Goldstar Power Limited V. The National Faceless Assessment Centre, Govt. of India

SCA/23241/2022

AI Insights

Goldstar Power Limited filed a petition under Article 226 of the Constitution of India against the National Faceless Assessment Centre, challenging the inaction on part of the respondent in not staying the demand raised from a high-pitched assessment for the assessment year 2016-2017. The assessment was reopened based on information related to accommodation entries involving bogus sales/purchases and loans. The petitioner sought a stay on the demand until the disposal of the appeal by the Commissioner of Income-tax (Appeals). After several rounds of applications and hearings, a stay was granted by the Principal Commissioner of Income-Tax, Jamnagar, which was later extended by the High Court. The court did not enter into the merits of the case but directed the Principal Commissioner to expedite the decision on the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 818840 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 06-12-2022
• Assessment Year: misc
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KALPANA RAVAL; NIKUNT RAVAL; KARAN SANGHANI
• Assessee Lawyers: VAIBHAVI PARIKH
• Keywords: Assessment Order; Bogus entries; High-pitched assessment; Income Tax; Stay of demand
• Section: 147; 148; 132; 69C; 144B

Judgement Text

"C/SCA/23241/2022 ORDER DATED: 06/12/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 23241 of 2022 ========================================================== GOLDSTAR POWER LIMITED Versus THE NATIONAL FACELESS ASSESSMENT CENTRE, GOVT. OF INDIA ========================================================== Appearance: MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MRS KALPANA RAVAL with MR NIKUNT RAVAL & MR KARAN SANGHANI, ADVOCATES for the Respondents ========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MRS. JUSTICE MAUNA M. BHATT Date : 06/12/2022 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Draft amendment to the memo of petition is permitted. To be carried out forthwith. 2. The matter is taken up for final disposal with the consent of both the sides considering the limited aspect which this Court is required to consider. 3. Petition preferred under Article 226 of the Constitution of India questions and challenges the inaction on the part of the respondent for not staying the demand raised in the case of the petitioner pursuant to the framing of high pitched Page 1 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 assessment under Section 147 read with Section 144B of the Income-Tax Act, 1961 (“the Act” for short) vide assessment order dated 29.3.2022 for the assessment year 2016-2017 with the following prayers: “7. The Petitioner, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to: (a) stay the demand for Assessment Year 2016- 17 raised pursuant to framing of high pitched assessment vide order dated 29.03.2022 passed under section 147 r.w.s. 144B of the Act till the disposal of appeal by the Commissioner of Income-tax (Appeals); (b) pending the admission, hearing and final disposal of this petition, direct the Respondent authorities not to take any coercive action so as to recover the demand for the Assessment Year 2016-17 raised pursuant to framing of high pitched assessment vide order dated 29.03.2022 passed under section 147 r.w.s. 144B of the Act till the disposal of appeal by the Commissioner of Income-tax (Appeals); Page 2 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 (c) alternatively, direct the first appellate authority to grant early hearing of the appeal preferred against the Assessment Order dated 29.03.2022 passed under section 147 r.w.s. 144B of the Act for the Assessment Year 2016- 17; (d) to provide for the cost of this petition; (e) any other relief as may appeal to Your Lordships.” 4. The petitioner’s return was filed for the A.Y. 2016-2017 on 30.9.2016. His case was reopened under Section 148 of the Act on the strength of the information received by ACIT, Circle 1, Jamnagar on 28.3.2021. The search was carried out under Section 132 of the Act in case of Shri Sanjay Govindram Agrawal. He was found to be involved in providing accommodation entries in the from of bogus sales/purchases, bogus share premium, unsecured loans etc, to various persons through various concerns, one of whom was Shri Lucky Bajoria. The petitioner was alleged to be one of the beneficiaries of such accommodation during the year under consideration on account of transaction with one such bogus concern named M/s. Mahavir Enterprise, proprietor concerned of Shri Lucky Bajoria, one of the accomplice of Sanjay Page 3 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 Agrawal. 4.1. Petitioner had claimed the amount of Rs.15,65,89,341 as an expense during the year under consideration and therefore, according to the respondents income to that extent chargeable to the tax has escaped the assessment and hence the case of the petitioner was reopened and a show cause notice was issued on 8.3.2022. 4.2 When the petitioner was called upon to show cause as to why addition of Rs.15,65,89,391/- should not be made under the head “profits and gains of business and profession” because of the accommodation entries in the form of expense, a detailed response was given to the said show cause notice. 5. Once again another show cause notice on 26.3.2022 was given which according to the petitioner had showed a change in the stand of the respondents as to why the said amount should not be made in the hands of the petitioner under Section 69C of the Act. The demand came to be raised of Rs.9,40,92,782/-. An appeal came to be preferred on 9.4.2022 against the said assessment order before the First Appellate Authority. The petitioner vide the communication dated 3.5.2022 moved an application for stay of demand raised for the year under consideration consequent to passing of the Page 4 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 assessment order. On 26.4.2022, the petitioner moved an application before the high pitched committee in relation to stay of recovery of demand in question. His request on 9.5.2022 was rejected by assessing officer for stay of demand moved and called upon the petitioner to pay the amount of Rs. 1,88,18,555/- which is 20% of the demand amount, upon which the balance demand would be stayed till 31.3.2021 or till the disposal of the First Appeal, whichever is earlier. 