Mrs. Kallakuri Dhana Lakshmi Katyayani V. The Income Tax Officer

WP/2942/2022

AI Insights

The case involves Mrs. Kallakuri Dhana Lakshmi Katyayani, who operates an authorized APTOnline (MeeSeva) Centre and is also an assessee under the Income Tax Act, 1961. For the Assessment Year 2018-19, her income was assessed significantly higher than reported, leading to a demand notice. Aggrieved by the assessment and the subsequent demand, she filed an appeal and sought a stay on the demand payment, which was conditionally granted by the Income Tax Officer, requiring a 20% payment. This condition was challenged in the High Court, leading to the current judgment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 758250 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 25-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A RADHA KRISHNA
• Assessee Lawyers: A V A SIVA KARTIKEYA
• Keywords: Assessment Order; Income Tax; Mandamus; Natural Justice; Stay of demand
• Section: 143(3); 144B; 220(6); 226(3)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA: AT HYDERABAD (Special Original J urisdiction) FRIDAY ,THE TWENTY FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE A.VENKATESHWARA REDDY Between: Mrs. Kallakuri Dhana Lakshmi Katyayani, Wio Mr. K.V.R.Seshagiri Rao, Aged 56 years, Occ. Business, H. No.C3-202, Chanda Nagar, HUDA Colony, Hyderabad - 500 049, Telangana. ...PETITIONER AND 1 The lncome Tax Officer, Ward - 8(1), Hyderabad, Signature Towers, Sy. No.6(P) of Kondapur, Sy. No..37(P) of Kothaguda, Opposite Botanical Gardens, Serilingampally Mandal, Ranga Reddy District, Hyderabad - 500 084, Telangana. The Principal Commissioner of lncome Tax - 2, Hyderabad, 6th floor, A Block, lT Towers, 10-2-3, A.C. Guards, Hyderabad - 500 004, Telangana. The Additional / Joint / Deputy / Assistant Commissioner of lncome Tax / lncome Tax Officer, National Faceless Assessment Center, New Delhi, Room No.401 , 2nd Floor, E-Ramp, 4. The National Faceless Appeal Centre (NFAC), Delhi, lncome Tax Department, Ministry of Finance, Government of lndia. 5. The State Bank of lndia, Manikonda Branch, D. No.2-30l1 , lndra Nagar, Gachobowli, Hyderabad, Telangana - 500 032. 6. APTOnline Limited, Plot No. 1, E Park, Jubilee Gardens, Cyberabad, Hyderabad -500 084, Telangana. ...RESPONDENTS Petition under Article 226 of the 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. a. the order of the 1st Respondent, dated 16.12.2021 , in directing the Petitioner to pay 2Opercent of the disputed demand, pending disposal of the 2 3 i WRIT PETITION NO: 2942 OF 2022 f. ( Petitioner's appeal t efore the 4th Respondent, for the Assessment Year 2018 - 19, as arbitrary, illeg ll, bad in law, bereft of any reasons, violative of principles of natural justice, se! rside ihe same and to consequently grant stay of any recovery, pending d sposal of the Petitioners appeal before the ,1 st Appellate Authority, in the inter:sts of justice, b. the inaction of the 2nd Respondent in deciding the stay application filed by the Petitioner di ,ted 03.01 .2022' pending disposal of Petitioner's appeal before the 4th Resprndent, for the Assessment Year 2018 - 19, as arbitrary, illegal, bad in law, v tlative of principles of natural justice, and to consequently direct the 2nd Respc rdent to treat the Petitioner Assessee as an Assessee not in default, pending c sposal of the Petitioner's appeal before the 1st Appellate Authority, c.Thenoticesls226(3)ofthelncomeTaxAct,l96'1,dated07'12'2021' issued by the 1st R:spondent to the bankers of the Petitioner, i.e., the 5th Respondent herein, rs arbitrary, illegal, bad in law, violative of principles of natural justice and to :onsequently set-aside the same in the interests of justice' and d.thenoticeu,s226(3)ofthelncomeTaxAct,l96l,dated24'122021' issued by the 1st Res )ondent to the 6th Respondent herein, as arbitrary, illegal, bad in law, violative o principles of natural justice and to consequently set-aside the same in the interer ts of justice. IANO:1 OF 2022 lA NO: 2 OF Petition under s