TULSI DEVELOPERS INDIA (P) LTD vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

JUDGMENT The petitioner has approached this Court aggrieved by Ext.P6 stay order passed by the first appellate authority in a stay application filed along with an appeal against the order of assessment under the Income Tax Act. In the writ petition, it is the specific case of the petitioner that while the appellate authority was directed to consider the stay application preferred by the petitioner on merits, by Ext.P5 judgment of this Court, the appellate authority while passing Ext.P6 stay order relied on certain office memoranda issued by the CBDT to insist on the petitioner paying 20% of the disputed demand as a condition for grant of stay, pending disposal the appeal. It is the contention of the learned counsel for the petitioner that while the appellate authority ought not to have gone by the directions in the office memorandum of the CBDT, while considering a stay application pursuant to the direction of this Court, it is a further fact that before passing the said order, the petitioner was also not given an opportunity of hearing. 2.I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find force in the contention of the learned counsel for the petitioner that while passing Ext.P6 stay order, the first appellate authority was virtually acting under dictation, in that the first

WP(C).No.16473 OF 2020 3 appellate authority felt compelled by the CBDT instructions relied upon in his order, to insist on a payment of 20% of the disputed demand, pending disposal of the appeal. In my view, when there was a specific direction in Ext.P5 judgment of this Court to the appellate authority to consider the stay application on merits, the appellate authority ought to have considered the stay application as directed by this Court, and without placing any reliance on the instructions issued by the CBDT directing the application to be decided in a particular way. Even otherwise, it is obligatory on statutory authorities who are entrusted with quasi judicial powers under a statute, to adjudicate on issues without being bogged down by executive instructions that direct them to exercise their discretion in any particular manner. As a creature of the statute, on whom the discretionary power is conferred, the authority cannot abdicate his responsibilities by acting on the dictates of another who has no role to play under the statutory scheme. I also find force in the contention of the learned counsel for the petitioner that the appellate authority did not hear him while passing Ext.P6 stay order, and that this was a further act in contravention of the directions of this Court in Ext.P5 judgment. In the result, I quash Ext.P6 order and direct the first appellate authority to pass fresh orders in the matter after hearing the petitioner, either through a physical hearing or through video conference, keeping in mind the observations made in this judgment. The 2nd respondent shall accordingly pass fresh orders as directed within a period of four months from the date of receipt of a copy of this judgment. Needless to say, till such time as orders are passed by the 2nd respondent as directed, and the order communicated to the petitioner, recovery steps for recovery of amounts

WP(C).No.16473 OF 2020 4 confirmed against the petitioner by the assessment orders impugned in the appeal shall be kept in abeyance. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before 2nd respondent, for further action. A.K.JAYASANKARAN NAMBIAR JUDGE SJ

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