2020 (5) TMI 262 - HC - Income Tax

Stay petition - petitioner has filed an application before the PCIT seeking review of the order rejecting application for stay - HELD THAT - The question of intervening as regards to the assessment order at this stage is not appropriate. However as regards the contention that the consideration of application for stay and further exercise of power of the PCIT keeping in mind the circular bearing No.1914 as amended on 21.5.2017 29.2.2016 and 31.7.2017 the request of the petitioner is to be considered in a meaningful manner. Power of granting stay has been considered by the High Court of Judicature at Madras in the case of M/s. Shriram Finance 2019 (3) TMI 1478 - MADRAS HIGH COURT wherein certain guidelines have been referred to in para-5 which may be taken note of. So also the manner of exercise of power of the Principal Commissioner of Income Tax is detailed in Flipkart s case 2017 (3) TMI 802 - KARNATAKA HIGH COURT which needs to be kept in mind. This Court refrains from expressing any opinion on the merits of contentions raised but reiterates that the PCIT is to exercise power conferred upon him as per the circulars in a meaningful manner. The petitioner to be present before the Principal Commissioner of Income Tax and the request of petitioner as contained in the representation dated 05.02.2020 would be disposed of in light of the observations made above. PCIT to dispose of the representation of the petitioner within a period not later than one week from the date of appearance of the petitioner.

Summary

Issues:
1. Petitioner seeking writ of mandamus and certiorari regarding notice of demand and stay of assessment order.
2. Allegation of lack of meaningful consideration of application for stay.
3. Contention regarding disposal of stay application in light of relevant Circulars and court judgments.
4. Revenue's argument of prematurity of petition and assurance of consideration of representation.
5. Consideration of application for stay and exercise of power by Principal Commissioner of Income Tax.
6. Petitioner's submission of application for review of order rejecting stay.
7. Direction for petitioner to appear before Principal Commissioner of Income Tax for disposal of representation.
8. Timeframe for disposal of representation by Principal Commissioner of Income Tax.

Analysis:
The petitioner sought a writ of mandamus to direct the respondent not to enforce a notice of demand until the appeal by another respondent was disposed of. Additionally, the petitioner requested a writ of certiorari to quash the communication rejecting the stay request. The petitioner argued for a stay of the assessment order, claiming a lack of meaningful consideration in the rejection, which required disposal in light of Circulars and court precedents. The Revenue contended the petition was premature, assuring consideration of the petitioner's representation. The Court emphasized the need for a meaningful consideration of the stay application, citing relevant Circulars and court judgments. The petitioner submitted an application for review of the stay rejection, leading to a direction for the petitioner to appear before the Principal Commissioner for disposal of the representation within a week.

The Court refrained from expressing an opinion on the merits but stressed the need for the Principal Commissioner to exercise power as per Circulars in a meaningful manner. The judgment highlighted the importance of examining whether the assessment was unreasonably high or the deposit requirement would cause genuine hardship to the assessee. The Court directed the Principal Commissioner to dispose of the representation within a week of the petitioner's appearance, keeping all contentions open. Ultimately, the petition was disposed of in accordance with the outlined directions and considerations.