Kunj Bihari Lal Agarwal V. Principal Commissioner Of Income Tax (Central), Jaipur and Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur and Assistant Commissioner Of Income Tax, Central Circle-2, Jodhpur

CW/3776/2023

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The case involves Kunj Bihari Lal Agarwal, the petitioner, challenging an order by the Principal Commissioner of Income Tax (Central), Jaipur, which disposed of his application seeking a stay on the recovery of demand for the assessment years 2014-15, 2016-17, and 2020-21. The petitioner argued that the order was passed without proper consideration of his financial hardships and was mechanical in nature, violating principles of natural justice. The court found that the order was non-speaking and non-reasoned, failing to address the petitioner's contentions adequately. The court also noted that the authority could grant a deposit order of a lesser amount than 20% pending appeal, as per the Supreme Court's decision in Principal Commissioner of Income Tax and Ors. vs. LG Electronics India (P) Ltd.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 797675 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 01-05-2023
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax and Ors. vs. LG Electronics India (P) Ltd., Dr. B.L.Kapur Memorial Hospital vs. Commissioner of Income Tax (TDS) Delhi 1 & Ors., Valvoline Cummins Ltd. vs. Deputy Commissioner of Income Tax & Ors., Soul vs. Deputy Commissioner of Income Tax, Taneja Developers and Infrastructure Ltd. vs. Assistant Commissioner of Income Tax and Ors., Charu Home Products (P.) Ltd. vs. Commissioner of Income Tax-1, Geetha Pharma vs. Deputy Commissioner of Income Tax, Circle 1(1) and Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: SHARAD KOTHARI
• Keywords: Mechanical Order; Non-speaking order; Quasi-judicial authority; Stay of recovery; High-pitch demand
• Section: 148; 143(2); 133A

Judgement Text

"[2023/RJJD/013629] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 3776/2023 Kunj Bihari Lal Agarwal S/o Shri Ram Avtar Agarwal, Aged About 43 Years, R/o A-253, Shastri Nagar, Jodhpur (Rajasthan) 342003. ----Petitioner Versus 1. Principal Commissioner Of Income Tax (Central), Jaipur, Central Revenue Building, B.d. Road, Jaipur. 2. Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur, Room No. 133 Aayakar Bhawan Paota C Road, Jodhpur. 3. Assistant Commissioner Of Income Tax, Central Circle-2, Jodhpur, Aayakar Bhawan Paota C Road, Jodhpur. ----Respondents For Petitioner(s) : Mr Sharad Kothari For Respondent(s) : Mr K.K.Bissa HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT Judgment / Order 01/05/2023 1. This writ petition under Article 226 of the Constitution of India is filed by the petitioner challenging the order dated 03.03.2023 passed by respondent No .1- PCIT, Jaipur, whereby application filed by the petitioner seeking stay of recovery of demand pertaining to assessment years 2014-15, 2016-17 and 2020-21 has been disposed of in the following manner: “The petition is disposed off subject to following stipulation(s):- 1. The Outstanding aggregate demand of Rs. 25,12,77,982/- to be stayed till disposal of 1st [2023/RJJD/013629] (2 of 9) [CW-3776/2023] appeal only upon payment of 20% of demand as per above schedule. 2. The applicant is directed to make payment as per the above schedule. 3. The assessee shall co-operate in early disposal of the appeal pending before the Ld. CIT(A). 4. Revenue retains the right to reconsider/review the payment plans/ stipulations as well as the stay order anytime in case of any exigency or administrative requirement or to safeguard the interests of revenue. 5. This order does not confer any legal right to the assessee. No finding or adjudication on assessee's pending matters can be inferred from this order. The assessee shall not act in any manner that may cause prejudice to interests of revenue. The assessee's contentions/assertions raised before the undersigned remain unsubstantiated. 6. Interest shall be payable by the taxpayer, as per law (irrespective of the stay or instalments granted). 7. The order is subject to stipulations as laid down in the CBDT office Memorandum F. No. 404/72/93- ITCC dated 29.02.2016 read with Instruction No.1914 dated 21.03.1996. 