Dundu Manmohan V. Income Tax Department

WP/12376/2022

AI Insights

The case involves a writ petition filed under Article 226 of the Constitution of India by a firm engaged in the business of purchase and sale of prawns. The petitioner challenged the rejection of their stay application by the Principal Commissioner of Income Tax, which was based on the non-appearance of the petitioner during the enquiry. The petitioner argued that the rejection was erroneous and contrary to the law, especially considering the health issues faced by the partners due to COVID-19. The court found that the Principal Commissioner should have considered the stay application on its merits despite the absence of the petitioner at the enquiry.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 820259 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 29-04-2022
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M KIRANMAYEE
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Faceless assessment; Income Tax; Stay Application; Writ of Mandamus; CBDT Instruction No.95
• Section: 246 A; 228(6)

Judgement Text

" HON'BLE SRI JUSTICE A.V.SESHA SAI AND HON’BLE SRI JUSTICE RAVI NATH TILHARI WRIT PETITION No.12376 OF 2022 ORDER:- (Per AVSS,J) Heard Sri Dundu Manmohan, learned counsel for the petitioner and Smt.M.Kiranmayee, learned Standing Counsel for the Income Tax Department, for respondents. 2. This Writ Petition is filed under Article 226 of the Constitution of India for the following relief: “to issue a writ, order or direction more particularly one in the nature of Writ of Mandamus, to direct the respondents to consider the application dated 27.02.2022 in line with the CBDT Instruction No.95, dated 21.08.1969, and pass such other orders.” 3. According to the petitioner, it is a firm engaged in the business of purchase and sale of prawns. After issuing notices to the petitioner, National Faceless Assessment Centre of the Department of Income Tax passed the assessment order on 16.06.2021, disallowing the petitioner’s claim of purchase from the 4 parties amounting to Rs.15,58,31,101/-. Against the said assessment order, petitioner herein filed appeal on 01.10.2021, before the Faceless Appellate Centre, under Section 246-A of the Income tax Act, 1961 (for short ‘the Act’). Thereafter, pending appeal, petitioner availed the remedy before the Assessment Officer, under Section 228(6) of the Act. Subsequently, petitioner filed a stay application on 15.10.2021, before the Principal Commissioner of Income Tax, Rajahmundry. The Principal Commissioner, initially issued a notice on 17.10.2020. According 2 to the petitioner, partners of the firm, who are wife and husband got affected by Covid-19 and as such they made a request vide e- mail dated 21.01.2021, seeking adjournment. It is further stated in the Writ Affidavit that already the 1st respondent issued another notice, but the same could not be responded because of the health conditions of the partners of the firm. 4. Eventually, the 1st respondent-Principal Commissioner, vide order dated 24.01.2022, rejected the stay application of the petitioner and subsequently on 27.02.2022, petitioner herein submitted another application before the 1st respondent, with a request to keep the demand in abeyance pending appeal. In the above background, the petitioner herein has come up before this Court with the present Writ Petition. 5. According to the learned counsel for the petitioner, the order passed by the 1st respondent on 24.01.2022 is highly erroneous, contrary to law and opposed to the very spirit and object of the provisions of the Act and the instructions issued by the Union of India. It is further submitted by the learned counsel that though the petitioner herein assigned valid reasons in the stay application filed on 15.10.2021, the 1st respondent failed to exercise jurisdiction and erroneously rejected the stay application, on the ground of non appearance of the petitioner herein. 3 6. On the other hand, Smt.M.Kiranmayee, learned Standing Counsel for the Income Tax Department, contends that there is absolutely no error in the impugned action and the Principal Commissioner correctly rejected the stay application, as the petitioner herein did not avail the opportunity afforded. 7. A perusal of the material available on record discloses, in clear and vivid terms, that pending appeal before the National Faceless Assessment Centre, petitioner herein filed stay application before the 1st respondent on 15.10.2021. According to the learned counsel for the petitioner, the partners of the petitioner’s firm got affected with Covid-19, during the relevant period, when the 1st respondent proposed enquiry on the stay application. It is also evident that, in the stay application dated 15.10.2021, the petitioner herein in support of his case referred to various judgments of the Hon’ble Supreme Court. It is also very much clear from a reading of the said stay application that the petitioner raised various issues. But, the 1st respondent rejected the stay application, simply on the ground that, there was no representation on behalf of the petitioner herein, at the time of enquiry. When the written version of the stay application was available before the 1st respondent, which contained elaborate contentions, the 1st respondent instead of dismissing the stay application on the ground of absence of representation, should have considered the said aspects pointed out by the petitioner in 4 the stay application and should have exercised the jurisdiction on merits. Since the issue in the present case undoubtedly has impact on the civil rights of the petitioner, this Court, having regard to the averments made in the Writ Petition, deems it appropriate to afford opportunity before the 1st respondent to pursue the stay application on merits. 8. For the aforesaid reasons, the Writ Petition is allowed, setting aside the order bearing F.No.Pr.CIT-I/VSP/Stay/ AANFN0910D/2021-22, dated 24.01.2022, passed by the 1st respondent and the stay application filed by the petitioner before the 1st respondent on 15.10.2019 stands restored to file for fresh consideration of the same on merits and for passing appropriate orders, after giving notice to the petitioner in advance, as to the date of such enquiry. There shall be no order as to costs. Consequently, Miscellaneous Petitions, if any, pending shall also stand dismissed. __________________________ JUSTICE A.V.SESHA SAI _______________________________ JUSTICE RAVI NATH TILHARI Date:29.04.2022 VSL 5 HON'BLE SRI JUSTICE A.V.SESHA SAI AND HON’BLE SRI JUSTICE RAVI NATH TILHARI WRIT PETITION No.12376 of 2022 Date: 29.04.2022 VSL "