Rajasthan High Court - Jodhpur

Kunj Bihari Lal Agarwal vs Principal Commissioner Of Income ... on 1 May, 2023

Bench: Vijay Bishnoi, Yogendra Kumar Purohit

[2023/RJJD/013629]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 3776/2023

Kunj Bihari Lal Agarwal S/o Shri Ram Avtar Agarwal, Aged About 43 Years, R/o A-253, Shastri Nagar, Jodhpur (Rajasthan) 342003.

----Petitioner Versus

1. Principal Commissioner Of Income Tax (Central), Jaipur, Central Revenue Building, B.d. Road, Jaipur.

2. Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur, Room No. 133 Aayakar Bhawan Paota C Road, Jodhpur.

3. Assistant Commissioner Of Income Tax, Central Circle-2, Jodhpur, Aayakar Bhawan Paota C Road, Jodhpur.

                                                                    ----Respondents


For Petitioner(s)             :    Mr Sharad Kothari
For Respondent(s)             :    Mr K.K.Bissa



                HON'BLE MR. JUSTICE VIJAY BISHNOI

HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT

Judgment / Order

01/05/2023

1. This writ petition under Article 226 of the Constitution

of India is filed by the petitioner challenging the order dated

03.03.2023 passed by respondent No .1- PCIT, Jaipur, whereby

application filed by the petitioner seeking stay of recovery of

demand pertaining to assessment years 2014-15, 2016-17 and

2020-21 has been disposed of in the following manner:

"The petition is disposed off subject to following stipulation(s):-

1. The Outstanding aggregate demand of Rs.

25,12,77,982/- to be stayed till disposal of 1st

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appeal only upon payment of 20% of demand as per above schedule.

2. The applicant is directed to make payment as per the above schedule.

3. The assessee shall co-operate in early disposal of the appeal pending before the Ld. CIT(A).

4. Revenue retains the right to reconsider/review the payment plans/ stipulations as well as the stay order anytime in case of any exigency or administrative requirement or to safeguard the interests of revenue.

5. This order does not confer any legal right to the assessee. No finding or adjudication on assessee's pending matters can be inferred from this order. The assessee shall not act in any manner that may cause prejudice to interests of revenue. The assessee's contentions/assertions raised before the undersigned remain unsubstantiated.

6. Interest shall be payable by the taxpayer, as per law (irrespective of the stay or instalments granted).

7. The order is subject to stipulations as laid down in the CBDT office Memorandum F. No. 404/72/93- ITCC dated 29.02.2016 read with Instruction No.1914 dated 21.03.1996.

8. The assessing officer shall ensure/monitor the

payment of tax dues as above. "

2. Brief facts of the case are that a survey under Section

133A of the Income Tax Act, 1961 (hereinafter to be referred as

'the I.T. Act') was carried out at the premises of petitioner on

04.03.2020. On the basis of survey report, the assessments for

the years 2014-15 and 2016-17 were reopened by issuing notice

under Section 148 of the I.T. Act dated 24.03.2021 and

26.03.2021 respectively. Assessment for the year 2020-21 was

selected for scrutiny under Section 143(2) of the I.T. Act by

issuing notice dated 28.06.2021. The Assessing Authority

thereafter passed the assessment orders dated 07.03.2022 for the

[2023/RJJD/013629] (3 of 9) [CW-3776/2023]

assessment year 2014-15 and 2016-17 and the order dated

21.11.2022 for the assessment year 2020-21.

3. Aggrieved by the aforementioned assessment orders,

the petitioner preferred an appeal before the Appellate Authority

and the same is pending consideration.

4. It is to be noticed that against the original return for

the assessment year 2014-15 i.e. Rs.8,04,690/-, the Assessment

Officer assessed the income of the petitioner as Rs.1,22,93,066/-,

whereas against the original return for the assessment year 2016-

17 i.e. Rs.10,30,940/-, the Assessment Officer assessed the

income of the petitioner as Rs.1,64,73,499/-. It is also to be

noticed that for the assessment year 2020-21 against the original

return of Rs.2,19,09,920/-, the Assessment Officer assessed the

income of the petitioner as Rs.24,19,85,720/-. As such a demand

of more than Rs.25 crores has been raised against the petitioner.

5. As per the petitioner, the Appellate Authority is not

empowered to grant stay on recovery and, therefore, the

petitioner filed an application seeking stay on the said demand

before the Assessment Officer, however, the Assessment Officer

has not taken any decision on the stay application filed by the

petitioner, then he filed a stay application before the respondent

No.1 in terms of instruction No.1914 issued by the Income Tax

Department vide order dated 21.03.1996 as modified by office

memorandum dated 29.02.2016 and 31.07.2017.

6. It is also claimed by the petitioner that since the

demand raised by the revenue is high-pitch demand, the same is

[2023/RJJD/013629] (4 of 9) [CW-3776/2023]

required to be stayed till the disposal of the appeal by the

Appellate Authority.

7. It is averred in the petition that the respondent No.1

while passing the impugned order has failed to take into

consideration the prima facie case, balance of convenience and

irreparable injury and passed the impugned order in mechanical

manner without application of mind.

