Madras High Court
Mr.Hussain Maideen Ebrahim Sha vs The Assistant Commissioner Of Income ... on 7 August, 2024
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
W.P.No.22716 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 07.08.2024
Coram
The Honourable Mr.Justice Krishnan Ramasamy
W.P.No.22716 of 2024
and
W.M.P.Nos.24740 & 24742 of 2024
Mr.Hussain Maideen Ebrahim Sha ...Petitioner
Vs.
1. The Assistant Commissioner of Income Tax,
Non-Corporate Circle 7 (1), Chennai,
Room No.608, Wanaparthy Block, VI Floor,
No.121, Mahatma Gandhi Road,
Nungambakkam, Chennai - 600 034.
2. Commissioner of Income Tax (Appeals)
National Faceless Appeal Centre, Delhi. ...Respondents
Prayer
Writ Petition filed under Article 226 of the Constitution of India
praying for the issuance of a Writ of Certiorarified Mandamus to call for
records from the file of the first respondent PAN:AAFP19651L and to
quash the impugned order in ITBA/COM/F/17/2024-25/1066423253(1)
dated 04.07.2024 for the AY 2018-19 passed by the first respondent as
illegal and consequently, to direct the first respondent to grant stay of
recovery of demand for AY 2018-19 pending disposal of the appeal
preferred by the petitioner before the second respondent.
For Petitioners : Mr.R.Sivaraman
For Respondents : Mr.B.Ramana Kumar,
Senior Standing Counsel
assisted by
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Mr.D.Prabhu Mukunth Arun Kumar
Junior Standing Counsel
Order
Heard Mr.R.Sivaraman, learned counsel appearing for the
petitioner and Mr.B.Ramana Kumar, learned Senior Standing Counsel, who
takes notice on behalf of the respondents. With consent, the main Writ
Petition is taken up for final disposal at the stage of admission itself.
2. The challenge in this Writ Petition is to the order passed by the
first respondent dated 04.07.2024 and to quash the same, consequently, to
direct the first respondent to stay the recovery proceedings pending disposal
of the Appeal filed by the petitioner before the second respondent.
3. The facts, which led to the filing of this Writ Petition are as
follows:-
i) The petitioner is an individual assessee on the files of the
respondent-Department. The petitioner had filed return of income for the
AY 2018-19 on 31.03.2019, that the petitioner's case was selected for
scrutiny and an assessment order was passed by the first respondent vide
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order dated 08.04.2021, assessing the petitioner's income at
Rs.12,84,74,810/- and unexplained investment to the tune of
Rs.11,77,00,000/-. Against the said assessment, the petitioner preferred an
Appeal before the Commissioner of Income Tax (Appeals), National
Faceless Appeal Centre, second respondent, and pending the Appeal, the
petitioner filed a Petition for Stay before the first respondent. In the
meantime, the petitioner, due to oversight, has failed to respond to the email
proceedings of the second respondent, the second respondent passed an ex
parte order on 06.03.2024. Challenging the said ex parte order, the petitioner
preferred Appeal before the Income Tax Appellate Tribunal and the ITAT
vide judgment dated 31.05.2024 has remanded the matter back to the file of
the second respondent.
ii) Thereafter, the petitioner sent a letter dated 18.06.2024 to the first
respondent along with the copy of the order passed by the Tribunal and
requested for stay of the demand and to lift the bank attachments and
subsequently, filed a Petition for Stay, however, the first respondent, rejected
the stay petition vide the impugned order dated 04.07.2024, and directed the
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petitioner to pay the purported mandatory 20% of the disputed demand as
per the Office Memorandum in F.No.404/72/93/1TSC dated 31.07.2017,
issued by the Central Board of Direct Taxes. Challenging the said order
dated 04.07.2024, the petitioner has filed the present Writ Petition.