8. The assessing officer shall ensure/monitor the payment of tax dues as above. “ 2. Brief facts of the case are that a survey under Section 133A of the Income Tax Act, 1961 (hereinafter to be referred as ‘the I.T. Act’) was carried out at the premises of petitioner on 04.03.2020. On the basis of survey report, the assessments for the years 2014-15 and 2016-17 were reopened by issuing notice under Section 148 of the I.T. Act dated 24.03.2021 and 26.03.2021 respectively. Assessment for the year 2020-21 was selected for scrutiny under Section 143(2) of the I.T. Act by issuing notice dated 28.06.2021. The Assessing Authority thereafter passed the assessment orders dated 07.03.2022 for the [2023/RJJD/013629] (3 of 9) [CW-3776/2023] assessment year 2014-15 and 2016-17 and the order dated 21.11.2022 for the assessment year 2020-21. 3. Aggrieved by the aforementioned assessment orders, the petitioner preferred an appeal before the Appellate Authority and the same is pending consideration. 4. It is to be noticed that against the original return for the assessment year 2014-15 i.e. Rs.8,04,690/-, the Assessment Officer assessed the income of the petitioner as Rs.1,22,93,066/-, whereas against the original return for the assessment year 2016- 17 i.e. Rs.10,30,940/-, the Assessment Officer assessed the income of the petitioner as Rs.1,64,73,499/-. It is also to be noticed that for the assessment year 2020-21 against the original return of Rs.2,19,09,920/-, the Assessment Officer assessed the income of the petitioner as Rs.24,19,85,720/-. As such a demand of more than Rs.25 crores has been raised against the petitioner. 5. As per the petitioner, the Appellate Authority is not empowered to grant stay on recovery and, therefore, the petitioner filed an application seeking stay on the said demand before the Assessment Officer, however, the Assessment Officer has not taken any decision on the stay application filed by the petitioner, then he filed a stay application before the respondent No.1 in terms of instruction No.1914 issued by the Income Tax Department vide order dated 21.03.1996 as modified by office memorandum dated 29.02.2016 and 31.07.2017. 6. It is also claimed by the petitioner that since the demand raised by the revenue is high-pitch demand, the same is [2023/RJJD/013629] (4 of 9) [CW-3776/2023] required to be stayed till the disposal of the appeal by the Appellate Authority. 7. It is averred in the petition that the respondent No.1 while passing the impugned order has failed to take into consideration the prima facie case, balance of convenience and irreparable injury and passed the impugned order in mechanical manner without application of mind. 8. It is further contended that the impugned order is not an speaking order and, therefore, the same is violative of principles of natural justice. It is further contended that the impugned order is contrary to the circulars and office memorandum issued by the revenue department from time to time. 9. Assailing the impugned order, Mr Sharad Kothari- learned counsel for the petitioner has argued that the respondent No.1 has simply quoted the contents of the stay applications that too are reproduced selectively without any application of mind and passed the impugned order. 10. It is further argued by the learned counsel for the petitioner that though the circulars and office memorandum issued by the respondent department from time to time guiding the officers of the revenue to grant stay on demand subject to the condition of depositing 20% of the assessed amount but the authority being quasi-judicial in nature can always order for depositing of a lesser amount than 20% of the demand. [2023/RJJD/013629] (5 of 9) [CW-3776/2023] 11. In support of the above contentions, learned counsel for the petitioner has placed reliance on decision of Hon’ble Supreme Court rendered in Principal Commissioner of Income Tax and Ors. vs. LG Electronics India (P) Ltd., MANU/SC0907/2018. He has also placed reliance on decisions of Delhi High Court rendered in Dr. B.L.Kapur Memorial Hospital vs. Commissioner of Income Tax (TDS) Delhi 1 & Ors., W.P. (C) 16287/2022 decided on 25.11.2022; Valvoline Cummins Ltd. vs. Deputy Commissioner of Income Tax & Ors., MANU/DE/0801/2008; Soul vs. Deputy Commissioner of Income Tax, MANU/DE/1504/2008; Taneja Developers and Infrastructure Ltd. vs. Assistant Commissioner of Income Tax and Ors., MANU/DE/0352/2009 and Charu Home Products (P.) Ltd. vs. Commissioner of Income Tax-1, MANU/DE/4149/2014. Learned counsel for the petitioner has also placed reliance on a decision of Madras High Court rendered in Geetha Pharma vs. Deputy Commissioner of Income Tax, Circle 1(1) and Ors., MANU/TN/3269/2020. 