ection 151 cPC praying that in the circtrmstances stated intheaffidavitfiledinsupportofthepetition,theHighCourtmaybep-leasedto gr\"ni tiry of all furthe pioceedings, including any recovery, pending disposal of the above Writ Petition PetitionunderS:ctionl5lCPCprayingthatinthecircumstancesstated in the affidavit filed in ;upport of the petition, ine Higfr Cgyrt may ne^gt91s^e! to ;;;;;; G.otice u/: ziapl ot the lncome Tax Act' 196'1' dated 24'12'2021' issued by the 1st Aper pondent to the 6th Respondent Lerein' pending disposal of the above Petition Petition under section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, ine nign Court may 0\".!]99^t:! to sr.plnO the notice uts iiO(S) of the lncome Tax Act, '1961, datedg71122021, issued by the 1st Respondent io the 5th Respondent herein, pending disposal of the above Writ Petition. lA NO: 3 oF 2022 A NO: 4 OF 2022 Between: The lncome Tax Officer, Ward - 8(1), Hyderabad, Signature Towers' Sy' f'f \"sipl \"ik,j.oaprr, Sv. No..37(P)'of Kothagudl opposite Botanical cr''i'\"rirlsiiirirg5mbJtiv Mandai, Ranga Reddv District, Hvderabad - 500 084, Telangana. ...Petitioner/ResPondent i l.Mrs.KallakuriDhanaLakshmiKatyayani,W/otMr.K.V.R'Seshagiri.Rao, Aoed 56 uuur., O.i. Business' H. No'C3-202, Chanda Nagar' HUDA c6lonv. Hvderabad - 500 049, Telangana' z in'\"\"piiniib\"r Co.hi..ion\",. of lncorie Tax - 2, Hvderabad' 6th floor' A Block, lr rowers, i075, a.c. cui,os, nyderabal - 500 004' Telangana' S. ifrJAaOitionaf I .lolntT ObpuiV I Assistant'Commissioner of lncome Tax / - rncomelii offic;r; Nat,;;jlFaceless Assessment Center' New Delhi' Room No.40'1 , 2nd Floor, E-RamP, +. fne fttaiionat f acetesi Rirpeal Cdntre (NFAC), Delhi.' lncome Tax Oepartment, Ministry of Fihance, Government of lndia' s. ih5 sijte aanr oi'irioia, Manikohda Branch, D. No.2-3011 , lndra Nagar, - Gachobowli, Hyderabad, Telangana - 500.0-32' o. AFionrine Liniit;, Floi'No. '1 , \"E Park, Jubilee Gardens, cyberabad' Hyderabad-500084'Telangana ...Respondents/petitioners PetitionunderSectionls,lcPcprayingthatinthecircumstancesstated in the affidavit filed in support of the peiition, ine Hign Cout-m?v !e^qle3s9d to vacate the interim order in l.A.No. I oI 2021 in w.P.No.2942 0f 2022 daled 2110112022. Counsel for the Petitioner: SRI A.V'A'SIVA KARTIKEYA Counsel for the Respondents: SRI A'RADHA KRISHNA The Court made the following: ORDER AND THE HONI)URABLE SRI JUSTICE UJJAL BHUYAN THE HONOU, \"ABLE SR\"I JUSTICE A. VENKATESHWAITA REDDY '!ilrit Petitio nNo.2942 of 2022 ORDER: (Per rlon'ble Sri Jtrstice Ujjal Bhwan) Heard {r. A.V.A. Siva Kartikeya, learned counsel for the petit oner and Mr. A' Radha Krishna, learned Standing Co rnsel for the Income Tax Department, for respondent l os.1 to 4. 2. Accordi rg to petitioner, she is engaged in the business ol running an authorised APTOnline (MeeSeva) C:ntre / Common Service Centre (CSC) (popularly kr:own as 'MeeSeva' Centre) r,l'hich is a joint venture of Tala Consultancy Services and Government of Telangana. 3. As part of her business, she makes deposit on behalf of her ,:ustomers to the various banks, primarily AND I i UB,J & AVR,J wp_2942_2O22 to the State Bank of India. The deposits pertain to varrous consumer bills, viz., electricity, water, telephone, etc. Petitioner is also an assessee under the Income Tax Act, 196 1 (briefly, the Act'hereinafter) and is assessed under the jurisdiction of respondent No.1. Assessment status of the petitioner is that of indiuiduql. 4. For the Assessment Year 2018-19, Assessment Order was passed by the National e-Assessment Centre, Delhi, on 23.04.2O21 under Section 1a3(3) of the Act read with Section l44B of the said Act. As against the income shown by the petitioner in her return, i.e., Rs.4,31,500/-, the income of the petitioner has been assessed at Rs.8,02,30,250 l- in the Assessment Order. Following the Assessment Order, demand notice came to be issued to the petitioner. 