Mr. Sudarshan Reddy Kottur V. The Income Tax Officer

WP/1814/2023

AI Insights

The case involves Mr. Sudarshan Reddy Kottur, the petitioner, who contested an order from the Income Tax Officer requiring him to pay 20% of a disputed tax demand for the assessment year 2017-18, pending the appeal's disposal. The petitioner argued that the order was arbitrary, lacked reasoning, and violated principles of natural justice. The High Court found that the Income Tax Officer had not properly exercised his quasi-judicial powers and had merely followed departmental instructions without applying his mind to the specifics of the case. Consequently, the court set aside the order and remanded the matter for a fresh decision, ensuring the petitioner is given a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 753086 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 30-01-2023
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax v. LG Electronics India M. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SAPNA REDDY
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Assessment Year 2017-18; Mandamus; Quasi judicial powers; Stay of demand; Writ petition
• Section: 147; 144; 151; 226; 220(6); 246.4

Judgement Text

"[ 3311 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdic'tion) MONDAY, THE THIRTIETH DAY OF JANUARY TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO: 1814 OF 2023 Between: Mr. Sudarshan Reddy Kottur, S/o Mr. K.Hanmath Reddy, aged 44 years. Occ: Business, D. No. 4-41320, Gujrathi Galli, Bank Street Koti, Hyderabad - 500 001 , Telangana. ...PETITIONER AND 1. The lncome Tax Officer, Ward 5(1), Hyderabad, lT Towers, AC Guards, Masab Tank, Hyderabad - 500 084, Telangana. 2. The Additional / Joint / Deputy / Assistant Commissioner of lncome Tax / lncome Tax Officer, National e-Assessment Center, New Delhi, Room No. 401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi - 110 003. .,.RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, Order or Direction, one, more particularly in the nature of Mandamus declaring the order of the 1st Respondent, dated '16.01.2023, vide DlN. ITBA/COMIFl17l2O22- 2311O487356a5(1), directing the Petitioner to pay 20 percent of the disputed demand, pending disposal of the appeal of the Petitioner before the 1st Appellate Authority, for the Assessment Year 2017 - 18, as arbitrary, illegal, bad in law, bereft of any reasons, violative of principles of natural justice and to consequently set-aside the same and grant stay of recovery, pending disposal of the Petitioners appeal before the 1st Appellate Authority, in the interests of justice. Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to lA NO: 1 OF 2023 'grant stay of all furth )r proceedings, including any recovery, cending disposal of the above Writ Petitic n. Counsel for the Petit oner: SRI A.V.A. SIVA KARTIKEYA Counsel for the Res; ondents: Ms. SAPNA REDDY REPREST:NTING FOR SRI J.V. PRASAD (Sr. SC FOF INCoME TAX) The Court made the 'ollowing: ORDER i I I THE HON'BLE THE CHIET JUSTICE UJJAL BI{UYAN AND THE HON,BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.1814 of 2023 ORDER: (Per tlrc Hon'ble the Chief Justice Uijd Bhugan) Heard Mr. A.V.A.Siva Kartikeya, learned counsel for the petitioner and Ms. Sapna Reddy, learned counsel representing Mr. J.V.Prasad, learned Senior Standing Counsel, Income Tax Department for the respondents. 2. Petitioner is an assessee under the Income Tax Act, 1961 . (briefly referred to hereinafter as :the Act') having the status of an individual. For the assessment year 2al7-18, petitioner had submitted return of income on 3O.10.2017 declaring total income of Rs.15,O2,400.OO. On the ground that Assessing Officer had reason to believe that income chargeable to tax had escaped assessment, assessment proceedings of the petitioner for the aforesaid assessment year was reopened whereafter 2'd respondent passed assessment order dated 3O.O3.2O22 under Seclion 147 read with Section 1448 of the H(:J & NTRJ W.P.,\"lc 18 ; 4 of 2O23 Act. By the r tforesaid order of assessment, tota,l inc:ome of the petitioner hal been assessed at Rs.24,89,2r,U r 1.Crt) whereafter notice of derr and under Section 156 of the Act u.as issued to the petitione: by the 2\"d respondent on 3O.03.202'2 itself. Petitioner file, I an application under Section 22o(,tl of the Act before the 1\", respondent for stay of demand. I31, the order dated 16.01.2123, lst respondent directed the peti -ioner: to pay 2Oo/<' of the dt mand on or before 25.OL.2O23, but at_ the same time rejected the application for stay of demand. Aggrieved, present writ p :tition has been liled. 3. Agl3ieved by the order of assessrnt'nt dated 3O.O3.2O22, 1 etitioner has preferred appeal befc re the 1irst appellate auth ;rity under Section 2464 of the Act- 4. Fro m a perusal of the impugned order dated 76.01.2023, i. is seen that lst respondent hrrd followed instructions of the Central Board of Direct Taxes (briefly .CBDT, hereinafter) d eted 21.03.1996 to the effect 1}at where outstanding dr mand is disputed before the appellate authority, the assessee has to pa! 2Oo/o of the disputeJ demand. 2 I I t I HCJ & NTRJ W.P.N?. 1a 14 of 2023 Accordingly, petitioner has been directed to pay 2Oo/o of the outstanding demand. 5. We are afraid l\"t respondent did not apply his mind while passing the order dated 16.01.2023. It appears to be a mechanical exercise of power. When ttre Income Tax authority exercises jurisdiction under Section 220(61 of the Act, he exercises quasi-judicial powers. While exercising quasi-judicial powers, the authority is not bound or conhned by departmental instructions. 6. This position has been well settied by the Supreme Court in Principal Commissioner of Ineome Tax v. LG Electronics India M. Ltd.r 7. That being the position, we set aside the order dated L6.O1.2O23 and remand the matter back to the 1st respondent for passing a fresh order in accordance with law after giving due opportunity of hearing to the petitioner. This sha1l be done within a period of six (06) weeks from the date of receipt of a t (zota) 12 rTR-oL 334 (SC) 3 i HCJ & NTRJ W.P llo. 18 14 of 2023 copy of this trder. Till the aforesaid period of s x (O€i) weeks, respondents ere directed not to take coercive steps lor realizing the outstand ng demand for the assessment vear 2OlT-lg. 8. W:it Petition is accordingly allowed. However, there sha-ll be no or der as to costs. 9- M scellaneous applications pending, if any, in this Writ Petition r;hall stand closed. SD/-P.P!.DMAI{ABHA REDDY ASSISTANI REGISTRAR )1, $ECTION OFFICER 1 . The lncom, r Tax Officer, Ward 5(1), Hyderabad, lT Tower':;, AO Guards, [ 4asab Tar (, Hyderabad - 500 084, Telangana. 2. The Additir nal / Joint / Deputy / Assistant Commissionet I' lnc.ome Tax / lncome Ta. Officer, National e-Assessment Center, Nev/ t.)elhi, Room No.. 401,2nd F :or, E-Ramp, Jawaharlal Nehru Stadium, Ne,v Delhi - 1-10 003. 3. One CC to SRI A.V.A. SIVA KARTIKEYA Advocate [OP.J[l 4. One CC to SRI J.V. PRASAD (Sr. SC FOR INCOME TAli) Advocate [OPUC] 5. Two CD C< pies BN 4 //TRUE COPY// To, us BSK I HIGH COURT DATED:30 0112023 ORDER WP.No.181* ot 2023 ALLOWING THE WRIT PETTTION WITHOUT (:OSTS o () 2 5 ffiB ?i:3 .1, 6 $E STA r€ { ., a E t, * ). i.. -\" t |;i' t q9 w( I I "