Madhya Pradesh Employess Selection Board (Formerly Professional Examination Board) vs. Income Tax Department

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WP/27972/2024HC Madhya Pradesh24 September 2024Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI4 pages
For Petitioner: Rahul Diwaker
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What did the High Court hold?

The High Court held that the interim order passed by the Principal Chief Commissioner of Income Tax on June 12, 2024, which granted a stay on the outstanding demand for three months, deserved to be extended. The Court noted that the stay had already been granted and that it was unclear how long the pending appeals would take to be decided. Consequently, the Court extended the order passed by the Principal Chief Commissioner of Income Tax dated June 12, 2024, until the decision of the appeal. The Court explicitly stated that it had not considered the merits of the cases and that the respondents were free to decide the appeals expeditiously and in accordance with law. The operative direction was to extend the existing stay order.

What were the facts?

The petitioners, Madhya Pradesh Employees Selection Board (formerly Professional Examination Board), filed writ petitions challenging assessment orders dated May 25, 2023, which raised demands under Section 147 read with Section 144(B) of the Income Tax Act for various assessment years. Appeals were filed under Section 246 of the Act. An application for stay of demand before the assessing officer was rejected, as was a subsequent application before the Commissioner. The Principal Chief Commissioner of Income Tax, however, granted a three-month stay on the demand on June 12, 2024, which expired on September 12, 2024. A subsequent application for extension of this stay remained undecided. The High Court heard the petitions concerning the extension of the interim order and the expedition of the pending appeals.

What were the issues?

1. Whether the interim order dated 12.06.2024, passed by the Principal Chief Commissioner of Income Tax, directing a stay on the outstanding demand, should be extended till the disposal of the appeal? (Question of law and fact, concerning the powers of the Commissioner and the principles of interim relief). 2. Whether the appeal preferred by the petitioner under Section 246 of the Income Tax Act should be expedited? (Question of procedure and administrative efficiency). Assessee's Contentions: The petitioner argued that the assessment order was erroneous and that an appeal was pending. They contended that their application for extension of the stay order, which had expired, had not been decided by the Principal Chief Commissioner of Income Tax. They sought extension of the interim order and expedition of the appeal. Revenue's Contentions: The revenue stated that the appeal was being conducted under a faceless assessment scheme and should be decided in accordance with law. However, the revenue was unable to specify the time frame for the appeal's finalization or provide reasons for the delay in deciding the extension application.

Which sections of the Income-tax Act were involved?

Section 147,Section 144(B),Section 246

AI-generated summary — verify with the full judgment below

Before: HONBLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HONBLE SMT. JUSTICE ANURADHA SHUKLA Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. SHRIVASTAVA

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SMT. JUSTICE ANURADHA SHUKLA ON THE 24th OF SEPTEMBER, 2024 WRIT PETITION No. 27973 of 2024 EMPLOYEES SELECTION BOARD Versus INCOME TAX DEPARTMENT AND OTHERS Appearance: Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. WITH WRIT PETITION No. 27968 of 2024 MADHYA PRADESH EMPLOYEES SELECTION BOARD (FORMERLY PROFESSIONAL EXAMINATION BOARD) Versus PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX AND OTHERS Appearance: Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. WRIT PETITION No. 27972 of 2024 MADHYA PRADESH EMPLOYESS SELECTION BOARD (FORMERLY PROFESSIONAL EXAMINATION BOARD) Versus INCOME TAX DEPARTMENT AND OTHERS Appearance: Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. 1 WP-27972-2024 Signed by: DEVESH K SHRIVASTAVA Signing time: 24-09-2024 18:22:32 Signature Not Verified

WRIT PETITION No. 27983 of 2024 MADHYA PRADESH EMPLOYEES SELECTION BOARD (FORMERLY PROFESSIONAL EXAMINATION BOARD) Versus PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX AND OTHERS Appearance: Shri Rahul Diwakar - Advocate for the petitioner. Shri Siddharth Sharma - Advocate for the respondent. ORDER Per: Justice Sushrut Arvind Dharmadhikari Heard on the question of admission. Regard being had to the similitude of the controversy involved in the present cases, with the joint request of the parties, these petitions are analogously heard and being decided by this common order. Facts of W.P. No.27973/2024 are narrated hereunder. The petitioners before this Court have filed the present petition under Article 226 of the Constitution of India seeking following reliefs:-

i. To issue an appropriate writ thereby directing the respondent no.1 to extend the interim order dated 12.06.2024 passed by the respondent no.1 till the disposal of the appeal. ii. To issue an appropriate writ thereby directing the respondent no.3 to expedite and decide the appeal preferred by the petitioner. iii. To issue an appropriate writ thereby quashing and setting aside the assessment order dated 25.05.2023 passed by the respondentno.4. iv. To issue an appropriate writ thereby staying the demand raised vide the assessment order dated 25.05.2023 passed by the respondent no.4. v. To grant any other relief as this court deems fit and proper in the interest of justice. 2 WP-27972-2024 Signed by: DEVESH K SHRIVASTAVA Signing time: 24-09-2024 18:22:32 Signature Not Verified

2.

The learned counsel for the petitioner submitted that demand has been raised under Section 147 r/w 144(B) of the Income Tax Act for the different assessment year. Thereafter, an appeal was preferred under Section 246 of the Income Tax Act which is pending consideration. The application for stay of the demand was filed before the assessing officer which was rejected. Being aggrieved, the petitioner preferred an application before the Commissioner which was also dismissed. Thereafter, he moved an application before the Principal Chief Commissioner of Income Tax on 12.06.2024, who stayed the outstanding demand for a period of three months which came to an end on 12.09.2024. 03. The petitioner again filed an application seeking extension of time vide (Annexure P/9) before the same authority i.e. Principal Chief Commissioner of Income Tax, but that application has not been decided nor the stay has been extended. 04. Vide order dated 20.09.2024, the learned counsel for the revenue was directed to seek instructions in the matter as to within how much time period the appeal is likely to be decided and if there is inordinate delay in deciding the appeal, then why the interim order granted earlier by the Principal Chief Commissioner of Income Tax may not be continued. 05. Learned counsel for the revenue stated that he has instructions that the appeal being conducted under a faceless assessment scheme, therefore the appeal should be decided in accordance with law. However, he was unable to point out as to how much time would the appeal take to attain finality. 3 WP-27972-2024 Signed by: DEVESH K SHRIVASTAVA Signing time: 24-09-2024 18:22:32 Signature Not Verified

(SUSHRUT ARVIND DHARMADHIKARI) JUDGE (ANURADHA SHUKLA) JUDGE 06. Heard the learned counsel for the parties. 07. Taking into consideration the fact that the Principal Chief Commissioner of Income Tax has already stayed the outstanding demand for a period of three months and also looking to the fact that it is not known that how much time would it take to decide the appeals, this Court is of the considered opinion that the order passed by the Principal Chief Commissioner of Income Tax deserves to be extended. 08. Looking to the facts and circumstances of these cases, the order passed by the Principal Chief Commissioner dated 12.06.2024 is extended till the decision of the appeal. 09. This Court has not dwelled on the merits of these cases, the respondents are free to decide the appeal in accordance with law as expeditiously as possible in accordance with law. 10. The writ petitions are accordingly, disposed off. DevS

4 WP-27972-2024 Signed by: DEVESH K SHRIVASTAVA Signing time: 24-09-2024 18:22:32 Signature Not Verified

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