AMBICA JEWELLERS vs. INCOME TAX OFFICER AND ANR

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W.P.(C)-9380/2020HC Delhi2020:DHC:341127 November 20202 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court noted that the Office Memorandums relied upon by the petitioner themselves provide an alternative effective remedy. Specifically, paragraph 4(C) of the Office Memorandum dated February 29, 2016, allows for a review petition to be filed before the jurisdictional Administrative Principal Commissioner of Income Tax / Commissioner of Income Tax. Consequently, the Court disposed of the writ petition, granting the petitioner liberty to avail this alternative remedy. The Court directed that if the petitioner files the review petition within two weeks, the Principal Commissioner of Income Tax should decide it in accordance with the law within four weeks thereafter. The Court did not decide on the merits of the petitioner's claim regarding the arbitrariness of the 20% deposit requirement.

What were the facts?

The petitioner, Ambica Jewellers, filed a writ petition before the Delhi High Court challenging an order dated February 5, 2020, passed by the Income Tax Officer (ITO). This order pertained to Assessment Year 2017-18 and rejected the petitioner's application for a stay of tax demand. The ITO had directed the petitioner to deposit 20% of the outstanding demand as a condition for staying the balance demand. The petitioner contended that this requirement was arbitrary and contrary to the Income Tax Act, 1961, citing Office Memorandums dated February 29, 2016, and July 31, 2017. The revenue was represented by the Income Tax Officer and another respondent.

What were the issues?

1. Whether the rejection of the petitioner's application for a stay of tax demand, requiring a deposit of 20% of the outstanding demand, is arbitrary and against the provisions of the Income Tax Act, 1961, particularly in light of the Office Memorandums dated February 29, 2016, and July 31, 2017? (Question of law and fact, concerning the interpretation and application of the Income Tax Act and administrative instructions). Assessee's Contention: The petitioner argued that the order requiring a 20% deposit to stay the demand was arbitrary and violated the Income Tax Act, 1961. They relied on Office Memorandum dated February 29, 2016, read with Office Memorandum dated July 31, 2017. Revenue's Contention: The judgment does not record any specific arguments made by the revenue.

AI-generated summary — verify with the full judgment below

W.P (C) No.9380/2020

Page 1 of 2

$~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P. (C) 9380/2020 & CM APPLs.30217-30218/2020

AMBICA JEWELLERS

..... Petitioner Through: Mr. Pankaj Garg, Advocate, Advocate with Mr. Milind Garg and Yaksh Garg, Advocates.

versus

INCOME TAX OFFICER AND ANR.

...... Respondents Through: Mr. Abhishek Maratha, Senior Standing Counsel, Advocate with Mr. Pratayash Gupta, Jr. Standing Counsel, Advocate

Date of Decision: 27th November, 2020

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SANJEEV NARULA

J U D G M E N T MANMOHAN, J 1. The petition has been heard by way of video conferencing. : (Oral) 2. Present writ petition has been filed challenging the order dated 05th 3. Learned counsel for petitioner states that the rejection of petitioner’s application for the stay of tax demand with a requirement to pay minimum 20%

February, 2020 pertaining to Assessment Year 2017-18, passed by respondent No.1 whereby the petitioner’s application seeking a stay of demand has been rejected and petitioner has been directed to deposit 20% of the outstanding demand as a condition to stay further demand. 2020:DHC:3411-DB

W.P (C) No.9380/2020

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of the outstanding demand so as to stay the balance demand is arbitrary and against the provisions of the Income Tax Act, 1961. In support of his submission, he relies on the Office Memorandum dated 29th February, 2016 read along with the Office Memorandum dated 31st 4. However, a perusal of the aforesaid Office Memorandums reveal that the petitioner has an alternative effective remedy by filing a review petition before the jurisdictional Administrative Principal Commissioner of Income Tax / Commissioner of Income Tax under para 4(C) of the Office Memorandum dated 29 July, 2017. th 5. Accordingly, the present writ petition and pending applications are disposed of with liberty to the petitioner to avail of the alternative effective remedy. February, 2016. 6. In the event, the petitioner files the review petition within two weeks, the Principal Commissioner, Income Tax, is directed to decide the same in accordance with law, within four weeks thereafter. 7. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

SANJEEV NARULA, J NOVEMBER 27, 2020 js

2020:DHC:3411-DB

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