null V. Income Tax Department

WP/24623/2022

AI Insights

The case involves a writ petition filed by the petitioner challenging the demand for payment of Rs.1,52,65,795 for the Assessment Year 2015-16 during the pendency of the First Appeal. The petitioner argued that the demand and the subsequent issue letter were issued without following due procedure, violating the Income Tax Act, 1961, and principles of natural justice. The court considered the arguments and the relevant CBDT Circular which allows for a stay on the collection of disputed demands pending appeal, subject to certain conditions. The court referenced a Supreme Court decision which clarified that authorities could grant stays on deposit of a lesser amount than 20% of the disputed demand, depending on the specifics of the case.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 674113 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 18-08-2022
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax 5 and Ors. vs. M/s.LG Electronics India Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961, Article 14 of the Constitution of India
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: M
• Assessee Lawyers: DAMMALAPATI
• Keywords: Assessment Order; Income Tax; Interlocutory Application; Natural Justice; Stay of collection; Writ of Mandamus
• Section: 147

Judgement Text

"THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE T.MALLIKARJUNA RAO WRIT PETITION No.24623 OF 2022 ORDER: (Per Hon’ble Sri Justice C.Praveen Kumar) The present writ petition came to be filed for the following relief: “…..to issue order, writ or direction more particularly one in the nature of Writ of Mandamus, declaring the action of the respondents in demanding payment of Rs.1,52,65,795/- from the petitioner for the AY 2015-16, in pursuance of the Assessment Order bearing DIN No.ITBA/AST/S/147/2021- 22/1036067953 (1) dated 30.09.2021 during the pendency of the First Appeal for the same and consequently declare the issue letter dated 12.07.2022 bearing DIS and letter No.ITBA/RCV/F/17/2022-23/1043807284(1) (“Impugned Issue Letter”) issued without following due procedure as contemplated under the provisions of the Income Tax Act, 1961, as being void, illegal, arbitrary, without authority of law, violative of Article 14 of the Constitution of India and violative of principles of natural justice and also violative of provisions of Income Tax Act, 1961 and consequently set aside the same .…” Heard Sri Dammalapati Srinivas, learned Senior Counsel appearing for the Petitioner and Smt. M.Kiranmai, learned Standing Counsel for Income Tax. Though various grounds are raised in the writ petition, but when the matter is taken up for hearing, the learned senior counsel appearing for the Petitioner mainly urged this Court to issue necessary directions to the 5th Respondent to pass an interim order in the interlocutory application filed in the appeal and which is pending adjudication. He has drawn the attention of this Court to the letter DIN & No.ITBA/RCV/F/17/2022-23/ 1043807284(1), dt.12.07.2022, wherein the petitioner was requested to pay the outstanding demand immediately. Further, for assessment year 2015-16 and 2016-17, since the stay period for recovery of demand has expired, the petitioner was directed to pay 20% of the disputed demand, so that the authority may consider grant of stay of collection of the balance disputed demand till the disposal of the first appeal, as per the CBDT Circular No.1914 read with OM in F.No.404/72/93-ITCC dt.31.07.2017. Smt.M.Kiranmai, learned standing counsel appearing for the Income Tax submits that in view of the orders passed by the Apex Court in Principal Commissioner of Income Tax 5 and Ors., vs. M/s.LG Electronics India Pvt. Ltd.,1 it is left open to the authorities, on the facts of individual cases, to grant stay on deposit of a lesser amount than 20%, pending appeal. In order to consider the request made by the petitioner, it will be appropriate for us to extract the order passed by the Apex Court in Principal Commissioner of Income Tax 5 and Ors. referred to supra, which reads as under: “Having heard Shri Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving credence to the fact that he has argued before us that the administrative Circular will 1 Civil Appeal No.6850 of 2018 decided on 20.07.2018 not operate as a fetter on the Commissioner since it is a quasi judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal.” Having regard to the orders passed by the Apex Court referred above, the present writ petition is disposed of directing the 5th Respondent, before whom the appeal is pending, to consider the interlocutory application filed along with the Appeal, in accordance with the law laid down by the Apex Court. There shall be no order as to costs. Miscellaneous Petitions, if any, pending in this writ petition shall stand closed. ________________________ JUSTICE C.PRAVEEN KUMAR ___________________________ JUSTICE T.MALLIKARJUNA RAO Date: 18.08.2022 BV THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE T.MALLIKARJUNA RAO WRIT PETITION No.24623 OF 2022 18.08.2022 BV "