Paradigm Corporation Private Limited vs Principal Chief Commissioner Of ...
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Telangana High Court

Paradigm Corporation Private Limited vs Principal Chief Commissioner Of ... on 11 August, 2025

     THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
                                 AND
             THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
                     Writ Petition No.23594 of 2025
Order:

         Heard Mr. Vikram Pooserla, learned Senior Counsel

appearing for Ms. K. Manasa, learned counsel for the petitioner

and Mr. K.Sudhakar Reddy, learned Senior Standing Counsel for

Income        Tax     Department           appearing    for     the

respondents/revenue.

2. For the assessment year 2022-2023, the petitioner-

company filed its return as NIL. Faceless assessment was

conducted under Section 143(3) read with Section 144B of the

Income Tax Act, 1961 (for short 'the 1961 Act') assessing the

total income of the petitioner as Rs.62,57,82,042/-. By order

dated 22.03.2024, a demand of Rs.60,48,85,080/- was raised.

The petitioner-company has filed an appeal before the National

Faceless Appeal Centre, Delhi, on 17.04.2024. Petitioner-

company has also filed a petition for stay of payment of demand

till disposal of the appeal before respondent No.2- Principal ::2::

Commissioner of Income Tax-IV (for short 'PCIT'), on

13.06.2024. The PCIT, by order dated 25.10.2024, permitted

payment of the impugned demand through instalments of Rs.5

crores per month starting from November, 2024, till disposal of

the first appeal, otherwise the petitioner-company would be

treated as an assessee in default. Petitioner approached the

Principal Chief Commissioner of Income Tax, Andhra Pradesh

and Telangana (for short 'PCCIT'), on 03.12.2024, seeking stay

of demand for the same assessment year. By the impugned

order dated 06.06.2025, such a prayer was refused as the

petitioner-company has failed to establish its financial stringency.

Petitioner, being aggrieved thereby, has approached this Court.

3. Petitioner is also seeking stay of recovery of the demand

through order dated 22.03.2024, passed under Section 156 of the

Act of 1961 by respondent No.3, as the appeal is still pending

before the National Faceless Appeal Center.

4. Learned counsel for the petitioner inter alia submitted that

the application for stay of demand categorically made out a case ::3::

of financial hardship. The bank statement of the petitioner was

also filed as annexure-3, which showed only balance of

Rs.71,17,436/- as on 05.11.2024. Learned counsel further

submits that the correspondence by the Additional/Joint

Commissioner of Income Tax, Administration, Hyderabad,

dated 27.02.2025, would show that the decision of the Local

High Pitched Scrutiny Assessments Committee is not

unequivocal as to whether the demand raised upon the

petitioner, on the basis of the reassessment, is 'Not High Pitched

Assessment'. He, however, submits that the communication

indicates that it is not a 'Not High Pitched Assessment'. Even

otherwise, as per the judgment rendered by Gujarat High Court

in Harsh Dipak Shah v. Union of India 1, in particular,

paragraph 32, the 'high pitched assessment' means where the

income determined and assessment was substantially higher than

the returned income. For example, twice the returned income or

more.

2022 SCC OnLine Gujarat 1679 ::4::

5. In the instant case, the income was assessed as Rs.60

crores against the return of NIL income. Definitely, it was a case

of high pitched scrutiny assessment. Even the bank statement of

the petitioner substantiated the grounds of financial stringency.

The revenue authorities have failed to apply their mind to the

grounds taken and rejected the prayer for stay even at the level of

PCCIT. The direction of the PCIT dated 25-10-2024 for deposit

of instalments @ Rs.5 crores per month starting from

November, 2024, till disposal of the first appeal has no meaning

so far as the prayer for stay of the impugned demand during

pendency of the appeal is concerned. Therefore, the petitioner

has approached this Court.

6. Learned counsel for the revenue submits that the

petitioner has failed to furnish other supporting documents such

as cash flow, financial statement and also the source of infusion

of funds to the petitioner-company, which has been the basis for

scrutiny assessment of such nature. Therefore, the impugned

order does not require any interference.

::5::

7. However, on being specifically asked as to the timeline

within which the appeal preferred by the petitioner is likely to be

disposed of, learned counsel for the revenue replied that he has

no instructions regarding any particular timeline.

8. Learned counsel for the petitioner submits that in view of

the stand taken by the revenue, petitioner is ready to furnish

other supporting documents to make out the case of financial

hardship such as the cash flow, financial statements and such

other documents.

9. In the wake of such submission, learned counsel for the

revenue submits that in case this Court is inclined to remand the

matter, the competent officer would, upon necessary documents

being submitted, reconsider the application of the petitioner for

stay of the demand in accordance with law.

10. We have considered the submissions of learned counsel

for the parties.

::6::

11. From the conspectus of facts and the relevant documents

taken into note, as borne out from the pleadings on record, it

appears that the communication dated 27.02.2025 on the issue

whether the scrutiny assessment undertaken against the

petitioner was a high-pitched assessment or not is not

unequivocal in its language as also quoted hereinabove. In a case

where assessee has presented the appeal, the assessing officer

may in his discretion and subject to such conditions, as he may

think fit, treat the assessee as not being in default in respect of

the amount in dispute of the appeal and subject him to payment

of the demand in instalments within a time prescribed. In the

present case, the petitioner has approached the PCIT and

subsequently, the PCCIT for stay of the impugned demand.

The order dated 25.10.2024 passed by the PCIT, thus, permitted

payment of the impugned demand through instalments @ Rs.5

crores per month starting from the month of November, 2024,

onwards till disposal of the first appeal. However, it appears that

the learned PCIT or the learned PCCIT have not specifically

dealt with the issue as regards the plea of financial hardship made ::7::

out by the petitioner. It appears that the petitioner is required to

submit further documents in the nature of cash flow and

financial statements etc., for the competent officer to take a

decision thereupon.

12. At this stage, therefore, without commenting upon the

merits of the plea raised by the petitioner, we are inclined to

direct the petitioner to approach the competent officer-

respondent No.1 with a fresh application together with

supporting documents and case laws for taking a decision on the

question of stay of payment of the demand raised upon him for

the assessment year 2022-2023 in terms of Section 143 r/w

Section 144B of the 1961 Act.

13. Needless to say, if such application is made by the

petitioner within a period of one week, respondent No.1 would

consider the same and take a decision thereon in accordance

with law within a period of four weeks therefrom.

::8::

14. Accordingly, the instant Writ Petition is disposed of. No

costs.

As a sequel, miscellaneous petitions, pending if any, stand

closed.

____________________________ APARESH KUMAR SINGH, CJ

___________________ G.M.MOHIUDDIN, J Date: 11.08.2025 LUR