SHRI. MARUTI NIVRUTI NAVALE vs. MR. UJJWAL CHOUDHARI DIRECTOR GENERAL OF INCOME-TAX and ORS.

WP3447.12 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3447 OF 2012. Shri Maruti Nivruti Navale ] Sinhagad Technical Education Society ] Campus, Vadgaon Bk, Pune 411 041 ] ... Petitioner Vs 1. Mr. Ujjwal Choudhari, ] Director General of Income-tax ] (Investigation), Pune, having his office ] at Aayakar Bhavan, 12, Sadhu Vaswani ] Road, Pune – 411 001. ] 2. Mr. Prakash Chandra, ] Commissioner of Income-tax (Appeals) ] Central, Pune, having his office at PMT ] Building, Swargate, Pune ] 3. Mr. Suhas Kulkarni, ] Assistant Commissioner of Income-tax, ] Central Circle 2(2), PMT Building ] Swargate, Pune. ] 4. Smt. Simar Singh Negi, ] Commissioner of Income-tax – Central, ] PMT Building, Swargate, Pune ] 5. Mr. G.S. Gadkari, ] Tax Recovery Officer (Central) Range 2 ] PMT Building, Swargate, Pune ] 6. Union of India, ] Ministry of Finance, Government of ] India, North Block, New Delhi-110001 ] ... Respondents SRP                                                                                                                                                           1/10 CNR No : HCBM010152282012 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 Mr. J.D. Mistri, senior counsel with Mr. N.D. Sheth, Mr. Nitin Dhumal i/b Mr. Nitin Dhumal for the Petitioner. Mr. Vimal Gupta for the Respondents. CORAM : S.J. VAZIFDAR, & M.S. SANKLECHA, JJ. FRIDAY, 22ND JUNE, 2012 ORAL JUDGMENT : [Per S.J. Vazifdar, J.] 1. Rule. With the consent of the parties, the writ petition is heard finally. 2. Respondents Nos.1 to 5 are the Director General of Income-tax (Investigation), Pune, Commissioner of Income-tax (Appeals), Assistant Commissioner of Income-tax, Commissioner of Income-tax and the Tax Recovery Officer, respectively. Respondent No.6 is the Union of India, Ministry of Finance. 3. The petitioner seeks a writ of certiorari to quash and set aside the orders dated 22nd February, 2008, 26th March, 2008 and 14th March, 2012, passed by respondent Nos.3, 4 and 1, respectively and a writ of SRP                                                                                                                                                           2/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 mandamus directing them to grant a stay of the demand till the petitioner's appeal for the assessment years 1999-2000 to 2006-2007 are disposed of. The petitioner has also sought an order directing respondent No.2 to expedite the hearing of the said appeals. 4. Although the main orders were passed over four years ago, considering the facts of this case, the writ petition cannot be rejected on that ground. 5. On 31st December, 2007, a block assessment was made for the said period. On 24th January, 2008, the petitioner filed an appeal before the Commissioner of Income-tax (Appeals). On 20th February, 2008, the petitioner also filed an application for stay of the recovery before the Assessing Officer (AO) and the Deputy Commissioner of Income-tax, Central Circle 2(2), Pune (DCIT) under section 220(6) of the Income Tax Act, 1961. 6. By the impugned order dated 22nd February, 2008, the DCIT stated that the mere filing of an appeal cannot be a ground for SRP                                                                                                                                                           3/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 withholding the tax demand and directed the petitioner to pay fifty per cent of the demand immediately and stayed the balance demand till the disposal of the appeal. He further stated that if the petitioner failed to deposit the amount within one week of the receipt of the letter, coercive measures would be taken for the recovery of the demand, without further notice. No reasons whatsoever have been furnished in respect of the order. The order is, therefore, clearly contrary to law. Mr. Mistri's reliance upon the judgment of a Division Bench of this Court in KEC International Ltd. v. B.. Balakrishnan & Ors., 251 ITR 158 is well founded. 7. In accordance with what we are informed has been the practice for some time, the petitioner filed an application for stay before the Commissioner of Income-tax on 25th February, 2008. The same was dismissed on 26th March, 2008. 8. The petitioner then filed stay applications on 15th September, 2008, 1st December, 2008 and 13th April, 2009 before the SRP                                                                                                                                                           4/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 Commissioner of Income-tax (Appeals). It is important to note that there has been no response to or a hearing in respect of these applications. 9. The petitioner did not deposit the amount as directed by the order dated 22nd February, 2008. However, no coercive steps have been taken pursuant thereto. That is probably why the petitioner had not challenged the order or applied for a hearing of the stay application before the CIT (Appeals). 