DIRECT NEWS PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7-1 AND ORS

W.P.(C)/1862/2024

AI Insights

The case involves Direct News Private Limited, the petitioner, who challenged the respondent's requirement to pre-deposit 20% of the outstanding demand as a condition for considering their application under Section 220(6) of the Income Tax Act, 1961. The respondent's stance was based on an interpretation of an Office Memorandum and Instruction from the Central Board of Direct Taxes, which was contested by the petitioner. The Supreme Court's precedent in a similar case was cited, which allowed for flexibility in the deposit amount required pending appeal. The High Court's decision favored the petitioner, leading to a remand of the case for re-evaluation under the clarified legal standards.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 748295 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 08-02-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax vs. LG Electronics India (P) Ltd. [(2018) 18 SCC 447]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KUNAL S
• Assessee Lawyers: PRADEEP RAWAT; VIKRAMADITYA BHASKAR
• Keywords: Outstanding Demand; Pre-deposit; Stay Application
• Section: 220(6)

Judgement Text

"$~42 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1862/2024 DIRECT NEWS PRIVATE LIMITED ..... Petitioner Through: Mr. Pradeep Singh Rawat and Mr. Vikramaditya Bhaskar, Advs. versus THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7-1 AND ORS ..... Respondents Through: Mr. Kunal S, Adv. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R % 08.02.2024 CM APPL. 7755/2024 (Ex.) 1. Allowed, subject to all just exceptions. 2. The application is disposed of. W.P.(C) 1862/2024 1. The solitary grievance which is raised in the present writ petition is with respect to the manner in which the application under Section 220(6) of the Income Tax Act, 1961 [“Act”] has come to be treated. As is ex facie evident, the respondent no.1 has proceeded on the assumption that the assessee is invariably and without exception liable to pre-deposit 20% of the outstanding demand. 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 21 March 1996 and which the respondents appear to read as mandating a This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/12/2024 at 14:39:14 pre-deposit of 20% of the outstanding demand before the powers conferred by Section 220(6) of the Act could be exercised. 3. The aforesaid view will clearly not sustain in light of the judgment rendered by the Supreme Court in Commissioner of Income Tax vs. LG Electronics India (P) Ltd. [(2018) 18 SCC 447]. While dealing with the aforesaid issue the Supreme Court has held as under:- “2. Having heard Shri Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving 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.” 4. In view of the above and the fact that the legal position is conceded, we allow the instant writ petition and set aside the impugned order dated 27 December 2023. The matter shall consequently stand remitted to the first respondent to consider the application for stay afresh bearing in mind the observations appearing hereinabove. All rights and contentions of respective parties are kept open. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J. FEBRUARY 8, 2024/neha This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/12/2024 at 14:39:14 "