4. Mr.R.Sivaraman, learned counsel for the petitioner would submit
that pursuant to the judgment passed by the ITAT, whereby, the Appeal
preferred by the petitioner against the order of assessment passed by the first
respondent was remitted back to the second respondent for further
consideration, the petitioner sent a letter to the first respondent requesting for
stay of the demand raised against the petitioner and to lift the bank
attachments, however, the first respondent, without even considering the
financial stringencies faced by the petitioner, directed the petitioner to pay a
sum of Rs.35,00,000/- in 18 equal installments, to which proposal, the
petitioner was not agreeable and passed the present impugned order,
directing the petitioner to pay 20% of the disputed demand as per CBDT'S
circular dated 31.07.2017. Therefore, the learned counsel contended that the
impugned order is liable to be quashd as the first respondent has
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mechanically passed a non-speaking order without even considering any of
the submissions and judgment placed on record by the petitioner during the
course of hearing. The learned counsel also contended that the impugned
order is not sustainable even on the ground of violation of principles of
natural justice, as the petitioner has not been heard before passing the
impugned order.
5. Mr.B.Ramana Kumar, learned Senior Standing Counsel for
respondents would submit that though by virtue of second appeal preferred
before ITAT, the matter was remittd back to the second respondent, as pe
CBDT's circular, the petitioner-assessee is supposed to pay at least 20% of
the demand raised, hence, the petitioner was asked t pay 20% of the disputed
demand in 18 equal monthly installments, since the petitioner refused to
agree to this offer, the first respondent is constrained to reject the petitioner's
request for stay of the demand and lift the bank attachments, and rejected the
Stay Petition filed by the petitioner and the same cannot be found fault with.
Further, the learned Senior Standing Counsel would contend that before
passing the impugned order of rejection of the Stay Petition, the petitioner
has been heard on two occasions, i.e.. on 24.06.2024 and 03.07.2024,
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therefore, i it is not open to the petitioner to contend that no opportuniy was
granted before passing the impugnd order. Thus, by averring so, the learned
Senior Standing Counsel prayed for dismissal of the Writ Petition.
6. In reply, the learned counsel for the petitioner would submit that
challenging the assessment order datead 08.04.2021, the petitioner preferred
an Appeal before the second respondent, and till the Appeal is heard and
disposed of, all proceedings pursuant to the impugned order may be
deferred. and the learned counsel also sought for a direction on the second
respondent for earlier disposal of the Appeal.
7. I have given due considerations to the submissions made on either
side and perused the materials available on record.
8. Admittedly, challenging the assessment order passed by the first
respondent, Appeal is pending for consideration before the second
respondent. Further, it is seen that recovery proceedings initiated against the
petitioner is only due to dismissal of the Appeal by the second respondent,
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which order, was in fact, an ex parte order passed by the second respondent,
however, by virtue of order passed by ITAT, the Appeal preferred by the
petitioner against the assessment order was rejuvenated, since it was an ex
parte order.
9. Thus, taking into consideration of the above narrated facts and
circumstances of the case, and the fact that the petitioner undertaken before
the ITAT that they would prosecute the case before the second respondent,
by virtue of which, the Appeal filed by the petitioner was allowed, this
Court, in the interest of justice, is inclined to pass the following order:-
i) The second respondent is directed to dispose of the Appeal filed
by the petitioner within six weeks from the date of receipt of a certified order
copy by the second respondent.
ii) Till the disposal of the Appeal, the petitioner shall not be put to
any harassment by the firsts respondent in pursuance of the impugned order.
10. In the result, the Writ Petition is allowed. No costs.
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Consequently, connected Miscellaneous Petitions are closed.
07.08.2024
sd
Index : yes/no
Neutral Citation : yes/no
To
1. The Assistant Commissioner of Income Tax,
Non-Corporate Circle 7 (1), Chennai,
Room No.608, Wanaparthy Block, VI Floor,
No.121, Mahatma Gandhi Road,
Nungambakkam, Chennai - 600 034.
2. Commissioner of Income Tax (Appeals)
National Faceless Appeal Centre, Delhi.
Krishnan Ramasamy,J.,
sd
https://www.mhc.tn.gov.in/judis
07.08.2024
https://www.mhc.tn.gov.in/judis
