MR. SAYED WAJID SHAH HUSSAINI V. COMMISSIONER OF INCOME TAX (APPEALS)

WP/4636/2020

AI Insights

The case involves Mr. Sayed Wajid Shah Hussaini, an agriculturist, who filed a writ petition under Articles 226 and 227 of the Constitution of India against the Commissioner of Income Tax (Appeals) and the Income Tax Officer. The petitioner sought a direction for the Commissioner to dispose of his appeal regarding an assessment order that included an unexplained investment in agricultural land. The petitioner argued that the demand for tax should not be enforced until the appeal was decided and that his application for a stay on the demand was not being considered. The court decided not to intervene in the assessment order at this stage but emphasized the need for a timely decision on the stay application and the appeal.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 697287 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-03-2020
• Assessment Year: misc
• Other Referred Cases: M/s. Shriram Finance, Flipkart
• Laws Referred To: Articles 226 and 227 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI; E I SANMATHI
• Assessee Lawyers: MAHESH UPPIN
• Keywords: Agricultural income; Income Tax; Stay Application; Unexplained investment; Writ petition
• Section: 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF MARCH, 2020 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.4636/2020 (T-IT) Between: Mr. Sayed Wajid Shah Hussaini S/o. Syed Khalander Shah Hussaini, Old Mosque Road, Arehalli, Belur Taluk, Hassan – 573 101. … Petitioner (By Sri. Mahesh R. Uppin, Advocate) And: 1. Commissioner of Income Tax (Appeals) Aayakar Bhavan, No.21/6, Residency Road, Nazarbad, Mysuru 575 010. 2. Income Tax Officer Ward – 2, Aayakar Bhavan, 2nd Stage, Belur Road, Hassan – 573 201. … Respondents (By Sri. Jeevan J. Neeralgi, Adv. and Sri. E. I. Sanmathi, Adv.) 2 This Writ Petition is filed under Articles 226 and 227 of the Constitution of India, praying to direct the 1st respondent to dispose off the appeal dt. 22.01.2020 marked as Annexure – D bearing acknowledgment No. 294336471220120 filed by the petitioner within a period of three months and till the disposal of the said appeal, not to make any demand of tax. This Writ Petition coming on for preliminary hearing this day, the Court, made the following: ORDER Petitioner is stated to be an agriculturist growing coffee and pepper and had filed his return of income for the assessment year 2017-18. The agricultural income was declared as Rs.11,01,500/- and the total income was declared as nil. It is submitted that petitioner’s case was selected for limited scrutiny by the department and the sale consideration of Rs.39,50,000/- paid by the petitioner to his vendor with respect to a purchase transaction relating to purchase of 9.16 acres of agricultural land has been taken note of and as the petitioner is stated to have had no source of income to purchase a demand draft on 04.01.2017, the said 3 amount utilised for payment of demand draft was taken as unexplained investment. 2. It is submitted that after the assessment order was passed, the petitioner is stated to have filed an appeal before the 1st respondent. It is further submitted that the petitioner has filed an application for stay and on the said application no orders are passed till date. Copy of the application filed before the Commissioner of Income Tax (Appeals) is enclosed as Annexure-E and so also copy of the application seeking for demand to be kept in abeyance filed before the Assessing Officer is enclosed at Annexure-F. 3. Petitioner contends that without passing any order on the application for stay, the Department is seeking to enforce the demand as per Annexure-B. 4. In light of the appeal having been filed, the question of intervening as regards to the assessment 4 order at this stage is not appropriate. However, as regards the contention that the consideration of 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. 5. In light of the above, as the application for stay in the appeal at Annexure-E cannot be kept in 5 abeyance indefinitely, same is to be considered expeditiously within a period not later than three weeks from the date of release of this order. In the peculiar facts and circumstances of the case, the Appellate Authority to consider the request for disposal of appeal expeditiously. In the interregnum, there would be stay of the demand at Annexure-B till the Appellate Authority considers the application of the petitioner for stay. Accordingly, the petition is disposed off. Sd/- JUDGE VP "