M/s. Vashisti Consultancy and Developers Private Limited. V. Union of India

WP/4633/2020

AI Insights

The case involves Vashisti Consultancy and Developers Private Limited, which challenged the orders dated 10-02-2020 and 12-02-2020 issued by the Assistant Commissioner of Income Tax, Circle 17(2). These orders required the petitioner to deposit 20% of the disputed tax demand for the assessment year 2017-18, as per the assessment order dated 31-12-2019. The petitioner argued that these orders were arbitrary, illegal, and violated the principles of natural justice. The High Court had previously issued an interim stay on 03-03-2020. The court suggested that the petitioner should seek a stay on the demand from the Commissioner of Income Tax (Appeals), who has the authority to grant such a stay during the pendency of the appeal.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 743894 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 02-11-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Article 226 of the Constitution of India, Section 151 CPC
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NAMAVARAPU RAO; B SARMA
• Assessee Lawyers: M S R S ASSOCIATES
• Keywords: Arbitrary; Assessment Order; Illegal; Natural Justice; Stay of demand; Writ of Mandamus
• Section: 143(3); 226(3); 246(1A)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SECOND DAY OF NOVEIVBER TWO THOUSAND AND TWENTY ONE IV/s. Vashisti consultancy and Developers private Limited, having its registered office at ll\"l_Ng 2_s2, priya Residency, rr/edi'paily vilraseinJ Ci.am i5niiayZi,'iivJ\"irtro _ 501501, Ranga Reddv Distriat, Terangana, n6presented by its oir6cibr 6iisuresn Guttala, S/o. Narayana, ageo about ++ fJari, nt6lfvjeranao. AND ...PETIT|ONER PRESENT THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE DR. JUSTICE CHILLAKUR SUMALATHA Between: WRIT PETITION NO:4633 OF 2020 ,t P,l5Xg',131?; t1tst?l\",ll?l#lli ?iB6\"J?\", Department or Revenue, Ministry or 2. The Assistant commissioner of rncome Tax, circre 17(2), signature Towers, Sy. !o._0-(e), of Kondapur, Sy. No. 37(p) of Koth'aguda, Oppl'A;Enii;:r-c;il;;;: Serilingampaily (M), Rariga Reddy District, Hy:Oera'Uari,-feE;g;;; _SObtti+.' .,,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 or order especially in the nature of writ of mandamus declaring the impugned orders dated 10-02-2020 and 12-02-2020 passed by Respondent No.2 for the Assessmenl Year 2017-18 under the lncome Tax Act, 1961 asking the petitioner to pay 20 percentage of the disputed demand raised as per the order of assessment dated 31-12-2019 as being arbitrary, illegal the order itself having been passed in gross violation of principles of natural justice and consequenfly set aside the same. IANO: 1OF2 2 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 stay all further proceedings pursuant to the orders dated l0-02-2020 and 12-02-2020 passed by Respondent No.2 for the Assessment year 2017-19 under the lncome Tax Act, 1S61 . Counsel for the Petitioner: M/S. R.S. ASSOCIATES Counsel forthe Respondent No.1: SRI NAMAVARAPU RAJESHWAR RAO, ASSISTANT SOLICITOR GENERAL Counsel for the Respondent No.2: SRI B. NARASIMHA SARMA, SC FOR INCOME TAX DEPARTMENT The Court made the following: ORDER THE ON'BLE S IJUSTICE UJJAL BH YAN AND THE H ON'BLE D R. JUSTICE CHILLAK R SUMA LATHA w.P.N0.4633 0F 2020 O R D E R (Per the Hon'ble sri Jusllce ullol Bhuvon) Heord the leorned counsel oppeoring for M/s R.S. Associotes on beholf of lhe petitioner, Sri B.Norosimho Sormo, Ieorned Stonding Counsel for lncome Tox Deportment - respondent No.2, ond olso Sri Nomovoropu Rojeshwor Roo leorned Assistont Solicilor Generol of lndio for ltr respondenl. 2. Petltior^er is on income tox ossessee within the jurisdiclion of the respondent No.2. For lhe ossessmen'i yeor 201 /-l B, ossessment order doied 31 .l2.2Al? wos possed by 2nd respondenl under Seclion 143(3)of the lncome Tox Act, 1961 (briefly 'the Act' hereinofier), whereby ihe returned income of the petitioner wos increosed on occount of vorious oddilions, resulling in quontificolion of lox ot Rs.45,52,52,854.00 (Rupees forty five crores, fifty two lokhs, fifty two thousond, eight hundred ond fifty f our only). 3. lt is stoted thot oggrieved by lhe oforesoid order of ossessmenl, peiilioner hos preferred on oppeol before the Commissioner of lncome Tox (Appeols) under Seclion 2461A) ot the Act on 2B.Ol .2020. 4. t is further stoted thot oforesoid oppeol ls slill pending considerotion o1 the first oppellote outhorily ln the meonwhile, petiiioner filed on opplicolion for stoy before lhe 2nd respondent under Section 226131 of ihe Acl. By ihe impugned order doted 10.02.2020, respondeni No.2 gronled stoy subjeci to petiiioner depositing 20% of lhe demond by 13.02.2020, which dote wos exlended lo 18.02.2020. Aggrieved, present writ pelition hos been filed 6. By order doted 03.03.2020, this court hod issued notice ond gronled od inlerim stoy, /. Upon heoring leorned counsel for the poriies, we ore of ihe view thot since the oppeol of the petitioner is pending before the Commissioner of lncome Tox (Appeols), it would be oppropriote for ihe petitioner to file on opplicotion for stoy of demond before the soid outhorlty. 8. Needless io soy ihotthe low is well settled thot the firsi oppellole outhority i.e., the Commlssloner of lncome Tox (Appeols) hos the power lo decide such on opplicotion during pendency of the oppeol' ll hos been heldbylhecouris,thotpoweriogrontstoyisincidentolondonci|loryto the power to decide on oppeol. While heoring ond deciding on oppeol under Section 2461A) of the Acl, commissioner of lncome Tox (Appeols) exercises quosi judiciol powers, ond therefore' it would be in the inierest of jusiice if the first oppellote outhority considers such o proyer of the 5 petitioner, if mode. J 1. z, 9. Accordingly' ond in the lighi of the obove' we gront liberty to the petitioner to move on opplicotion f or stoy bef ore lhe iurisdlctionol Commissioner of lncome Tox (Appeols) 10. lf such on opplicotion is filed within o period of four weeks from todoy, the some sholl be considered on its own merits by the oppellote outhoritY in occordonce with low' I I . All conientions ore kePl oPen' 12. To focilitote the peiitioner to file such on opplicotion' we direct thot no coercive sreps shol be token by rhe 2no respondeni for o period of thirly doys from i':doY. 13. writ pelition is occordingly disposed of ' 14 lnterlocutory opplicotions pending' if ony' sholl stond closed No order os to costs. SD/-N.CHAND RA SEKHAR RAO To, J. 4. ( 6. 7. CHR ASSIST ANT REGIS //TRUE COPY' SECTION OFFICER I!\",-iBr\".L1hyI!ffi :i'\".:.fi:*:J::::H:.::::\"r,[,*,, I::&\"1::?ll\"??Til'.1'i\",i\"*\":,i;pl'bir