trx (ivaFAC), Nationar Faceress ^ Appeals Centre, Delhi, Situated at North Block, Ndw Delhi:i 10001. 3. The lncome Tax Officer, Exemption Ward i(i), Hyderabad. 4. The Additional/Joint commissi6ner of lnconie'Tai Exemoiions. Hvderabad. 5. The National Facetess.Appeirl pgnqrg. lgom No. 401, ZnO fro6r, E-_Rimp, Jawaharlal Nehru Stadiuni, Delhi - 1.10 OO3 6. The Ministry.of Finance, lncome Tax Department North Block, New Delhi, Union of lndia. 7. The Manager, ICICI Bank Limited, Olo. 2Z-B-290t291, Nayapul X Road, Charminar, Hyderabad. 8 The Manager, state Bank of lndia, o/o. AIA Buirdinq, patheroatti. Hvderabad 9. l.he Manager, Syndicate Bank, Opp Shivrampally pblice Sta[ion Raiendra Nagar, Hyderabad 10:One CC to SRl. K RAVTNDER REDDY (SC FOR GHMC) tOpUCl 11. One CC to SRr RADHA KR|STNn , Sr SC For tT oEpT tbFUCt-' 12.one CC to SRt A RA|V4 [BtgHNA, Sr SC For tr oepr iopuci 13, ONE CC tO SRI GADI PRAVEEN KUMAR, DEPUTY SOLICITbR OCICNINI Or . lNDlA, Hig-h Court for the State of Telangina at HydeiabiJ tOCUCf - ' - - 14.Two CD Copies MBC BS HIGH COURT DATED: 1010112024 ORDER WP.No.686 ot 2024 DTSPOSING OF THE WRIT PETITION, WITHOUT COSTS 1gE SYaT4' P q J o o 1 0 JAri 2024 OEspaTeHrg * * o *1 "