M/S. ELCON IMPEX PRIVATE LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

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W.P.(C)/4339/2025HC DelhiDLHC01018490202504 April 2025Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the writ petition by directing the petitioner to approach the learned Principal Commissioner of Income Tax (PCIT) within one week by filing an appropriate application. The Court further directed the PCIT to consider the petitioner's grievances and pass a reasoned order, bearing in mind the decisions of the High Court in Skyline Engineering Contracts (India) (P.) Ltd v. DCIT Circle - 22(2) Delhi: W.P.(C) 6172/2021 and other relevant decisions. This order was to be passed as expeditiously as possible, preferably within three weeks thereafter. The Court reserved all rights and contentions of the parties. The specific issues regarding the refund, stay of demand, quashing of the Section 220(6) order, and expeditious disposal of the appeal were not decided on merits but were to be considered by the PCIT. The operative direction was to approach the PCIT for resolution.

What were the facts?

The petitioner, M/s. Elcon Impex Private Ltd, filed a writ petition before the Delhi High Court challenging an assessment order dated 21.12.2019 for AY 2017-18, which created a disputed demand of Rs. 1,45,56,852/-. The petitioner contended that Rs. 75,77,100/- had been recovered in excess of 20% of the disputed demand, and that recovery steps were being taken despite a pending stay application and an appeal filed on 05.01.2020, which had been pending for over 5 years. The petitioner also challenged an order dated 07.02.2025 under Section 220(6) of the Income Tax Act, 1961, and sought directions for expeditious disposal of their first appeal. The Revenue argued that the petitioner had an alternative remedy under an Office Memorandum.

What were the issues?

1. Whether the petitioner is entitled to a writ of mandamus directing the refund of Rs. 75,77,100/-, being the amount recovered in excess of 20% of the disputed demand of Rs. 1,45,56,852/- for AY 2017-18, created by an assessment order dated 21.12.2019 under Section 143(3)? (Question of law and fact, concerning recovery of disputed demand). 2. Whether the petitioner is entitled to a writ of mandamus prohibiting recovery of the disputed demand till the disposal of their appeal by the CIT(A), and a writ of certiorari quashing the order dated 07.02.2025 under Section 220(6) of the Income Tax Act, 1961? 3. Whether the petitioner is entitled to directions for expeditious hearing and disposal of their first appeal filed on 05.01.2020, which has been pending for over 5 years? Assessee's Contentions: The petitioner argued for the refund of excess recovery, a stay on further recovery pending appeal, quashing of the Section 220(6) order, and expeditious disposal of their appeal. They relied on Office Memorandums dated 29.02.2016 and 31.07.2017. Revenue's Contentions: The Revenue contended that the petitioner had an alternative remedy of approaching the Principal Commissioner of Income Tax (PCIT) in terms of the Office Memorandum dated 29.02.2016.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 220(6),Section 246A

AI-generated summary — verify with the full judgment below

$~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4339/2025, CM APPL. 20067/2025 & CM APPL. 20068/2025

M/S. ELCON IMPEX PRIVATE LTD

.....Petitioner Through: Mr. N.P. Singh, Mr. Barun Dey, Mr. Pushpendra Giri, Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

.....Respondents Through: Mr. Vipul Agrawal, SSC; Ms. Sakshi Shairwal, JSC; Mr. Akshat Singh, JSC with Mr. Gaoraang Ranjan, Advocate for Revenue.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R %

04.04.2025 1. Issue notice. The learned counsel appearing for the Revenue accepts notice. 2. The petitioner has filed the present petition, inter alia, praying as under: “a. Issue Writ of Mandamus, Order or Direction, directing to return / refund the total amount of Rs. 75,77,100/- which has been recovered in excess of 20% of the total disputed demand of Rs. 1,45,56,852/- created by an assessment order dated 21.12.2019 under section 143(3) of income tax act, 1961 for the assessment year 2017-2018, and/or

b. Issue Writ of Mandamus, Order or Direction, prohibiting the Respondent No. 2 from recovering the impugned/disputed demand till the disposal of the appeal by the respondent no. 2 and for other reliefs, and/or

c. Issue Writ of Certiorari, Order or Direction for This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 23:40:23

SETTING ASIDE / Quashing the impugned order dated 07.02.2025 under Section 220 (6) of the Income Tax Act, 1961 issued by the Respondent no. 2, and/or

d. To direct the Respondent No. 2 not to treat the Petitioner as “Assesses/Petitioner in Default”

e. To issue directions to the Respondent No. 1 to hear the First Appeal filed under Section 246A of the Act, 1961 dated 05.01.2020 impugning the Assessment Order dated 21.12.2019 and dispose of the same expeditiously, which is pending for more than 5 years 2 months / 270 weeks approx.”

3.

It is the petitioner’s case that its appeal for the Assessment Year [AY] 2017-18 is pending before the Commissioner of Income Tax (Appeal) [CIT(A)], however, in the meanwhile, the concerned authorities have initiated steps for recovering of the outstanding demands, including adjustments from the refunds due to the petitioner in respect of other assessment years, notwithstanding that the petitioner’s application for stay of the demand is pending. The petitioner also relies on the Office Memorandum dated 29.02.2016 as amended by the Office Memorandum dated 31.07.2017. 4. The learned counsel appearing for the Revenue submits that the petitioner has an alternative remedy of approaching the Principal Commissioner of Income Tax [PCIT] in terms of the Office Memorandum dated 29.02.2016. 5. In view of the above, we consider it apposite to dispose of the present petition by directing that in the event the petitioner approaches the learned PCIT within a period of one week from today by filing an appropriate This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 23:40:23

application, the learned PCIT shall consider the petitioner’s grievances and pass a reasoned order, bearing in mind the decisions of this court in Skyline Engineering Contracts (India) (P.) Ltd v. DCIT Circle - 22(2) Delhi: W.P.(C) 6172/2021 as well as other decisions, as expeditiously as possible and preferably within a period of three weeks thereafter. 6. The petition is disposed of in the aforesaid terms. Pending applications shall also stand disposed of. All the rights and contentions of the parties are reserved.

VIBHU BAKHRU, J

TEJAS KARIA, J APRIL 04, 2025/sms

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 23:40:23

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