M/s. Zoos and Parks Authority of Telangana V. The Commissioner of Income Tax (Exemptions) and another

WP/3699/2023

AI Insights

The case involves the Zoos and Parks Authority of Telangana, which challenged an order from the Income Tax Department requiring a 20% payment of a disputed tax demand as a condition for staying the demand. The total tax demand for the assessment years 2016-17 to 2021-22 amounted to Rs. 41,38,07,520. The petitioner argued that the order was illegal and arbitrary, citing it was against the provisions of the Income Tax Act and CBDT Circulars. The High Court found that the tax authority had not properly exercised its quasi-judicial powers and remanded the case for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 753045 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 09-02-2023
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax Vs. Iffs.L.G, Electronics India Private Limited
• Laws Referred To: Income Tax Act, 1961, Central Board of Direct Taxes Circulars
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SAPNA REDDY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Assessment years; Income Tax; Quasi-judicial power; Stay of demand; Writ of Mandamus
• Section: 143(3); 143(1)(a); 220(6)

Judgement Text

"[ 3311 I THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) THURSDAY,THE NINTH DAY OF FEBRUARY N/VO THOUSAND AND n/VENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI Counsel for the Petitioner: MR. A. V. RAGHU RAM counsel for the Respondents: MS. SAPNA REDDY FoR MS. K MAMATHA CHOUDARY, SR. SC The Court made the following: ORDER Between: M/s. Zoos and Parks Autho-rity^ of _Telangana, Nehru Zoological park, Bahadurpura, Hyderabad - 5090q, Tetangina Rep., ov itJ iuiitor, Sri Shakkari Rajashekar, S/o. Late Sri Kishtaiah.\" AND ...PETITIONER 1- The Commissioner of lncome Tax.(Exemptions), 2nd Floor Annexe, Aayakar Bhavan, Basheerbaqh, Hyderabad'-5000b4. 2. The Assistant Commissioher of lncome-Tax (Exemptions), 2nd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad- 500004.' Petition under Articre 226 or the constitution of rndia ,;#t\"?T],'f il: circumstances stated in the affidavit filed therewith, the High-Court may be Oleased to pass an order or direction, especially one in the niture of WRIT OF MANDAMUS holding that the order of the 1st Respondent dated O210212023 with DIN and Letter No.lTBA/COMlFl17l2O22-23t1049368260(1) granting stay of demand subject to payment of zo percent of the total dJmand of Rs.41,38,07,520 for the assessment years 2016 -12 to 2021 -22 by 10th February 2023 as being illegal, arbitrary and against the provisions of the Act and CBDT Circular and set aside the same, and consequently direct the Respondents not to insist for payment of . disputed demands raised for assessment years 2016- 17 to 2021-22fl|the disposal of first appeals filed for respect asst. years. lA NO: 1 OF 2023 petition trnOer 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 the collection of disputed taxes of Rs.41,38,07.520 quantified as payable for the assessment years 2016-17 to 2A21-22. THE HON'BLE THE CHIEF JUSTICE UJJAL BHTryAN AND THE HON'BLE SRI JUSTIqE I[.TqI(4B4I1I[.'I Writ Petition No. 3699--ef202g ORDER: Per the llon'ble the Chief Justice Ujjal Bhugan) Heard Mr.A.V.Raghu Ram, learned counsel for the petitioner and Ms.Sapna Reddy, learned counsel representing Ms.K.Mamatha choudary, learned senior stand.ing counsel for the respondents. 2. By filing this petition under Article 226 of the Constitution of India, petitioner has assailed legality and validity of the ord.er dated O2.O2.2O23 passed by the first respondent. 3. Petitioner i.e., Zoos and Parks Authority of Telangana.is an assessee under the Income Tax Act, 1961 (briefly ,the Act' hereinafter). For the assessment years 2OL6 - LT to 2O2L - 22, petitioner is required to pay a total amount of Rs.41,38,07,520.00 on account of income tax etc. The details of outstanding dues are as under: $ ) S.No Asst.year Amount demand Rs. of Nature demand of 1 2016-L7 6,41,61,420 1a3(1)(a) 2 2017 -L8 21,67 ,770 143(3) 3 2018-L9 7,8O,46,L50 7,72,16,42O 1a3(1)(a) 4 2019-20 1a3(1)(a) 5 2020-2L 13,39,1L,28O 1a3(1)(a) 6 2021-22 5,83,04,480 1a3(1)(a) Total demand 4lr38,O7,S2O I 4. Against each of the assessment order, petitioner has preferred appeals before the First Appellate Authority. The appeals are pending. In the meanwhile, petitioner filed applications und.er Sectio n 220(61 of the Act for stay of demand. 5. By a common order dated O2.O2.2O23, first respondent granted stay subject to payment of 2Oo/o of the total demand by 10.02.2023 in terms of Central Board of Direct Taxes (CBDT) Circulars dated 29.02.2016 and 3L.O7.2017.It has been clarified that if the above payment is not made within the prescribed period., the stay order would automatically stand vacated, where after department 1 J I * /ould initiate necessary proceedings for recovery of the demand 6' From a perusar of the impugned order dated o2.o2.2o23, we are of the view that first respondent had merely followed the circulars of the GBDT and on the basis thereof has directed the petitioner to pay 20% of the demand as a pre-condition for stay of demand. 7. rt is trite law that when an income tax authority exercises jurisdiction under section 220(6) of the Act, he exercises quasi judicial power. while exercising quast judicial powers, the authority is not bound or confined by departmental instructions. He has to appry his mind which must be reflected in the order. This position has been clarified by the supreme court in t].e case of principal Commissloner of Income Tqx Vs. Iffs.L.G, Dlectronlcs India Priaate Ltmited in ctuit Appear No.6gso of 2org. B' That being the position, we set aside the order dated o2.o2-2o23 and, remand the matter back to the file of the first respondent for passing fresh order(s) in # t i I ! b-d accordance with raw after giving due opportunity of hearing 4 to the petitioner. This shall be done within a period of six (6) weeks from the date of receipt of copy of this order. Till the aforesaid period of six (6) weeks, respondents are directed not to take any coercive steps against the petitioner for realising the outstanding demand for the assessment years 2016 - L7 to 2O2L - 22. 9. Writ petition is allowed accordingly. Miscellaneous applications pending, if dfly, shall stand closed. However, there shall be no order as to costs. //TRUE COPYII SD/.N.CHANDRA SEKHAR RAO ASSISTANT REGISTRAR ER t :t I S To, 1. The commissioner of lncome Tax.(E:e_mptions), 2nd Floor Annexe, Aayakar Bhavan, Basheerbagh, Hyderabad'-500004. 2. The Assistant Commissioner of Incoqe_lqx (Exemptions), 2nd Floor, Aayakar Bhavan, Basheerbagh, Hyderabad- 500004.' 3. M/s. Zoos'and Parks Authority of _Telangana, Nehru Zoological park, Qph3.dur.pgrg, Hyderabad - s09064, Telangzna. Rep., by its iurator, -Sri Shakkari Rajashekar, S/o. Late Sri Kishtaiah. 4. One CC to MR. A.V. RAGHL, RAM Advocate IOPUCI 5. One CC MS. K. MAMATHA CHOUDARY, SR. SC ,Advocate[OpUC] 6. Two CD Copies EDS r es 4r I, I HIGH COURT DATED i0910212023 ORDER WP.No.3699 of 2023 Y'i ; r..-,; { ?0?3 t' i' U 2$ U[n ,i' '.'c ALLOWING THE WRIT PETITION WIHTOUT COSTS M ^w I "