DHRUVA GOEL V. PR. CIT, CENTRAL & ANR.

W.P.(C)/2830/2019

AI Insights

The case involves two writ petitions filed by Dhruva Goel and Urmila Goyal against the Principal Commissioner of Income Tax, Central, concerning the denial of relief from demand suspension. The petitioners challenged the PCIT's decision which required a 20% deposit of the total demand for the stay of recovery, as per administrative circulars. The Supreme Court's precedent in Principal Commissioner of Income Tax v. L.G. Electronics was cited, which clarified that the 20% deposit is not a compulsory limit and authorities can decide on a lesser amount based on individual case facts. The High Court found the PCIT's order to be cryptic and lacking sufficient reasoning, leading to its decision to set aside the order and remand the matter for fresh consideration.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 746144 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 29-03-2019
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax v. L.G. Electronics (C.A.No.6850/2018)
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SANJAY KUMAR; ASHEESH JAIN
• Assessee Lawyers: ROHIT TIWARI; SHOBHIT TIWARI
• Keywords: Coercive Action; Stay of demand; Suspension of demand; Deposit orders
• Section: 220

Judgement Text

"$~4 & 5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2830/2019 & CM Nos.13179-81/2019 DHRUVA GOEL ..... Petitioner versus PR. CIT, CENTRAL & ANR. ..... Respondents + W.P.(C) 2831/2019 & CM Nos.13182-84/2019 URMILA GOYAL ..... Petitioner versus PR. COMMISSIONER OFINCOME TAX, CENTRAL & ANR. ..... Respondents Present : Mr. Rohit Tiwari and Mr. Shobhit Tiwari, Advs. for the petitioner. Mr. Sanjay Kumar and Mr. Asheesh Jain, Advs. for the respondents. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE PRATEEK JALAN O R D E R % 29.03.2019 Issue notice to the respondents. Mr. Sanjay Kumar, Advocate accepts notice on behalf of the respondents. W.P.(C)Nos.2830/2019 & 2831/2019 page 1 of 3 The petitioners’ grievance is with respect to the denial by the respondent (Principal Commissioner) to grant relief of suspension of demand. The relief granted was to the extent which the Principal Commissioner perceived was within her domain i.e. imposing the condition that upon deposit of 20% of the demand, the rest of the amount would not be recovered. In this regard, the Revenue’s view appears to have been guided by the prevailing circulars. In Principal Commissioner of Income Tax v. L.G. Electronics (C.A.No.6850/2018 decided on 20.07.2018), the Supreme Court observed as follows : “Having heard Shri Vikramjit Banerjii, learned ASG appearing on behalf of the appellant, and given credence to the fact that he has argued before us that the administrative Circular will not operate as a fetter on the Commissioner since it is a quasi judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal.” It is clear therefore, that there is nothing compulsive with respect to the 20% limit which the Revenue authorities find themselves constrained by in considering the application for grant of stay or such appropriate relief. Furthermore, such administrative orders or circulars cannot fetter judicial discretion which is the essence of power under Section 220 of the Income Tax Act. In the present case, the order of the PCIT is a bare bones order which can be characterized as less than cryptic and reads as follows : “2. An opportunity of being heard on the above matter has been provided by the undersigned on 13.02.2019. On W.P.(C)Nos.2830/2019 & 2831/2019 page 2 of 3 13.02.2019, Sh. Praveen Jain, CA attended and he was directed to pay the 20% of demand within one week, failing which coercive action will be outstanding demand. Hence, you are directed to pay 20% of total demand (balance 10%) in the case immediately, as mere filling of appeal against the assessment order cannot be considered as sufficient reason for stay of demand.” This court is of the opinion that the PCIT has not furnished any reasons indicating why the exercise of discretion cannot be in favour of assessee for imposition of condition of less than 20% of demand. Accordingly the impugned order is set aside. The Commissioner is hereby directed to pass fresh orders in accordance with law having regard to the facts and circumstances within two weeks from today. Till that date, the respondents are directed not to initiate or complete any coercive action. These writ petitions are allowed in the above terms. Dasti. S. RAVINDRA BHAT, J PRATEEK JALAN, J MARCH 29, 2019 aj W.P.(C)Nos.2830/2019 & 2831/2019 page 3 of 3 "