MEHTA GOLD PRIVATE LIMITED V. COMMISSIONER OF INCOME TAX (APPEALS) - 4

WP/5634/2020

AI Insights

Mehta Gold Private Limited filed a writ petition against the Commissioner of Income Tax (Appeals) and the Assistant Commissioner of Income Tax, challenging the enforcement of a demand notice and the rejection of a stay request related to the Assessment Year 2017-2018. The petitioner argued that the rejection of the stay was without meaningful consideration and sought a writ of mandamus to prevent the enforcement of the demand until the appeal was decided. The court referenced several circulars and previous judgments to underscore the need for a reasoned consideration of the stay application, without expressing any opinion on the merits of the case.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 766877 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-03-2020
• Assessment Year: misc
• Other Referred Cases: M/s. Shriram Finance v. Principal Commissioner of Income Tax (1) and 4 Others, Flipkart India Private Limited v. The Assistant Commissioner of Income Tax
• Laws Referred To: Articles 226 & 227 of the Constitution of India, Section 156 of the Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: SHREEHARI KUTSA
• Keywords: Income Tax; Notice of demand; Stay of Assessment Order; Writ of Certiorari; Writ of Mandamus
• Section: 156

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF MARCH 2020 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.5634/2020 (T-IT) Between: Mehta Gold Private Limited, Represented by Director, # 969, Mehta Tower, Sharekhan Lane, Near Dharmaraya Swami Temple, Nagrathpet,Bengaluru – 560 002. …Petitioner (By Sri Shreehari Kutsa, Advocate) And: 1. Commissioner of Income Tax (Appeals) – 4, 7th Floor, BMTC Building, 80 feet Road, 6th Block, Near KHB Games Village, Koramangala, Bengaluru – 560 095. 2. Assistant Commissioner of Income Tax, Circle 4(1)(2),4th Floor, BMTC Building, 80 feet Road,6th Block, Near KHB Games Village, Koramangala, Bengaluru – 560 095. … Respondents (By Sri Jeevan J. Neeralgi, Advocate) 2 This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to direct the R-2 to not enforce the notice of demand under Section 156 dated 30.12.2019 for the Assessment Year 2017-2018 bearing DIN and notice until disposal of appeal filed before the R-1 a computer print out of the notice of demand under Section 156 dated 30.12.2019 for the Assessment Year 2017-2018 bearing DIN and notice is enclosed to this petition in Annexure-A and quash the communication rejection request for stay issued by the R-2 dated 04.02.2020 in letter for the Assessment year 2017-2018 and enclosed to this petition in Annexure-C and etc. This Writ Petition coming on for preliminary hearing this day, the Court made the following: ORDER The petitioner has sought for issuance of a writ of mandamus directing the respondent No.2 not to enforce the notice of demand until disposal of appeal by respondent No.1. The petitioner has also sought for issuance of a writ of certiorari to quash the communication rejecting the request for stay by respondent No.2 by its order dated 04.02.2020 at Annexure-C. The petitioner has also sought for a direction to the respondent No.1 to dispose of the appeal 3 that has been filed against the assessment order expeditiously within the time-frame to be fixed. 2. The petitioner submits that he has a good case on merits and in light of equity of facts in its favour and various legal contentions, has sought for stay of the assessment order, which however, has been rejected as per the order at Annexure-C wherein no reasons are forthcoming, except an observation that the stay would be conditional on payment of 20% of the disputed demand. The petitioner contends that there has been no meaningful consideration of his application for stay. 3. It is further contended that the application for stay ought to be disposed off in light of the Circular bearing No.1914, further amended on 25.01.2017, 29.02.2016 and 31.07.2017 and also keeping in mind the observations made by the High Court of Judicature at Madras in the case of M/s. Shriram Finance v. Principal Commissioner of Income Tax (1) and 4 Others (W.P.No.5425/2019 & W.P.Nos.6166 & 6168/2019 decided on 01.03.2019) as well as the order of this Court in the case of Flipkart India Private Limited v. The Assistant Commissioner of Income Tax (W.P.Nos.1339-1342/2017 decided on 23.02.2017). 4. Learned counsel appearing for the Revenue submits that the petition is premature and no doubt, the Principal Commissioner of Income Tax (PCIT) has not passed any order on the representation of the petitioner 05.02.2020 which was filed subsequent to the filing of the writ petition, but the same would be considered in accordance with law and in accordance with the existing circulars as applicable. 5. In light of the appeal having been filed, the question of intervening as regards to the assessment order at this stage is not appropriate. However, as regards the contention that the consideration of 5 application for stay and further exercise of power of the PCIT keeping in mind the circular bearing No.1914 as amended on 21.5.2017, 29.2.2016 and 31.7.2017, the request of the petitioner is to be considered in a meaningful manner. In fact, the power of granting stay has been considered by the High Court of Judicature at Madras in the case of M/s. Shriram Finance (supra) wherein, certain guidelines have been referred to in para-5 which may be taken note of. So also the manner of exercise of power of the Principal Commissioner of Income Tax is detailed in Flipkart’s case (supra) at paras–18 and 19, which needs to be kept in mind. This Court refrains from expressing any opinion on the merits of contentions raised, but reiterates that the PCIT is to exercise power conferred upon him as per the circulars in a meaningful manner. This Court in the order dated 23.02.2017 passed in Writ Petition Nos. 1339-1342/2017 at para-16 has further observed that PCIT is also to examine as to whether the grounds as 6 made out by the assessee that assessment is “unreasonably high pitched” or the requirement of deposit would lead to genuine hardship being caused to the assessee. The said aspect needs to be kept in mind when considering the request of the petitioner for review of order of stay as ordered herein. 6. It is submitted by the petitioner that in terms of the procedure prescribed under the circular, the petitioner has filed an application before the PCIT seeking review of the order rejecting application for stay. 7. The petitioner to be present before the Principal Commissioner of Income Tax and the request of petitioner as contained in the representation dated 05.02.2020 would be disposed of in light of the observations made above. 8. The PCIT to dispose of the representation of the petitioner within a period not later than one week 7 from the date of appearance of the petitioner as noticed above. All contentions of parties are kept open. This petition is accordingly disposed off. Sd/- JUDGE VGR "