8. It is further contended that the impugned order is not

an speaking order and, therefore, the same is violative of

principles of natural justice. It is further contended that the

impugned order is contrary to the circulars and office

memorandum issued by the revenue department from time to

time.

9. Assailing the impugned order, Mr Sharad Kothari-

learned counsel for the petitioner has argued that the respondent

No.1 has simply quoted the contents of the stay applications that

too are reproduced selectively without any application of mind and

passed the impugned order.

10. It is further argued by the learned counsel for the

petitioner that though the circulars and office memorandum issued

by the respondent department from time to time guiding the

officers of the revenue to grant stay on demand subject to the

condition of depositing 20% of the assessed amount but the

authority being quasi-judicial in nature can always order for

depositing of a lesser amount than 20% of the demand.

[2023/RJJD/013629] (5 of 9) [CW-3776/2023]

11. In support of the above contentions, learned counsel

for the petitioner has placed reliance on decision of Hon'ble

Supreme Court rendered in Principal Commissioner of Income

Tax and Ors. vs. LG Electronics India (P) Ltd.,

MANU/SC0907/2018. He has also placed reliance on decisions

of Delhi High Court rendered in Dr. B.L.Kapur Memorial

Hospital vs. Commissioner of Income Tax (TDS) Delhi 1 &

Ors., W.P. (C) 16287/2022 decided on 25.11.2022;

Valvoline Cummins Ltd. vs. Deputy Commissioner of

Income Tax & Ors., MANU/DE/0801/2008; Soul vs. Deputy

Commissioner of Income Tax, MANU/DE/1504/2008;

Taneja Developers and Infrastructure Ltd. vs. Assistant

Commissioner of Income Tax and Ors.,

MANU/DE/0352/2009 and Charu Home Products (P.) Ltd.

vs. Commissioner of Income Tax-1, MANU/DE/4149/2014.

Learned counsel for the petitioner has also placed reliance on a

decision of Madras High Court rendered in Geetha Pharma vs.

Deputy Commissioner of Income Tax, Circle 1(1) and Ors.,

MANU/TN/3269/2020.

12. Learned counsel for the petitioner has, therefore,

prayed that the impugned order dated 03.03.2023 may kindly be

quashed and set aside and the respondents be directed not to

insist the petitioner to pay 20% of the demand raised till the

disposal of the appeal preferred by the petitioner against the

assessment orders dated 07.03.2022 and 21.11.2022 respectively.

[2023/RJJD/013629] (6 of 9) [CW-3776/2023]

13. Reply to the writ petition is filed on behalf of the

respondent, whereby the respondent has justified the impugned

order. It is mentioned in the reply that despite several notices

issued to the petitioner during the assessment process, he failed

to furnish satisfactory explanation and taking into consideration

overall facts and circumstances of the case, the Assessment

Officer passed the assessment orders for the assessment years

2014-15, 2016-17, 2020-21.

14. It is also contended that against the demand raised,

the petitioner has only deposited an amount of Rs.18,914/- till

date. It is further mentioned in the reply that the impugned order

passed by the respondent No.1 is perfectly in consonance with the

circulars and office memorandum issued by the respondent from

time to time dated 29.02.2016 and the amended instructions

issued on 31.07.2017.

15. Learned counsel Mr K.K.Bissa appearing for the

respondents has supported the impugned order and argued that in

the facts and circumstances of the case, no case for interference is

made out.

16. Heard learned counsel for the parties.

17. As observed earlier, the income of the petitioner as

assessed by the Assessment Officer is more than the return

income. It is also observed that the difference between the

assessed income and the return income is ranging from 11% to

15%. As per the circulars and office memorandum issued by the

respondent from time to time, particularly Instructions No.1914

[2023/RJJD/013629] (7 of 9) [CW-3776/2023]

dated 21.03.1996, 29.02.2016 and 31.07.2017, the demand

raised by the revenue falls within the definition of high-pitch

demand.

18. We have gone through the impugned order passed by

the respondent No.1. It is revealed from the impugned order that

the respondent No.1 quoted certain portions of the stay

application filed on behalf of the petitioner and also the

submissions filed on his behalf before it. After quoting certain

portions of the stay application and submissions, the respondent

No.1 has passed the impugned order without meeting out the

contentions raised on behalf of the petitioner regarding undue

hardships on account of his financial condition and the downfall in

the export industries.

19. From the reply filed on behalf of the revenue, it can be

gathered that respondent No.1 has completely followed the

instructions provided in the instructions/office memorandum dated

29.02.2016 and 31.07.2017.

20. Hon'ble Supreme Court in Principal Commissioner of

Income Tax and Ors. vs. LG Electronics India (P) Ltd.

(supra) has held as under:

"2. 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 not operate as a fetter on the CIT 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 per cent, pending appeal."

[2023/RJJD/013629] (8 of 9) [CW-3776/2023]

21. From the above, it is clear that the Hon'ble Supreme

Court has also ruled that administrative circulars issued by the

revenue department from time to time on the subject will not

operate as a fetter and the authority being a quasi-judicial

authority can always grant deposit order of lesser amount than

20%.

22. As observed earlier, from the perusal of the impugned

order, it can be gathered that the respondent No.1 is completely

guided by the administrative circulars issued by the revenue

department and has failed to give any finding about the hardships

pointed out by the petitioner and has also not taken into