Mr. Kumara Swamy Bairi, vs. The Income Tax Officer

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WP/2776/2025HC TelanganaHBHC01005518202503 February 2025Author: SUJOY PAUL,RENUKA YARA6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, noting that the point involved was squarely covered by a recent order of the same court in W.P.No.228 of 2025 decided on January 9, 2025, disposed of the present writ petition in terms of that order. The court set aside the impugned order dated November 21, 2024, passed by the Income Tax Officer. Consequently, the stay application was revived. The petitioner was directed to appear before the Income Tax Officer on February 10, 2025, for which no separate notice would be required. The Income Tax Officer was directed to decide the petitioner's stay application afresh in accordance with the law. The court also noted that it would be open for the petitioner to file another application for lifting of restrictions on the bank account. The writ petition was disposed of without expressing any opinion on the merits of the case. The court did not decide the validity of the recovery notices on merits but allowed the petitioner to approach the ITO for a fresh decision on the stay application, which could potentially address the recovery issue.

What were the facts?

The petitioner, Mr. Kumara Swamy Bairi, filed a writ petition before the High Court of Telangana at Hyderabad challenging an order dated November 21, 2024, passed by the Income Tax Officer (ITO), Ward 11(1). This order rejected the petitioner's stay application, which was filed pending the disposal of his appeal before the appellate authority for Assessment Year 2017-18. The petitioner also challenged recovery notices dated January 23, 2025, issued by the ITO to banks. The petitioner sought a writ of mandamus to declare the ITO's order and recovery notices as arbitrary, illegal, barred by limitation, bad in law, void-ab-initio, and violative of principles of natural justice and constitutional provisions. He also sought a stay of recovery pending the appeal. The petition was filed under Article 226 of the Constitution of India.

What were the issues?

1. Whether the order passed by the Respondent No. 1 (Income Tax Officer) rejecting the stay application filed by the Petitioner, pending disposal of the Petitioner's appeal before the Appellate Authority, is arbitrary, illegal, barred by limitation, bad in law, void-ab-initio, violative of the principles of natural justice, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India and Section 220 of the Income Tax Act, 1961. 2. Whether the recovery notices issued by Respondent No. 1 to the banks are bad in law, void-ab-initio, violative of the principles of natural justice, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India and Section 220 of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the rejection order was solely based on CBDT OMs dated February 29, 2016, and July 31, 2017. He relied on Supreme Court and High Court judgments (Principal Commissioner of Income Tax 5 & ors. v. M/s.LG Electronics India Pvt.Ltd., APR Jewellers Private Limited v. The Commissioner of Income Tax (Appeals), Hyderabad-I and another, and M/s.Zoos and Parks Authority of Telangana v. the Commissioner of Income Tax) which held that a quasi-judicial authority should apply its independent mind and not be bound by administrative circulars. The petitioner prayed for the rejection order to be set aside and for the ITO to decide the stay application afresh. Revenue's Contention: The revenue, through the Junior Standing Counsel for the Income Tax Department, had no objection to the petitioner's prayer.

Which sections of the Income-tax Act were involved?

