What did the High Court hold?

The High Court found that the revision authority's order was non-speaking and failed to consider the petitioner's arguments regarding high-pitched assessment and genuine hardship. The court quashed the revision order and restored the matter for reconsideration.

The petitioner challenged the rejection of their application for waiver of statutory deposit pending appeal and a subsequent revision order. The petitioner argued that the assessment was high-pitched and caused genuine hardship, and that the revision order was non-speaking.

What were the issues?

Whether the revision authority's order rejecting the waiver of statutory deposit was non-speaking and failed to consider relevant instructions and arguments of hardship.

M/S Karavali Freezers and… vs PCIT | Karnataka High Court 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17TH DAY OF MARCH 2022

BEFORE

THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD

WRIT PETITION NO.4875/2022 (T-IT)

BETWEEN :

M/S KARAVALI FREEZERS AND EXPORTERS HAVING OFFICE AT 1-120(4) SHIVAM, NEAR KEB OFFICE CHITRAPADY, SALIGRAMA – 576 225. REPRESENTED BY ITS PARTNER, MR.UDAYA SHETTY. ... PETITIONER

(BY SRI GAUTAM SHREEDHAR BHARADWAJ, ADVOCATE)

AND :

THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), 3RD FLOOR, C.R.BUILDING, QUEEN’S ROAD, BANGALORE – 560 001.

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, ALBUQUERQUE HOUSE, OPP. FORUM MALL, PANDESHWARA, MANGALURU – 575 001. ... RESPONDENTS (BY SRI.K.V. ARAVIND, ADVOCATE)

2 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 28.07.2021 BEARING NO. ITBA/RCV/F/17/2021-22/1034466780(1) AND 16.11.2021 BEARING NO. ITBA/ASK/F/73/2021-22/1036971947(1) PASSED BY THE RESPONDENT AUTHORITY VIDE ANNEXURE-B AND K RESPECTIVELY.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:- O R D E R

The petitioner has impugned the Assessing Officer’s [the second respondent and referred to as the AO] order on waiver of the statutory deposit pending appeal and the order in revision. The AO’s order is dated 28.07.2021 [Annexure-B] and the order in revision by the first respondent is dated 16.11.2021 [Annexure-K].

The learned counsel for the petitioner submits that the petitioner has impugned the High Pitched assessment and the petitioner’s appeal is pending consideration. Insofar as the statutory deposit,

3 the petitioner, as is required in law, has submitted necessary application before the AO for waiver which is rejected, and the petitioner’s revision petition is also rejected but affording four equal monthly installments subject to the condition that these four equal installments must be paid before 28.02.2022.

The learned counsel further submits that in terms of the instructions issued by the concerned viz., Instruction dated 02.02.1993, the first respondent can interfere with the AO’s order on deposit in exceptional circumstances viz., where assessment order appears to be unreasonably high pitched or where there is genuine hardship caused to the assessee. Though subsequent instructions are issued wherein certain terms of the Instructions dated 02.02.1993 are modified, the aforesaid instructions remain undisturbed. It has been consistently held by the Courts based on these instructions that the first respondent must examine a

4 request as against the two requirements. But in the present case, the first respondent by a non speaking order, has rejected the petitioner’s application. Neither the high pitched nature of the assessment nor the question of genuine hardship is examined.

The learned counsel for the respondents is unable to contest the argument based on the Instructions and the arguments that the first respondent’s impugned order is a non speaking order. In which event, the first respondent’s order must be quashed and the petition restored for reconsideration observing that the petitioner’s request must necessarily be considered in the light of the Instructions dated 02.02.1993 more specifically Instruction-B sub-rule[iii]. Therefore the following: ORDER

[a] The petition is allowed in part and the order bearing No.ITBA/ ASK/F /73/

5 2021-22/1036971947[1] of the first respondent – the revision authority [Annexure-K] is quashed.

[b] The proceedings are restored to the First respondent for reconsideration as aforesaid. The petitioner shall appear, without further notice, before the first respondent on 11.04.2022.

[c] It is needless to observe that the proceedings being restored, no coercive measures shall be taken for enforcing deposit of 20% until the conclusion of the proceedings before the first respondent.

SD/-

JUDGE

AN/-

M/S KARAVALI FREEZERS AND EXPORTERS vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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