Dr. Samit Sekhar vs. The Pr. Commissioner of Income Tax(Central)

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WP/31421/2022HC TelanganaHBHC01045303202203 August 2022Bench: SUREPALLI NANDA,UJJAL BHUYAN5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the order dated July 21, 2022, passed by the Principal Commissioner of Income Tax (Respondent No. 1). The Court found that the impugned order did not disclose any application of mind and appeared to have been passed mechanically. While acknowledging that the Principal Commissioner, exercising powers under Section 220(6) of the Income Tax Act, 1961, exercises quasi-judicial powers and is not strictly bound by CBDT guidelines, the Court emphasized that such an order must be a reasoned one. Consequently, the matter was remanded back to Respondent No. 1 for a fresh decision on the petitioner's stay application dated July 11, 2022. Respondent No. 1 was directed to provide the petitioner with a due opportunity of hearing and then pass an appropriate order in accordance with the law within four weeks from the receipt of the order. Until such fresh decision, the demand raised following the assessment order dated April 21, 2021, was to be kept in abeyance.

What were the facts?

The petitioner, Dr. Samit Sekhar, a medical practitioner, is an assessee under the Income Tax Act, 1961. For the assessment year 2018-19, the Assessing Officer passed an assessment order under Section 143(3) of the Act, assessing the petitioner's income at Rs. 4,64,55,817.00, and a demand notice under Section 156 was issued. The petitioner filed an appeal before the Commissioner of Income Tax (Appeals) on May 22, 2021. Subsequently, on July 11, 2022, the petitioner filed a stay petition before the Principal Commissioner of Income Tax (Respondent No. 1) during the pendency of the appeal. Respondent No. 1, by an order dated July 21, 2022, disposed of the stay application by framing a payment schedule, stating that subject to such payment, the balance amount would be stayed until the disposal of the appeal or March 31, 2023, whichever is earlier. The petitioner challenged this order by filing a writ petition.

What were the issues?

1. Whether the order passed by the Principal Commissioner of Income Tax (Respondent No. 1) dated July 21, 2022, disposing of the stay application, is bad in law and against CBDT guidelines and instructions? (Question of law and fact, turning on Section 220(6) of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the order dated July 21, 2022, passed by Respondent No. 1, was cryptic, lacked application of mind, and appeared to have been passed mechanically. The petitioner contended that while exercising powers under Section 220(6), the Principal Commissioner exercises quasi-judicial powers and is not bound by CBDT guidelines, but the order must be a reasoned one. Revenue's Contention: The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 156,Section 220(6)

AI-generated summary — verify with the full judgment below

[3276 ] THE HONOURABLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION NO: 31421 OF 2022 Between: Dr. Samit Sekhar, S/o Naresh Kumar Sekhar, Occ. Medical Doctor, Plot No. 269, Road No.78, Jubilee Hills, Hyderabad ...PETITIONER AND 1. The Pr. Commissioner of lncome Tax (Central), Aayakar Bhavan,Basheerbagh, Hyderabad, Telangana-500004. 2. The Assistant Commissioner of lncome Tax, Central Circle - 1(3), Aayakar Bhawan, Basheerbagh, Hyderabad, Telangana-500004. ,..RESPONDENTS Petition under Article 226 of the 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 Writ of Mandamus by declaring the order passed by the 1't respondent vide Document ldentification Number (DlN)- ITBA/ RCV/ F/ 171 2022-231 1043984499 (1), dl. 21.O1 .2022 as bad in law and against CBDT guidelines and instructions; Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the recovery proceedings till the disposal of first appeal filed before first appellate authority, and pass such other order or orders as the Hon'ble Court may deem fit and proper in the interests of Substantial Justice as otherwise the Petitioner would be put to irreparable loss and in.iury. Counsel for the Petitioner(s): SRl. DUNDU SASHANK MANMOHAN Counsel for the Respondents: B NARASIMHA SARMA The Court made the following: ORDER HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE THIRD DAY OF AUGUST TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN lA NO: I OF 2022

