MAJUMDAR GLOBAL IP vs. UNION OF INDIA AND ORS.

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WPA/8527/2022HC CalcuttaWBCHCA017889202219 May 2022Bench: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
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What did the High Court hold?

The High Court disposed of the writ petition by directing the assessing officer not to take any coercive action against the petitioner, provided the petitioner pays an additional 10% of the disputed demand. This payment is to be made within ten days from the date of the order, after adjusting the Rs. 10,00,000/- already paid. If the petitioner defaults on this payment, the assessing officer is free to proceed with recovery. The court disposed of the petition without calling for affidavits, deeming the allegations in the petition denied by the respondents. The principle applied is that a partial payment, as a condition for stay, can be a pragmatic approach to balance the interests of the revenue and the assessee during the pendency of an appeal.

What were the facts?

The petitioner, Majumdar Global IP, filed a writ petition before the High Court at Calcutta challenging an order dated April 19, 2022. This order, passed by the assessing officer, rejected the petitioner's application under Section 220(6) of the Income Tax Act, 1961, for a stay of recovery proceedings. The assessment year in question is 2018-19. The disputed demand amounts to Rs. 5,78,06,543/-. The petitioner had already paid Rs. 10,00,000/-. The impugned order required the petitioner to pay 20% of the disputed demand, but the petitioner had only paid approximately 1.72%. Previously, on March 15, 2022, the High Court had directed the disposal of the petitioner's pending appeal within three months.

What were the issues?

1. Whether the assessing officer erred in rejecting the petitioner's application under Section 220(6) of the Income Tax Act, 1961, for a stay of recovery proceedings pending appeal, considering the disputed demand and the amount already paid. Assessee's Contention: The petitioner argued that the assessing officer's rejection of the stay application was arbitrary and that a stay should have been granted. The petitioner relied on the principle that recovery proceedings should generally be stayed when an appeal is pending, especially when a substantial portion of the demand has been paid or a reasonable condition for stay has been met. Revenue's Contention: The judgment does not record specific arguments made by the revenue. However, the assessing officer's order implicitly suggests that the conditions for granting a stay were not met, as the petitioner had only paid a small fraction of the disputed demand and was asked to pay 20%.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

19-05-2022 Item No.19 Subrata IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Appellate Side WPA No.8527 of 2022 Majumdar Global IP -vs- Union of India & Ors. Mr. Abhrotosh Majumder, sr. adv. Mr. Avra Mazumder, adv. Mr. Paritosh Sinha, adv. Mr. Amitava Mitra, adv. Ms,. Antara Choudhury, adv. …for the petitioner Mr. Vipul Kundalia, adv. Mr. Anurag Roy, adv. …for the income-tax Heard learned advocates appearing for the respective parties. Petitioner has approached this writ court being aggrieved by the impugned order dated April 19, 2022 relating to assessment year 2018-19 (Annexure P4/p.87)) rejecting its application under section 220(6) of the Income Tax Act, 1961 for stay of recovery proceedings during pendency of the appeal in question. It appears from record that already an order was passed by this court on March 15, 2022 in WPA No.4253 of 2022 in the case of the petitioner directing disposal of the pending appeal in question arising out of the assessment order in question within three months. It appears from the impugned order dated April 19, 2022 that the assessing officer has asked the petitioner to pay 20% of the disputed demand of Rs.5,78,06,543/- while the petitioner has paid only Rs.10,00,000/- which is 1.72% of the outstanding demand in question.

2 Considering the submission of the parties, this writ petition being WPA No.8527 of 2022 is disposed of by directing the assessing officer concerned not to take any coercive action against the petitioner, if the petitioner pays 10% of the disputed demand, after adjusting with Rs.10,00,000/- which has already been paid, within ten days from date. In case of default of payment in the above terms, the assessing officer concerned will be free to proceed in the matter. Since this writ petition has been disposed of without calling for affidavits from the respondents, allegations contained in the writ petition shall be deemed to have been denied by them. [Md. Nizamuddin, J]

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