12. Learned counsel for the petitioner has, therefore, prayed that the impugned order dated 03.03.2023 may kindly be quashed and set aside and the respondents be directed not to insist the petitioner to pay 20% of the demand raised till the disposal of the appeal preferred by the petitioner against the assessment orders dated 07.03.2022 and 21.11.2022 respectively. [2023/RJJD/013629] (6 of 9) [CW-3776/2023] 13. Reply to the writ petition is filed on behalf of the respondent, whereby the respondent has justified the impugned order. It is mentioned in the reply that despite several notices issued to the petitioner during the assessment process, he failed to furnish satisfactory explanation and taking into consideration overall facts and circumstances of the case, the Assessment Officer passed the assessment orders for the assessment years 2014-15, 2016-17, 2020-21. 14. It is also contended that against the demand raised, the petitioner has only deposited an amount of Rs.18,914/- till date. It is further mentioned in the reply that the impugned order passed by the respondent No.1 is perfectly in consonance with the circulars and office memorandum issued by the respondent from time to time dated 29.02.2016 and the amended instructions issued on 31.07.2017. 15. Learned counsel Mr K.K.Bissa appearing for the respondents has supported the impugned order and argued that in the facts and circumstances of the case, no case for interference is made out. 16. Heard learned counsel for the parties. 17. As observed earlier, the income of the petitioner as assessed by the Assessment Officer is more than the return income. It is also observed that the difference between the assessed income and the return income is ranging from 11% to 15%. As per the circulars and office memorandum issued by the respondent from time to time, particularly Instructions No.1914 [2023/RJJD/013629] (7 of 9) [CW-3776/2023] dated 21.03.1996, 29.02.2016 and 31.07.2017, the demand raised by the revenue falls within the definition of high-pitch demand. 18. We have gone through the impugned order passed by the respondent No.1. It is revealed from the impugned order that the respondent No.1 quoted certain portions of the stay application filed on behalf of the petitioner and also the submissions filed on his behalf before it. After quoting certain portions of the stay application and submissions, the respondent No.1 has passed the impugned order without meeting out the contentions raised on behalf of the petitioner regarding undue hardships on account of his financial condition and the downfall in the export industries. 19. From the reply filed on behalf of the revenue, it can be gathered that respondent No.1 has completely followed the instructions provided in the instructions/office memorandum dated 29.02.2016 and 31.07.2017. 20. Hon’ble Supreme Court in Principal Commissioner of Income Tax and Ors. vs. LG Electronics India (P) Ltd. (supra) 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 CIT 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 per cent, pending appeal.” [2023/RJJD/013629] (8 of 9) [CW-3776/2023] 21. From the above, it is clear that the Hon’ble Supreme Court has also ruled that administrative circulars issued by the revenue department from time to time on the subject will not operate as a fetter and the authority being a quasi-judicial authority can always grant deposit order of lesser amount than 20%. 22. As observed earlier, from the perusal of the impugned order, it can be gathered that the respondent No.1 is completely guided by the administrative circulars issued by the revenue department and has failed to give any finding about the hardships pointed out by the petitioner and has also not taken into consideration the factors such as prima facie case, balance of convenience and irreparable loss while passing the impugned order. 23. Taking into consideration the above facts and circumstances of the case, we are of the opinion that the impugned order is not liable to be sustained as the same is a non- speaking and non-reasoned order. 24. In the result, the writ petition is allowed and the impugned order is quashed and set aside. The matter is remanded to the respondent No.1 to pass a fresh order keeping in view the fact that being a quasi-judicial authority, it is open to it to grant the deposit order of a lesser amount than 20% while taking into consideration the facts and circumstances of the case particularly the hardships pointed out by the petitioner in stay application and other submissions. The respondent No.1 shall pass a fresh order [2023/RJJD/013629] (9 of 9) [CW-3776/2023] after providing opportunity of hearing to the petitioner expeditiously, preferably within a period of six weeks from the date of production of certified copy of this order. 25. Stay petition stands disposed of. (YOGENDRA KUMAR PUROHIT),J (VIJAY BISHNOI),J masif/-D.R. "