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1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH Dated this the 16th day of March 2020 Before THE HON’BLE MR. JUSTICE B.M. SHYAM PRASAD Writ Petition No.145539/2020 (T-IT)
BETWEEN
SHRI SHANTISAGAR CO-OP CREDIT SOCIETY LTD., O, KANCHAGAR GALLI, HUBBALLI-580028, KARNATAKA, INDIA. (REPRESENTED BY MR. MAHAVEER SATYAPPA DUMMANAVAR, AGED ABOUT 64 YEARS, S/O SATYAPPA JINNAPPA DUMMANAVAR).
...PETITIONER
(BY SRI. SHASHANK S. HEGDE & SRI. NARENDRAKUMAR J., & SMT. PREETI SHASHANK, ADVOCATES)
AND
THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 C. R. BUILDING, NAVANAGAR, HUBBALI-580025
THE INCOME TAX OFFICER WARD 2(3), C. R. BUILDING, NAVANAGAR, HUBBALI-580025. ...RESPONDENTS
(BY SRI. Y.V.RAVIRAJ, ADVOCATE FOR R1 & R2)
This Writ Petition is filed under Articles 226 & 227 of the Constitution of India praying to quash as far as the petitioner is concerned by an appropriate writ or order in the nature of certiorari or otherwise the impugned letter dated 26.02.2020 issued by the learned first respondent rejecting the stay petition for the AY 2017-18 enclosed in Annexure-A vide F.No.Stay Petition/Pr.CIT-HBL/2019- 20; quash as far as the petitioner is concerned by an appropriate writ or order in the nature of certiorari or otherwise the impugned letter dated 23.01.2020 issued by the learned second respondent to the petitioner directing to pay 20% of the total demand raised for the AY 2017-18 enclosed in Annexure-B vide DIN & LETTER NO.ITBA/COM/F/17/ 2019-20/1024164328(1) and etc.
This Writ Petition coming on for Preliminary Hearing, this day, the Court made the following:
ORDER
The learned counsel for the petitioner and the learned counsel, Sri Y.V.Raviraj, who accepts notice for respondents Nos.1 and 2 are heard.
The petitioner is aggrieved by the order dated 26.02.2020 passed by the Principal Commissioner of Income-Tax, Hubballi, rejecting his application for stay without the minimum deposit of 20% of the demand. Though the Principal Commissioner of Income-Tax has rejected the petitioner’s application by order dated
3 26.02.2020, she has permitted the petitioner to deposit the minimum of 20% of the demand in two installments with the first 10% of the demand being payable immediately, and the balance demand on or before 25th March 2020.
The petitioner’s grievance is that the Principal Commissioner of Income-tax has rejected the petitioner’s application for stay without the minimum deposit of 20% ignoring Instruction No.1914 and the subsequent official memorandum/ Circular dated 29.02.2016. The learned counsel for the petitioner submits that the Principal Commissioner of Income-Tax in the light of Instruction No.1914 and the subsequent official memorandum/ Circular dated 29.02.2016, while considering an application for stay, had to consider whether the assessment by the Assessment Officer is an unreasonably High-Pitched assessment and whether the petitioner is put to genuine hardship because of such assessment. The learned counsel for the petitioner relies upon the decision
4 of this Court in Flipkart India (P.) Ltd. Vs. Assistant Commissioner of Income-tax, Circle 3(1)(1), Bengaluru1 in support of his submissions in this regard.
This Court in the case of Flipkart India (P.) Ltd., while considering the question whether the Official Memorandum/Circular dated 29.02.2016 is issued in supersession of Instruction No.1914 and whether the Assessment Officer/Principal Commissioner, Income-Tax, should consider the request for stay in the light of the Instruction No. 1914 and the subsequent Official Memorandum/Circular dated 29.02.2016, has held as follows: “16. ………..……………………… Therefore, while dealing with an application filed by an assessee, both the Assessing Officer, and the Prl. CIT, are required to see if the assessee’s case would fall under Instruction NO.2B(iii) of Circular NO.1914, or not? Both the Assessing Officer, and the Prl. CIT, are required to examine whether the assessment is “unreasonably highpitched”, or
1 [2017]79 taxmann.com 159 (Karnataka)
5 whether the demand for depositing 15% of the disputed demand amount “would lead to a genuine hardship being caused to the assessee” or not?”
It is incumbent on the Principal Commissioner of Income-Tax to decide on the application for stay considering two questions viz., whether the assessment is unreasonably high-pitched and whether the petitioner would be put to genuine hardship because of such assessment. However, in the present case, the Principal Commissioner’s order is a non-speaking order without considering either the question of High-Pitched Assessment or the genuine hardship to the petitioner. Therefore, the impugned order will have to be quashed on this limited ground and the petitioner’s application restored/ remanded for reconsideration.
At this stage, the learned counsel for the respondents submits that if the petitioner were to appear before the Principal Commissioner of Income-Tax,
6 Hubbali on 19th March 2020, the petitioner will be heard afresh on the merits of its application for stay and exemption from deposit of the minimum of 20% of the demand.
For the foregoing, the writ petition is partly allowed quashing the order dated 26.02.2020 restoring the petitioner’s application for stay for reconsideration in accordance with the decision of this Court in Flipkart India’s case, requiring the petitioner to appear before the Principal Commissioner of Income-Tax, Hubballi, on 19th March 2020 without further notice. The petitioner is reserved with liberty to urge all grounds in support of such application.
The writ petition is allowed accordingly.
Sd/- JUDGE Kms