BADAGABETTU CREDIT vs. COMMISSIONER OF INCOME TAX (APPEALS)

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WP/13678/2022HC KarnatakaKAHC01030272202201 September 2022Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, without expressing any opinion on the merits or demerits of the rival contentions, deemed it just and appropriate to dispose of the writ petition. The Court directed the Deputy Commissioner of Income Tax (R-2) to consider and pass appropriate orders on the application/representation/request dated 25.04.2022 (Annexure-E) submitted by the petitioner under Section 220(6) of the IT Act, in accordance with the law, within a period of four weeks from the date of receipt of a copy of the order. Furthermore, the Court directed that until R-2 considers and passes appropriate orders on the said representation, the respondents shall not take any precipitative or coercive steps against the petitioner pursuant to the assessment order dated 30.03.2022 (Annexure-A) and the notice dated 23.05.2022 (Annexure-F). The petition was disposed of subject to these directions. No specific issue was left undecided; rather, the Court provided a procedural direction for the pending applications.

What were the facts?

The petitioner, Badagabettu Credit Co Operative Society Ltd, is challenging an assessment order dated 30.03.2022 passed by the Deputy Commissioner of Income Tax (R-2). Following this order, the petitioner filed an appeal with the Commissioner of Income Tax (Appeals) (R-1) on 25.04.2022, along with an application for stay. The petitioner also filed an application under Section 220(6) of the Income Tax Act before the Assessing Authority (R-2) requesting that the demand be kept in abeyance pending the appeal's disposal. The petitioner's grievance is that neither respondent has considered their requests, and R-2 has issued a notice dated 23.05.2022 demanding 20% of the tax amount. The petitioner has approached the High Court seeking to quash the assessment order or, alternatively, to direct the respondents not to demand tax until the appeal is decided and to expedite the appeal's disposal.

What were the issues?

1. Whether the High Court should quash the assessment order dated 30.03.2022 passed by the Deputy Commissioner of Income Tax (R-2) under Article 226 of the Constitution of India. 2. Whether the respondents should be directed not to demand any pre-deposit or tax from the petitioner until the disposal of the appeal filed before the Commissioner of Income Tax (Appeals) (R-1). 3. Whether the Commissioner of Income Tax (Appeals) (R-1) should be directed to dispose of the petitioner's appeal within two months. Contentions of the Petitioner: The petitioner argues that they have taken necessary steps by filing an appeal and invoking Section 220(6) of the IT Act. They contend that their requests for keeping the demand in abeyance are not being considered, and they are being pressured to pay 20% of the demand. They seek intervention from the High Court to quash the assessment order or to direct the respondents to stay the demand and expedite the appeal. Contentions of the Revenue: The revenue submits that there is no merit in the petition and it is liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 220(6)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 01st DAY OF SEPTEMBER 2022

BEFORE

THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR

WRIT PETITION No.13678 OF 2022 (T-IT)

BETWEEN:

BADAGABETTU CREDIT CO OPERATIVE SOCIETY LTD H. O. CHETHANA BUILDING, MISSION COMPOUND UDUPI 576101, REP BY MR RAJESH, GENERAL MANAGER I/C.

…PETITIONER (BY SRI.MAHESH R UPPIN., ADVOCATE)

AND:

1.

COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO 356, C R BUILDING, I P ESTATE, NEW DELHI 110002.

2.

DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -2, ALBUQUERQUE HOUSE OPP FORUM MALL PANDESHWARA, MANGALURU 575001. …RESPONDENTS (BY SRI.E.I. SANMATHI, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 30.03.2022 BEARING PA NO.AAAAB3065F PASSED BY THE R-2 VIDE ANNX-A.

THIS W.P. COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:-

2 ORDER In this petition, the petitioner has sought for the following reliefs: “[a] Quash the Assessment Order dt: 30.03.2022 bearing PAN No.AAAAB3065F passed by the 2nd respondent marked as ANNEXURE-A by issuing a writ in the nature of Certiorari;

OR IN THE ALTERNATIVE

Direct the respondents not to demand any pre- deposit or tax from the petitioner till the disposal of ANNEXURE-C appeal Dt: 25.04.2022 bearing PAN No.AAAAB3065F by the 1st respondent.

[b] issue a writ in the nature of mandamus by directing the 1st respondent to dispose off the appeal ANNEXURE-C filed by the petitioner within a period of two months; and

[c] grant such other reliefs as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice."

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3.

In addition to reiterating the various contentions urged in the petition and referring to the material on record, the learned counsel for the petitioner submits that pursuant to the reassessment order dated 30.03.2022 passed by the respondent No.2-Assessing Authority under Section 143[3] of the Income Tax Act, 1961 [for short, 'the IT Act'], the petitioner has filed an appeal in Form No.35 along with the application for Stay on 25.04.2022. In addition thereto, the petitioner has also filed application before the respondent No.2-Assessing Authority under Section 220[6] of the IT Act requesting the respondent No.2 to keep the demand in abeyance pending disposal of the appeal.

4.

It is the grievance of the petitioner that despite the petitioner taking necessary steps by preferring an appeal as well as by invoking Section 220[6] of the IT Act and requesting the respondent No.2 to keep the demand in abeyance, neither the respondent No.1 or the respondent No.2 are considering the request made by the petitioner nor the request for interim prayer sought for by the petitioner

4 and as such, the petitioner is before this Court by way of the present petition, particularly, when the respondent No.2 has issued a Notice dated 23.05.2022 calling upon the petitioner to pay 20% of the demand amount.

5.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

6.

Though several contentions have been urged by both sides in support of their respective claims in the present petition, in the appeal before the respondent No.1- Appellate Authority and also in the application at Annexure- E filed by the petitioner before the respondent No.2 under Section 220[6] of the IT Act, without expressing any opinion on the merits/de-merits of the rival contentions keeping the same open, I deem it just and appropriate to dispose of this writ petition directing the respondent No.2 to consider and pass appropriate orders on the application/representation/request dated 25.04.2022 at Annexure-E submitted by the petitioner in accordance with

5 law and at any rate within a period of four weeks from the date of receipt of a copy of this order.

7.

It is further directed that till the respondent No.2 considers and passes appropriate orders on the aforesaid representation dated 25.04.2022 at Annexure-E submitted by the petitioner referred to supra, the respondents shall not take any precipitative/coercive steps against the petitioner pursuant to Annexures-A and F dated dated 30.03.2022 and 23.05.2022 respectively.

Subject to the aforesaid directions, the petition stands disposed off.

SD/- JUDGE

AN/-

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