M/S Sheetal Nath Colonizers Through Its Partner Shri Kamal Kumar Jain vs. The Principal Chief Commissioner Of Income Tax

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE JUSTICE SUJOY PAUL & JUSTICE ACHAL KUMAR PALIWAL ON THE 24th OF JULY, 2023 WRIT PETITION No. 17499 of 2023 BETWEEN:- M/S SHEETAL NATH COLONIZERS, PLOT NO 48, NEAR ARERA BHAWAN, MP NAGAR, ZONE II, BHOPALTHROUGH ITS PARTNER SHRI KAMAL KUMAR JAIN S/O SHRI PREM CHAND JAIN, AGED ABOUT 56 YEARS, R/O H. NO. 863, KOTRA SULTANABAD, SARKARI SCHOOL KE SAMNE, HUZUR, C.T.T. NAGAR, BHOPAL (MADHYA PRADESH) .....PETITIONER (BY SHRI ANKIT AGRAWAL - ADVOCATE WITH SHRI AYUSH GUPTA - ADVOCATE) AND 1. THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, INCOME TAX DEPARTMENT M.P. AND CHHATISGARH, AAYKAR BHAWAN, 48, ARERA HILLS, HOSHANGABAD ROAD, BHOPAL (MADHYA PRADESH) 2. PRINCIPAL COMMISSIONER OF INCOME TAX-1, INCOME TAX DEPARTMENT AAYAKAR BHAWAN, 48, ARERA HILLS, HOSHANGABAD ROAD, BHOPAL (MADHYA PRADESH) 3. THE INCOME TAX OFFICER ITO, 1 (2), BHOPAL INCOME TAX DEPARTMENT AAYAKAR BHAWAN, 48, ARERA HILLS, HOSHANGABAD ROAD, BHOPAL (MADHYA PRADESH) 4. THE BRANCH MANAGER, STATE BANK OF INDIA VIDISHA ROAD, RAISEN (MADHYA PRADESH) .....RESPONDENTS 1 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified (BY SHRI SIDDHARTH SHARMA - ADVOCATE) This petition coming on for admission this day, JUSTICE SUJOY PAUL passed the following: ORDER With the consent, finally heard. 1. In this writ petition filed under Article 226/227 of the Constitution the challenge is mounted to the order dated 03.01.2023 (Annexure P/6), whereby the application preferred by the petitioner dated 05.09.2022 (Annexure P/4) was rejected by the respondent No.3. 2. In the said application, the petitioner apart from other reliefs also prayed for not insisting to take 20% of the demand and grant complete stay without any deposit. In support of such prayer, the petitioner in his detailed application (running in 16 pages) reproduced the enabling provision i.e. Section 220(6) of the Income Tax Act, 1961 and also cited various judgments to show the manner in which power vested under Section 220(6) of the Act can be exercised. 3. Shri Ankit Agrawal, learned counsel for the petitioner advanced singular contention against the impugned order dated 03.1.2022 (Annexure P/6). He submits that by passing an sketchy order, respondent No.3 has rejected the prayer of petitioner and directed him to deposit 20% of disputed demand of Rs.68,70,354/-. However, the respondent No.3 has not dealt with the scope and ambit of enabling provision namely Section 220(6) of the Act and has not considered the factual backdrop mentioned by the petitioner and the judgments cited on the said subject. Thus, an order passed without assigning any reason must be axed and matter may be remitted back to the respondent No.3 to decide the said prayer afresh in accordance with law. 2 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified 4. Shri Siddharth Sharma, learned counsel for the respondent No.3 supported the impugned order and urged that the said order is passed in consonance with law. 5. The parties confined their arguments to the extent indicated above. 6. We have heard the parties at length and perused the record. 7. The application (Annexure P/4) shows that it is pregnant with factual matrix of the matter, the relevant statutory provision and the judgments interpreting the said provision. The impugned order shows that the argument advanced by Shri Ankit Agrawal has substantial force. Respondent No.3 has not taken pains to deal with the factual backdrop, the relevant statutory provision and the judgments cited by the petitioner in support of his contention in the said application (Annexure P/4). 8. In other words, while reaching to a 'conclusion', the respondent No.3 has not assigned any 'reason' as to why stand taken by the petitioner was not treated to be trustworthy by the respondent No.3. The reasons are held to be heart beat of conclusions. In absence of reasons, conclusion cannot sustain judicial scrutiny. 9. The Apex Court in the case of M/s. Kranti Associates Pvt. Ltd and another Vs. Masood Ahmed Khan and others (2010) 9 SCC 496 emphasized the need of assigning reasons in administrative, quasi-judicial and judicial function/order. The relevant portion reads as under:- "47. Summarizing the above discussion, this Court holds: a. In India the judicial trend has always been to record reasons, even i n administrative decisions, if such decisions affect anyone prejudicially. b. A quasi-judicial authority must record reasons in support of its conclusions. c. Insistence on recording of reasons is meant to serve the wider 3 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified principle of justice that justice must not only be done it must also appear to be done as well. d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations. f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. g. Reasons facilitate the process of judicial review by superior Courts. h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice. i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. j. Insistence on reason is a requirement for both judicial accountability and transparency. k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then M/S Kranti Asso. Pvt. Ltd. & Anr vs Masood Ahmed Khan & Ors on 8 September, 2010 it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process". 4 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified (SUJOY PAUL) JUDGE (ACHAL KUMAR PALIWAL) JUDGE (Emphasis supplied) 10. If impugned order is tested on the anvil of litmus test laid down by the Apex Court in Kranti Associates (supra), it will be clear that the impugned order is devoid of any reason. Thus, it deserves to be jettisoned. Accordingly, the impugned order dated 03.01.2023 (Annexure P/6) is set aside. The matter is restored in the file o f respondent No.3 at the stage of consideration of application (Annexure P/4). The respondent No.3 shall rehear the parties on the application (Annexure P/4) and pass a fresh order in accordance with law expeditiously. 11. At this stage, Shri Ankit Agrawal urged that for non-deposit of 20% amount, respondent No.3 subsequently directed to attach the bank account of the petitioner maintained in the State Bank of India. Since that order was passed because of non-payment of disputed amount of 20% and this Court while setting aside the impugned order dated 03.01.2023 is kind enough in remanding the matter for fresh consideration, the said attachment order may also be stayed till fresh decision on application dated 05.09.2022. 12. The prayer is opposed by Shri Siddharth Sharma. 13. The above prayer, in our opinion is reasonable. The respondent No.3 shall hear the parties on application dated 05.09.2022 Annexure P/4 and take a decision on it and thereafter decide the stay application in accordance with law afresh. Till such time, the above order of attachment will remain in abeyance. 14. It is made clear that this Court has not expressed any opinion on the merits of the case. Petition is disposed of. 5 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified rj

6 Signed by: RAJESH KUMAR JYOTISHI Signing time: 7/26/2023 10:53:02 AM Signature Not Verified