Section 220

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[ 3446 J HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Originat Jurisdiction) IVONDAY, THE THIRD DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HONOURABLE SMT JUSTICE RENUKA YARA WRIT PETITION NO: 2776 OF 2025 Between lvlr. Kumara Swamy Bairi, Flat No 202 Prime Castle Aparlments, Nizampet, Bachupally, Hyderabad -500 090 AND ...PET|T|ONER 1. The lncome Tax Officer, Ward 11(1), Signature Towers, Sy.No.6(plof [95r-o3qu1.S.V,a1(P) of Kothag!da, Opp. Botanicat Garden!, Sedin!ampaily (M), R.R.District, Hyderabad, Tetangana, 500084 2. Assessment Unit, lncome Tax Department, National e-Assessment Center, New Delhi, Room No. 4O1,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, New Delhi 110 003. 3. The Central Board of Direct Taxes, Represented by its Chairman, Department gl Rgvgftye, M!rys-try of Finance, Government of lnilia, Secrelariat Buildings, NewDelhi - 110 001. 4. The Joint Commissioner (Appeals), The Commrssioner of lncome Tax eppgqls), National Fageless Apaeat Centre, Dethi, Through the principat Chief Commissioner of lncome Tax (NaFAC), Delhi, NorttiBlock, New Delhi 1 10 001 5. lclcl Bank L!d-, Jyothi Arcade, Door No.7168/7, tvtain Road, chatkesar, - $algareddy Dist 501301 Represented by its manager 6. Axis Bank Limited, 7th Floor, C-2, Wadia lnternational Centre, Axis house, Pandrang Bdhkar Marg, Worli, Mumbai - 400025, Maharashtra. ...RESPONDENTS . Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order, or direction more particularly one in the nature of a Writ of Mandamus declaring i. That the order passed by the Respondent No. 1 vide DIN ITBAJCOM/F/1712024-2511070528271(1) dated 21-11-2024, in rejecting the stay application filed by the Petitioner, pending disposal of the appeal of the Petitioner before the Pt Appellate Authority, i.e., the 5th Respondent herein, for the Assessment Year 2017-18, as arbitrary, illegal, barred by limitation, bad in law, void-ab-initio, violative of the principles of natural justice, apart frorn being violative of Articles 14, 1 9( 1 )(g) and 265 of the Constitution of lndia and tiec 220 of the lncome Tax Act 1961, and consequently set-aside the same and grant stay of recovery, pending disposal of the Petitioners appeal before. the Appellate Authority, in the lnterests of justice and pass such other order or orders may deem fit and proper in the circumstances of the case. ii. That recovery rrotice issued by Respondent No. 1 vide DtN. TTBAJCOM/F/17 /2024-2511072,14177 4(1) and |IBNCOT\AIFl17l2024- 2511072441895(1) both dated Z3-O1-'.2_OZ5 to rhe respondent no. i3 and 7 bad in law, void-ab-initio, violative of the principles of natural justice, apart from being violative of Articles i , t9(1Xg) and 265 of the Constitution of lrdra and Section 22O oI lhe lncome Tax /\ct, 1961 , and consequenlly set-aside the same and grant stay of recovery, pendrng disposal of the Petitionels appeal before the Appellate Authority, in the interest:; of justice_ lA NO: 1 OF 202!i Petition und-^r Section 151 CPC praying that in the circumslances stated in the affidavit filed ir support of the petition, the High Court may be pleased to stay operation of order rearing DIN ITBNCOMIF 117 t2O24-2Sl1O7OS2827 1(t) dated 21_ 11-2024 passed by Respondenl No. 1. lA NO: 2 OF 202ai Petition undr-'r section 151 cPC praying that in the circumstances stated in the affidavit filed n support of the petition, the High court may be pieased to stay operation of orcer bearing DIN |TBA/COM/F|1712O24-25t1072441895( 1) and IBNCOM|FllTl2O2-4- 2511O724417t4(1) both dated 23-01-2O:2!j passed by Respondent No. 1. Counsel for the Petitioner: SRt VENKATA PRASAD.p Counsel for the Respondent Nos.1 TO 4: Ms. J.SUNITHA, JUNTOR SC FOR tTD Counsel for the Respondent Nos.S & 6: --

The Court made the following: ORDER

7 THE HON'BLE THE ACTING CIIIEF JUSTICE SUJOY PAI'L AND TIIE HON'BLE SMT. JUSTICE RENUKA YARA WRIT PETITION No.2776 of 2o25 ORDER (Per the Hon'ble the Acting Chief Justice Sujog Paut) Sri Venkata Prasad P., learned counsel for the petitioner and Ms. J. Sunitha, learned Junior Standing Counsel for Income Tax Department, for respondent Nos. 1 to 4 2 With the consent, frnally heard.

3.