5. According to learned counsel for the petitioner, 2 i the deposits made by the petitioner on behalf of her UB,J & AVR,J wp_2942_2022 customers :rave been treated as the income of the petitioner w rich has resulted in such high assessment. 6. Aggrier ed by the aforesaid order of assessment, petitioner t as preferred appeal before the National Faceless Ap:eal Centre, i.e., responclent No.4 vide acknow edgment No.34724682003052 1. 7. In the neanwhile, petitioner filed application for stay of deme nd before respondent No.1 under Section 220(6l'of the Act. 8. By orde: dated 16.12.2021 , respondent No. 1 has taken the vi:w that stay can be granted subject to payment of 2Ook of the outstanding demand within a week. While arriving at the above, respondent No. 1 placed relian,,e on Circular dated 3),.O7.2017, issued by the Centra Board of Direct Taxes. 9, Learned counsel for the petitioner submits that respondent Nr'.1 issued notice to State Bank of India, Delhi, i i Manikonda Br anch (respondent No.5), for attachrnent UB,J & AVR,J wp_2942-2O22 of bank accounts of the petitioner under Section 226(31 of the Act whereafter bank accounts of the petitioner maintained with respondent No.5 have been attached. The three bank accounts of the petitioner maintained with the respondent No.S-Bank are 31281487025, 343 17 O L 4 1 06 and 3375 4560562, respectively. 1O. Further, respondent No.1 has issued similar notice to respondent No.6 pursuant to which the APTOnline account maintained by the petitioner with respondent No.6 has also been attached. 11. Foliowing such attachment of bank accounts, the regular day-to-day activity of the petitioner has come to a grinding halt. It is in such circumstances the present u,rit petition has been filed. L2. Respondent No.1 has filed counter-affidavit objecting to the prayer made by the petitioner. 13. On going through the impugned order of 4 i respondent No.1 dated 16.12.2021, we are of the view TIB,J & AVR,J wp -2942-2022 that the sai I order is devoid of reasons' Petitioner was required tc be heard, and there should be due application cf mind before a decision is taken on the prayer for rtay. Impugned order dated 16.L2.2O21 does not in, licate or disclose any application of mind on the par. of respondent No. 1 in considering the prayer of thr petitioner. 14. It is v ell settled that recording of re:asons is essential wh.le dealing rnith such prayers made by an ASSCSSEC, 15. In view of above, we set aside the order dated 16.12.2021 e nd remand the matter back to respondent No. 1 for tak ng a fresh decision within a period of thirty (30) dz ys from the date of receipt of a copy of this order ir accordance with law by affording an opportunity o'hearing to the petitioner. 16. Since w, have set aside the order of respondent i i t No.1 dated |C.12.2027, we direct respondent No.S and UB,J & AVR,J wp_2942-2022 respondent No.6 to withdraw the attachment of bank accounts and APIOnline account respectively of the petitioner forthwith. t7, We make it clear that we have not expressed any opinion on merit as well as on the prayer for stay. A1l contentions are kept open. 18. This disposes of the writ petition. No order as to costs. 19. As a sequel, miscellaneous applications pending if any in this Writ Petition, shall stand closed. 6 //TRUE COPY// SD/.PADMANABHA REDDY ASSISTANT REGISTRAR SECTION OFFICER To, 1. The lncome Tax Officer, Ward - B(1), Hyderabad, Signature Towers' Sy' N; \"6ii) ; \"K\"ftirpr r, -sv. No.. szt p l'ot (othag uda, o-pposite Botanical 6;r;'E;.,'s;;ili.s5;bJriv r,rlinoai Ransa Reidv Distiict' Hvderabad - 500 084. Telanqana. ih;'5;6'E;;[ of lndia, tr,4anikonda Branch,,D' No'2-30/1 ' lndra Nagar' Caifrooowti. Hyderabad, Telangana - 500 032 Xpio.rr\" ii#it,ed, Plot No- t, \"E part<, Jubilee Gardens, Cyberabad' Hvderabad -500 084, Telanqana. 6'.;\"bCi; Sni Av A. Stvn-KARrl KEYA, Advocate [oPUC] il; cc io snin.nAouA KRISHNA, Advocate IoPUC] Two C.D. CoPies, One Spare CoPY. IVRC BS 2. 4. 5. 6. 7. HIGH COURT DATED:25102 2022 ORDER WP.No.2942 rfi 2022 DISPOSING (IF THE WRIT PETITION WITHOUT CC STS ltrE SrAi€ llr r116.rrf-' .+ ,4 /,'n< o ,-o e aA o 0I MAB 202 z a L f. t V ;> "