M/s NSPIRA Management Services Private Limited V. The Deputy Commissioner/ Assistant Commissioner of Income Tax

WP/2452/2023

AI Insights

The case involves M/s NSPIRA Management Services Private Limited, which challenged an order from the Income Tax Department requiring them to pay 20% of a disputed tax demand for the assessment year 2018-19, pending the appeal's disposal. The petitioner argued that the order was arbitrary and lacked reasoning, thus violating natural justice. The respondents included various officials from the Income Tax Department. The court's decision emphasized the need for adherence to natural justice and proper procedural conduct in tax assessments.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 760769 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 31-01-2023
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax vs. LG Electronics India Pvt. Ltd.
• Laws Referred To: Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SAPNA REDDY
• Assessee Lawyers: A V A S M KARTIKEYA
• Keywords: Disputed Demand; Income Tax; Mandamus; Natural Justice; Stay of recovery
• Section: 151; 226; 220(6); 246.4

Judgement Text

"t 3311 I HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE THIRTY FIRST 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: 2452 OF 2023 Between: M/s NSPIRA Management Servrces Private Limited, 1oth Floor, Melange Towers, Pathrika Nagar, Madhapur, Hyderabad - 500 081, Telangana Represented by its Managing Director, Mr. K Puneeth, S/o Mr. Bipin Gopalakrishna. ...PETITiONER AND 1. The Deputy Commissioner/ Assrstant Commissioner of lncome Tax, , Circle 5('1), Room No. 344, 3rd Floor. I T Towers, AC Guards, Masab Tank, Hyderabad - 5O0 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 the Constrtution 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 Drrection, one, more particularly in the nature of Mandamus declaring the order of the 1 st Respondent, dated '16.12.2022, vide DlN. ITBA/COM|F|17|2022- 23t1048O62826(1), directing the Petitioner to pay 20percent of the disputed demand, pendrng disposal of the appeal of the Petitioner before the 1st Appellate Authority, for the Assessment Year 2018 - 19, 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 Petitioner's appeal before the 1st Appellate Authority, in the interests of justice i I I ! I I l I i ! t I i i i |.A.NO:1 OF 2023 Petition Un jer Section 151 CPC praying that in the c rcumr;tances stated in the affidavit fil€ d in support of the petition, the High Cour: nray be pleased to grant stay of all ft rther proceedings, including any recovery, l)ondrng disposal of the above writ pet tion. Counsel for the P )titioner : SRI.A.V.A.SM KARTTKEYA Counsel for the R )spondents : Ms.SAPNA REODY, ADV FOlt t;Rt.J.V.PRASAD (Sr. SC FOR INCOME rAx) The Court made t re following ORDER I Icard Mr. , . '.. .Sir,a l!lrtikcr rr, lcerncd c()unscl [rrr rhe pctili()ncr ar-rcl 1s. Sapna llcdrlr, lcrrncd counscI reprcscnting THE HON'BLETHE CHIEF USTICE UIIAL BHUYAN AND THE HON'BLE SRI IUSTICE N.TUKARAMII W.P.No.2452 of 2023 O.-RQLI.R, i/,\", r, Ilon'ble rlr (./,ut .lt,rt,L t .iti lli,rl rr l NIr..f .V.Prasad, lcarncd Standing (.ounscl, Incomc l ax Deparrment frrr thc respondcnts (-onstitution of India assailing lcselirr tnd validin, of the ordcr J.t tcd 16.12.2022 passcd bv rcsporrrle nr o.1 frrr rhe asscssnrernt vcar 2018 19. 2. 'l'his pctitt>n has becn filccl r.rnclcr .lrticle 226 oi thc 3. Pet-itioner is an asscsscc untlcr rhr lncon-rc 'l'ax AcL, 19(rl (bricfly 'the : ct' hercinaftcr) h:n irrq rhc sr:1rLrs ()l a cornpanr,. Iirr thc asse ssment ycar 20113 19, pctirioncl h:Ld sr-rbmittccl rcturn <>F utc()lrtc on 23.10.201U dcc]:rrrnr' ,.lccrncd r()r1rl rncomc of Its.1,17,17,.{(),9+2.0(1. '['hc cl:t u:r: >r']r'crcd ior lir-nrtccl scrulinv rr.i-tct'caFtcr, thc asscssmcut ( )r'(lcr rr: p:rsscd ()n 21.01.2021 t hcrcbv and u,hcrcur'rdcr tot:Ll lr:s( 5sccl 1nc( )nlc '11s quandficd ar ) Its.1.56,93,33:105.00. Pcuuoner has filcd appo.l elatnst thc aft>rcsaicl ord :r o1- assessment bclorc thc ComLrissior'cr , )i [.c, )rlc 'l ax (. ppeals untler Sccdon 2464 of the i ct, *,hich ['lowever, in respect of asscssmcrr: i car ]() I E 19, pc ncltrru 1. [;ollorv n1; lhe assessmcnt order, notlcc ()f ard of Drrect '['axcs (brieflv '(]BI) t' hcrcinafter) crcrcisc ()f p()wer. Yhcn tlrc Incomc 'l:rx :ruthorin cxcrciscs tlrrcd 31.07.2017 to thc cflcct that rvhcrc outstrlrrdins dcmand is disputcd bc[crre the appcllatc authorin,, fhc asscsscc has t<., pav 2070 of the disputed demand. Accordingly, pctitioncr has bccn drrected o pat 20oh of thc ourstanding de mand 6. We are afraid rcspondent No.1 did nor rpph his mrnd while passing chc ordcr dated 1,6.1,2.2022. It appcurs ro bc fl mcchanical furisdicuon under Sect-ion 220(6) of thc - cr, hc cscrctscs quast- iudicial powcrs. While exercising tlursi itrtlici:tl pos'crs, the authoritv is not bound or confined bv dcprrnttcrtt;ll lrr:tructr()ns 'this position has been well se trlcd br rhc :Lrprcrnc (-ourt in { Principal Commissioner of Income Tax r'. LG Electronics India Pvt. Ltd.l 2attcr back to rcspondcnt Ntt.1 tirr J)xssrrlg rt ti'csh t,rdcr 8 'l'hat being the position, c :cr :rsiclc' thc ordcr cletccl 16.12.2022 passcd bt' rcsporrdcrrt r,. I :trttl rcmltncl thc {2O rrJ) r 2 rTR-OL 334 (SC) tn 4 xcc( )r.darrcc r irh [ari aftcr givrnu clr,rc opportur.riti r l rcarirrt, r, rlrt PCtnioncr'. hLs shall lrc donc u,itltin a pcrirrd ol :;t lr-onr rhc clar:,rf rcccipt oIa copy ()f this ordcr. litL th.. liirr.cs:rirl .( )6) .r .t k,. pcriocl ()t sl i c( )crcr '(' stc rs lirr rcalizrng thc outstandirrg clt,n.an,1 for rlrc ilsscs rcnt i r ;rr. 2018 19 () nr I)r I 1on is acc()rdingh allt>wcd. [[<,rvt:r,cr. thcrcr shrrll lrt rt() ()fLlcr its t( c()StS . a s,'gLrcl, r-r-risccllancous pctillons, pcndlna if ,rnr. srrntl c loscr l (06) rvcel