10. The appeal was heard on 24th October, 2008. The Commissioner of Income-tax (Appeals) called for a remand report. The assessing officer, however, forwarded remand reports only in April, 2010. The Commissioner of Income-tax (Appeals) forwarded the same to the petitioner on 26th October, 2011, in May, 2011, June, 2011 and February, 2012 in respect of different years, to the petitioner. The petitioner filed a response to one of the remand reports in June, 2011. On 2nd March, 2012, the appeal was heard only on the SRP                                                                                                                                                           5/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 preliminary issues. Nothing further has been done in respect of the hearing even thereafter. The next date of hearing has also not been fixed. 11. Thus far, therefore, neither the petitioner's applications for stay nor the petitioner's appeal before the Commissioner of Income-tax (Appeals) have been heard. 12. As no coercive steps have been taken thus far, in the facts and circumstances of the case we are not inclined to reject the petition merely on the ground that the order in respect of the first application for stay before the AO/DCIT was disposed of on 22nd February, 2008. 13. The present writ petition was necessitated on account of the Director General of Income-tax (Investigation) – respondent No.1, having addressed a letter dated 6th March, 2012, calling upon the petitioner to attend his office along with the details of taxes paid, if any, and an order dated 14th March, 2012, passed by him thereafter, directing the petitioner to make payment of Rs.4 crores latest by 25th SRP                                                                                                                                                           6/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 March, 2012, failing which, it was stated, coercive action would be initiated against the petitioner. It was further stated that subject to the above payment, the demand for balance arrears shall remain stayed till the decision of the appeal or 30th June, 2012, whichever was earlier. In other words, therefore, even if the amount of Rs.4 crores is deposited by the petitioner and the appeal is not heard on or before 30th June, 2012, the stay to recover the balance amount is to stand vacated. 14. The order dated 14th March, 2012, contains no reasons whatsoever. This is probably on account of the fact that it appears to have been passed, not upon an independent consideration of any application for stay, but in view of the order dated 20th February, 2008 and the petitioner's non-compliance of the conditions stipulated therein viz. the deposit of fifty per cent of the demand. 15. We do not intend expressing any view on the merits of the matter, including in respect of the petitioner's applications for stay which are pending before the Commissioner of Income-tax (Appeals). SRP                                                                                                                                                           7/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 As the order dated 22nd February, 2008, contains no reasons whatsoever, it is liable to be set aside. 16. Having said that, however, the revenue ought not to be prejudiced in any manner whatsoever. We intend, therefore, protecting the revenue despite the fact that the revenue may not have taken effective steps over the years for protecting the recovery of the petitioner's alleged dues. We, therefore, intend accepting the undertaking on behalf of the petitioner not to deal with, part with possession of, dispose of, alienate, encumber or create any third party right, title and/or interest in, to, upon or in respect of any of his rights in any immovable properties upto and including 31st August, 2012. Limiting this undertaking upto 31st August, 2012, addresses the petitioner's apprehension that once such an injunction is granted, the respondents will not dispose of the above proceedings. In view of this undertaking and in view of the above facts, it is reasonable to direct the respondents not to take any coercive steps for the recovery of the demand, but only to the extent of the actual recovery and appropriation of the petitioner's properties towards the demand. In SRP                                                                                                                                                           8/10 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 03:21:54 WP3447.12 other words, the respondents are not prevented from taking all other steps to protect the recovery of the demand, including attaching the petitioner's properties in accordance with law. 17. The writ petition is, therefore, disposed of by the following