THE IC)N'BLE THE CTIII'F JUSTICE UJJA], B fIIJYT.N AND TH ) ]ION'BLE MRS JUSTICE SUREPALT I I A YDT\ U'RIT PETITION No.3142I of 2Ci2 ORDER: (Pe tll. Horl'ble the Chief Justlcc Ltual Dltrq(nl Hea-r I Mr. Dundu Sashank MzLnre r ran, learned counsel fr r the petitioner and Mr. B.Nara s inrh;r Sarma, learned cc rnsel for the respondents. 2. By il ng this petition under Arti':le 221; of the Constiiut: rrL of lndia, petitioner has asstLi,r cl the legalit1, and valic tlr of the order dated 2l.07.'.lO'.1)' passed b1' responder t No.1 lor the assessmen! year 201B 19. 3. Peti ic,ner before us is a medical prac:ir ioner and is an asses e,l under the Income Tax Act., I !t(,1 (briefll', the Act' here n after) having the status.of in<iiv,dual". For the assessm( n, year 2018-19, respondent No.2 as the assessin, officer passed assessment r;rder dated 21 .O4.2C 2 under Section la3(3) of the Act. Bv the said order, in :ome of the petitioner for the :rfore s a.d e,ssessment year har been assessed at Rs.4,64,55,817.()0. Following

.l such assessment order. demand notice under Section 156 of the Act has been issued to the petitioner. 4. It is stated that against the assessment order dated 21.O4.2021 petitioner has prelerred an appeal belore the first appellate authority i.e., Commissioner of Income Tax (Appeals) on 22.O5.2021 . Since the petitioner was facing demand, he preferred a petition for stay dated 1 I .O7 .2022 before respondent No.l during the pendency of the appeal. By cryptic orcler dated 21.O7.2022, respondent No.1 a disposed of the application dated 11.O7.2022 by framing a schedule of pa5rm6p1 clarilying that subject to such payment, the balance amount would be stayed till disposal of the appeal or till 3l .03 .2023, whichever is earlier. 5. On going through the impugned order dated 21 .O7.2022, we find that the same does not disclose any application of mind on the part of respondent No. 1. Same appears to have been passed mechanically. While exercising powers under Section 220(6\ of the Act, Principal Commissioner exercises quasi judicial powers and is not I L

bourrd by tre guidelines issued b-r, the ot tLL:-al l]oard of Direct Teu :sr (CBDT). The order must be a r:,rsoncrl onc 6. Tha h,eing the position, we set asidc ,lre orclcr dated 21 .07 .2Oi 2 and re mand the matter bac < -o re spondent No. 1 for r rl:ing a fresh decision on thr: app lrcation of the petitioner f,rr stay dated 1 l.O7 .2022. Flt s prrnclent No.1 shall give due opportunity ol hearing to tlrt' pr:titioner and thereafter p ass appropriate order in acco rL Lr^ ce rvith law'. The a,bov' t:xercise shall be carried out rrirl irr a penod ol four weel s lrom the date of receipt of a cop. ,rf this order. Till such iree, the demand raised follou inl3 t rt assessment order dat d 21 .O4.2021 shall be kept in at-.eyance 7 . Thir c isposes of the $,rit petition Mis ellaneous applications penclin 3 il' any, shall stand clo ,el. However, there shall be no r,rder as to costs Sd/. K. AMMAJI AS SI:STINT R GISTRAR //TRUE COPY/i SECTIO\ OFFICER I To, '1 . The Pr. ( )rimissioner of lncome Tax (Central), Aav€ k lr Bhavan,I as heerbagh, Hyderabad, Telangana-500t,0 4 2. The Assi tant Commissioner of lncome Tax, Central 3 rcle -.1(3), Aayakar Bhawan, 3esheerbagh, Hyderabad, Telangana-socOl I 3. One CC I llRl. DUNDU SASHANK MANMOHAN rv v:cate [OpUC] 4. One CC I llRl. B NARASIMHA SARMA Advocate [()t,UC] 5. Two CD )ocies tt ,-*'-- l i \ '-+t1-."'' I

HIGH COU]:1. UBJ & SNJ DATED:03 t )1112022 ORDER -1 ,- -r {, (, WP.No.314 21 of 2022 WRIT PEI TION IS DISPOSED WITHC)IJT COST'S 1 ,t t' z--) ) I

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