6. Being aggrieved by the said, on 10.5.2022, an application was moved for stay of demand before the Principal Commissioner of Income Tax, Jamnagar by the petitioner. On 23.5.2022, the Principal Commissioner of Income Tax, Jamnagar, did not stay the entire demand till the decision of First Appeal. However, it had directed the petitioner to seek suitable installments from the assessing officer in payment of 20% demand and it also had advised the assessing officer to grant suitable installments in support of payment of 20% of demand, if so requested by the petitioner. 7. The review application came to be filed for stay of the demand on 13.7.2022 by the petitioner. The Principal Commissioner of Income Tax on application for stay of the demand, on 6.9.2022 stayed the demand till the decision of the Local Committee or 31.10.2022 whichever is earlier and Page 5 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 thereafter he had directed the petitioner to pay 20% of the demand till the decision of the First Appeal and the stay application was accordingly disposed of. 8. In the meantime, the petitioner had preferred Special Civil Application No.17913 of 2022 before the High Court on 30.8.2022 and challenged the inaction on the part of the respondents as to not staying demand raised pursuant to the framing of the high pitched assessment for the year under consideration. Because of the order, on 6.9.2022 where the Principal Commissioner of Income-Tax had stayed the demand, on 13.9.2022 the petitioner had withdrawn the said petition and the Court permitted the same (Coram: Hon’bke Mr. Justice N.v. Anjaria and Hon’ble Mr. Justice Bhargav D. Karia). “By way of filing this petition under Article 226 of the Constitution, the petitioner has prayed for direction against the respondent- Income Tax authorities to stay the demand for the assessment year 2016-17 raised pursuant to the framing of high pitched assessment by order dated 29.3.2022 passed under Section 147 read with Section 144B of the Income Tax Act, 1961 till the disposal of the appeal by the Commissioner of Income-Tax (Appeals). Page 6 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 2. Today when the petition comes up for consideration, learned senior advocate Mr.Tushar Hemani with learned advocate Ms.Vaibhavi Parikh for the petitioner produced communication dated 6.9.2022 received from the office of the Principal Commissioner of the Income Tax, Jamnagar which reflects that the petitioner has obtained stay of demand case for assessment year 2016-17 which order is brought under challenge in this petition. 3. The copy of the said communication is taken on record. 4. In view of the above communication and the stay obtained till 31.10.2022, learned senior advocate does not press this petition, at this stage. 5. Accordingly, this petition is disposed of as not pressed. ” 9. The petitioner once again moved a review application for stay of the demand before the Principal Commissioner of Income-Tax since the stay granted on 6.9.2022 was operating Page 7 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 till 31.10.2022. Jurisdictional assessing officer was also informed about filing of such review application and the assessing officer was requested not to take coercive action towards the recovery of demand. No order came to be passed by the officer concerned i.e. the Principal Commissioner of Income-Tax which had aggrieved the petitioner. According to him, non-extension would in serious manner jeopardize the interest of the petitioner and hence, the present petition with the aforementioned prayers. 10. We have heard Mr. Tushar Hemani, learned senior advocate assisted by Ms. Vaibhavi, learned advocate for the petitioner. 11. It is argued before us that the petitioner in a second application for review for stay of the demand on 1.11.2022 before the Principal Commissioner of Income-Tax requested the extension of the order as the order was operative only till 31.10.2022. 12. Our attention is drawn to instruction No.17/15 dated 9.11.2015 as also the instruction 225/101/2021-ITA-II dated 23.4.2022 which speaks of the constitution and functioning of the local committee to deal with the tax payers grievances from high pitch scrutiny assessment. It is urged before us that Page 8 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 once having been convinced that the matter is pending before the local committee, no purpose is served by the officer concerned for not extending the order of suspending the demand. The earlier communication dated 6.9.2022 received from the officer of Principal Commissioner of Income-Tax clearly reflected that the petitioner had requested for stay of the demand for assessment year 2016-2017 and hence with no communications from the local committee non-extension on the part of the respondents is seriously questioned. 13. We have heard Mr.Nikunt Raval, learned advocate on behalf of Mrs. Kalpana Raval, learned senior standing counsel. 14. Our attention is drawn to the fact that the minutes of the meeting of local committee dealing with the tax payers grievances in relation to this very petitioner, it is finalised on 21.6.2022. However, the same had not been communicated to the concerned assessing officer nor to the Principal Commissioner of Income-Tax. On a request made to the learned senior standing counsel the details had been inquired from the concerned committee and it was realized that on 21.6.2022, the order has already been passed which for some strange reason had never reached to the assessing officer nor the Principal Commissioner of Income-Tax. The exact date of the same being sent to the concerned officer as also not known Page 9 of 10 C/SCA/23241/2022 ORDER DATED: 06/12/2022 to the Court. Be that as it may. Presently what is noticed is that the committee’s findings and observations clearly make out that this is not a case of high pitched assessment and therefore, now it is before the Principal Commissioner of Income-Tax to decide in adjudication process and decide in accordance with law. It is quite clear that from 31.01.022 the petitioner has been protected. The respondent since had not received any communication from such committee, the further extension by way of a protection should have continued till the petitioner actually receives the order after the Appellate authority takes a call on the merit of the matter, hence, this protection deserves to be there. Therefore, while disposing of this petition direction for the Principal Commissioner of Income-Tax is to decide the appeal expeditiously within a period of four weeks. The protection which had been granted also shall continue till then. 15. This Court has not entered into the merits of the matter and therefore, both the sides shall be at liberty to raise their respective stand before the authority concerned. (SONIA GOKANI, J) (MAUNA M. BHATT,J) NAIR SMITA V. Page 10 of 10 "