Dr. Subodh Varshney vs. Appealsi Ayakar Bhawan Hoshangabad Road Bhopal Commissioner Of Income Tax

WP/1051/2014HC Madhya Pradesh22 April 2014Bench: HON'BLE SHRI JUSTICE RAJENDRA MENON3 pages

For Petitioner: Abhishek Oswal

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the prayer for quashing the assessment order cannot be accepted in the writ petition, as an appeal against the order is pending before the appellate authority, and further appeal rights exist. Therefore, the question of quashing the assessment order under Article 226 does not arise. Regarding the prayer for a mandamus to decide the stay application, the Court found it to be rendered infructuous in light of the interim order passed by the appellate authority on February 17, 2014. The Court noted that no further interim order could be passed in the writ petition unless the interim order of the appellate authority was specifically challenged. However, considering that the appeal had been pending for about a year, the interest of justice required its early hearing. Accordingly, the appellate authority was directed to decide the appeal preferably within two months from the date of receipt of a certified copy of the order. The writ petition was disposed of with these observations.

What were the facts?

The petitioner, Shri Abhishek Oswal, filed a writ petition under Article 226 of the Constitution challenging an assessment order passed by the Assessing Officer for an unspecified assessment year. The petitioner's primary grievance was the delay in the disposal of his appeal before the Commissioner of Income Tax (Appeals) and the pending application for interim relief. The petitioner sought to quash the assessment order or to direct the appellate authority to pass an order on the stay application or decide the appeal expeditiously. The respondents produced an order dated February 17, 2014, passed by the appellate authority, which directed the Assessing Officer not to recover 50% of the demand until the disposal of the first appeal and allowed the assessee to deposit the remaining 50% in 10 equal installments.

What were the issues?

1. Whether the writ petition under Article 226 of the Constitution is maintainable to quash an assessment order when an appeal against it is pending before the Commissioner of Income Tax (Appeals)? (Question of law) 2. Whether the prayer for a mandamus to decide the application for stay is infructuous in light of the interim order passed by the appellate authority? (Question of mixed law and fact) 3. Whether further interim relief can be granted by the High Court in the writ petition, given the interim order passed by the appellate authority? Assessee's Contentions: - The appellate authority is delaying the matter without just cause or reason. - The interim order passed by the appellate authority after the filing of the writ petition is a device to frustrate the petitioner's claim. - There should be a complete stay on recovery in light of the prima facie case of the petitioner. Revenue's Contentions: - The appellate authority has passed an order on the stay application, rendering the writ petition infructuous. - The interim order dated February 17, 2014, has been passed by the appellate authority.

Which sections of the Income-tax Act were involved?

Article 226

AI-generated summary — verify with the full judgment below

1 W. P. No. 1051/14 22/04/14 Shri Abhishek Oswal, learned counsel with Smt. Uma Parashar, learned counsel for the petitioner. Shri Sanjay Lal, learned counsel for the respondents. Petitioner has filed this writ petition under Article 226 of the Constitution challenging the assessment order passed by the respondent no. 2 the Assessing Officer. However, records indicate that for the assessment year in question and against the assessment order, an appeal is pending before the Commissioner of Income Tax (Appeals) and, therefore, the main grievance in the appeal seems to be that the appeal is pending since more than a year and the application for interim relief is also filed but till date neither is the appeal being heard nor is any order being passed on the prayer for interim relief. Accordingly, the main prayer made in the writ petition is to quash the assessment order or to issue a mandamus to the respondent no. 1 to pass an appropriate order on the application for stay Annexure P-7 or an alternative to decide the appeal expeditiously. Shri Oswal tried to emphasize that the appellate authority without any just cause or reason is delaying the matter. Shri Sanjay Lal appearing for the respondents produces today an order dated 17.02.14 passed by the appellate authority deciding the application for stay Annexure P-7 and it is pointed out that the appellate authority on the application for stay has issued the following direction :- 8. Considering

the

facts

and 2 circumstances of the case and taking a further lenient view, the A. O. is directed that no action for recovery of 50 % of the demand may be taken till the disposal of first appeal and the assessee is hereby directed to deposit the balance 50 % of the outstanding demand in 10 equal installments of Rs. 7,15,102/- each starting from February, 2014 and submit a copy of challan of the installment deposited by 25th day of each month before the Assessing Officer. 9. Accordingly,

with

the

above observations, the application of the assessee for stay of demand is disposed of. Accordingly, Shri Lal submits that now this petition is rendered infructuous. Shri Oswal refutes the aforesaid and submits that in the light of the prima facie case of the petitioner, there should be a complete stay with regard to the recovery and as the order of stay was passed by the appellate authority after filing of this petition and the interim order passed on 17.02.14, the same is nothing but a device to frustrate the claim of the petitioner being canvassed in this petition. We have considered the rival contentions and it is clear that the prayer of the petitioner for quashing the order dated 25.03.13 Annexure P-1 cannot be accepted in this petition as an appeal against the said order is pending consideration before the appellate authority and after the appeal is decided, petitioner has a further right of appeal to 3 the Appellate Tribunal. Accordingly, the question of quashing of the assessment order in these proceedings under Article 226 of the Constitution does not arises. As far as the mandamus for directing the respondent no. 1 namely the appellate authority to decide the application for stay is concerned in the light of the order already passed by the appellate authority on 17.02.14, this prayer is now rendered infructuous. The appellate authority having passed an order of stay and granted certain benefit as is reproduced hereinabove, now no further interim order can be passed in this petition until and unless specific challenge is made to this interim order passed on 17th February, 2014. That apart, as the appeal is pending for about an year now interest of justice requires early hearing of this appeal. The appellate authority is directed to decide the appeal preferably within a period of two months from the date of receipt of certified copy of this order. With the aforesaid, finding no further indulgence to be made in the matter, this petition is disposed of. (Rajendra Menon)

(Anil Sharma) J U D G E J U D G E Vy*

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