At the outset, learned counsel for both the parties urge that the point involved in this matter is squarely covered !y recent order passed by this Court in W.P.No.228 of 2025 decided on O9.O1.2O25 and this petition may be disposed of in terms of said order. 4 The aforesaid order in W.P.No.228 of 2025 reads thus:

"

3.

The challenge is mounted to the order dated 17.L2.2O24 (Annexure P1O), whereby the petitioner's stay application has been rejected by respondent No. 1. 4. Learned counsel for the petitioner submits that the rejection order shows that it is solely based on CBDT OMs dated 29.02.2016 and 31.O7.2O17. The Apex Court had an occasion to consider this aspect in Principal Commissioner of Income Tax 5 & ors. v. M/s.LG Electronics India Pvt.Ltd.,l and this Court in APR Jewellers Private Limited v. The Commissioner of Income Tax (Appeals), Hyderabad-I and another2 and M/ s.Zoos and Parks Authority of Telangala v. the Commissioner of Income Tax 1 2018 (7) TMI 1905 - SC Order 2 2022 (51 TMI 1067 2 Exemptions and another3. It is submitted that the Courts opined that respondent No. 1 being a quasi judicial authority should apply its independent mind and sha-Il not be bound by the administrative circulars. Thus, it is prayed that the said I \ - rejection order dated t7.12.2024 may be set aside and 2 resp(rndent No. 1 may be directed to decide the stay application afresh within the stipulated time.

5.

The other side has no objection to this innocuous praFor. 6. ,A,r:cordingly, the impugned order dated 77.12.2!.024 is set aside. Resultaltly, the stay application is revived. The petitioner shall appear before the appcllate autirority on 13.01.2025. The appellate authoritv shall decide the stay application afresh, in accordance with lau., .vithin 15 days therefrom. 7 . Th,e Writ Petition is disposed of, without expr essing any opinion on the merits of the case. No ordel as to costs."

5.

In vie',.', of said order, the impugned order daterl 2I.11.2024 is set aside. The matter is restored in the hle of respondent No.

1.

The petitioner sha1l appear before respondent No.1 ort 1O.O2.2O25 for which no separate notice will be required to be issued. Respondent l,Io. 1 shall decide the stay application of th e petitioner afresh in acc,lldance with law. It will be open for the iretitioner to file another application for lifting of restrictions orL the bank account. 6 The Writ Petition is disposed of. No costs. InterJ.ocutory applications, if any pending, shall also stand closed 6- P.Ch. NAGABHUSHAMBA //// ASSISTANT REGISTRAR Jr,,\ VS ECTION OFFICER 2 The lnc,lre Tax Ot'ficer. Ward 1,1(1), Signature Towers, Sy.No.6(p) ol K o nd a p u r . S y 3 z( p ) o f K o t h a grd a, 6 p p : B;i; " i ";i'c;r"o e"n-i, s e a i n g a m p a r r y ( M ) -R Ft l)isrlct,. H yderabad,ieta;g;fia, 5d0db? Assessrn,.:nt Unit, tncome Tr1 pgojrtl.1i, Nii,onar e-Asses sment Center, N:W B:li ,i3,ilNo. 40 r, 2nd Frbor, E_Ril;, i;;;,iLj ru"r,r., stadium, The Charirman. Central Board of Direct Taxes, Department,)l Revenue, yll,s^rly . rinance, Government oi i"oi"l'S"irJtlli"ri"au'iiii,,,l. NewDelhi _ 3 To lltJUUt 4 ,fri&3f t'-"fr $Hiff lH;if +,{,lii""#€i,,ui,^ur,,E$"r^:,m,*^ *H*$w,*;.gg,ffi'm*:i. 6 7. o o PSK. KKS I I L l I

I HIGH COUR.']- DATED:0310i112025 ORDER WP.No.2776 of 2025 DISPOS!NG OF THE WRIT PETITION WITHOUT CIOSTS /{ \ f. dE STArE ,,} -{:. (o i l rqr lull n -l .i rr, r,--( --.' 4. /< r9 /t /.2t )

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