TMI Blog2015 (3) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ef as sought for by this Court is entertained, the authority cannot be expected to comply with the direction unless and until the earlier order is set aside. Admittedly, the petitioner has not filed the present writ petition for grant of Writ of Certiorarified Mandamus. Therefore, on this ground, this Court is of the view that the relief sought for by the petitioner cannot be granted. - Decided against assessee. - The Honourable Mr. Justice S. Vaidyanathan,J. - - - Dated:- 23-2-2015 - The Honourable Mr. Justice S. Vaidyanathan,J. For the Petitioner : Mr. Venkataraman, SC for Mr. K. Harishankar For the Respondents : Mr. K. Promod Kumar Chopda ORDER This Writ Petition has been filed, praying for the issuance of a writ of Mandamus, to direct the respondents to stay the entire disputed outstanding demand of ₹ 10,00,00,000/- and also grant interim injunction restraining the respondents from taking coercive action in recovering the demand pursuant to order, dated 28.01.2015 for assessment year 2010-11, pending disposal of the appeal by the CIT (A). 2. Shorn of all unnecessary details, the fact of the matter is as under: The petitioner company is an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by invoking explanation (7) to Section 271(1) (c) of the Act, penalty proceedings were initiated in respect of adjustments made by the Transfer Pricing Officer under Section 92CA(4) of the Act. By proceedings, dated 28.11.2014, the first respondent, imposed penalty in terms of Section 271(1)(C) of the Act, for furnishing inaccurate particulars and concealing the income in respect of all the disallowances as stated above. It has been held by the first respondent that the petitioner company had intentionally and willfully made an incorrect claim, which warrants levy of penalty leviable 300% of the tax, which comes to ₹ 23,85,94,851/-, however, considering the facts of the case, the first respondent imposed penalty at ₹ 10,00,00,000/-. 3. Being aggrieved by the said imposition of penalty, the petitioner company preferred an appeal under Section 246A of the Act before the Commissioner of Income Tax (Appeals), Chennai. Pending disposal of the appeal, the petitioner moved a stay petition under Section 220(6) of the Act before the Deputy Commissioner of Income-tax, the first respondent herein. By proceedings, dated 28.1.2015, the first respondent has disposed of the stay a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut that the petitioner has not concealed the particulars of the income or deliberately furnished inaccurate particulars of such income, which warrants levy of penalty under Section 271(1)(c) of the Act. The learned senior counsel contended that already the petitioner has preferred the appeal challenging the order of the first respondent passed under Section 271(1)(c) and the petitioner is having a good case and there would be fair chances in succeeding the appeal and therefore, when the issue regarding the liability of payment of penalty imposed by the first respondent is the subject matter pending in the form of appeal before the 1st respondent, wherein, the finality would reach on disposing of the said appeal, there is no justification for the 1st respondent in granting the partial interim stay of outstanding demand of ₹ 5,00,00,000/- instead of entire outstanding demand of ₹ 10,00,00,000/-. Therefore, the learned senior counsel would contend that though the said order was not challenged, considering the peculiar circumstances of the case, this Court, while exercising its extraordinary jurisdiction under Article 226, can act ex debito justitiae and render real and sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is relevant to extract the Section 220(6) of the Act, which reads as under: 220. When tax payable and when assessee deemed in default. (1) to (5) (6) Where an assessee has presented an appeal under Section 246 1 [or Section 246A,] the 2 [Assessing] Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of. 12. A perusal of the above, it is explicit that the authority has been conferred with the power to treat the assessee as not being in default in respect of the amount in dispute in the appeal, however subject to conditions as he may think fit to impose. The word as he may think fit to impose if read harmoniously, it would definitely mean that the power vested in the authority is amplitude and wide enough and can be exercised according to his discretion. In fact, the above said provision enables the authority only to treat the assessee as not being in default in respect of amount in dispute in the appeal, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its executions and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. 14. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that, if the Appellate Tribunal proceed to stay recovery of taxes or penalties payable by or imposed on the assessee as a matter of course, the revenue will be put to grant loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunal. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich does not warrant interference. It is settled law that if the Tribunals or the functionaries appointed under the special Acts do not perform their duties, they may be compelled by an appropriate writ to do so. Where, however, they are acting within the limits of the powers assigned to them by the Legislature and have exercised their discretion in a justifiable and reasonable manner, this Court will not sit in judgment over them and will not ordinarily interfere unless the discretion has been exercised so capriciously or in such an outrageous manner so as to attract the extraordinary jurisdiction of this Court. 16. Discretion has been defined as the freedom or authority to make judgments and to act as one sees fit, i.e. to say free exercise of power as regards the ability to choose from different ways to achieve a particular goal or result. Administrative discretion would mean choosing from various available alternatives but with reference to rules of reasons and justice and not according to personal whims. Invariably, in all systems of jurisprudence, it is an accepted norm that the Court will not interfere with the action pursued by such authorities in exercise of their admin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the objects intended by the legislature. These dicta may be summed up in the statement of Lord Esher that the discretion must be exercised without taking into account any reason which is not a legal one. If people who have to exercise a public duty by exercising their discretion take into account matters which the courts consider not to be proper for the guidance of their discretion, then in the eye of the law they have not exercised their discretion. The result of the aforesaid passages may be stated thus : The discretionary statutory power conferred upon an authority for the public good is coupled with a duty to perform it under relevant circumstances. The fact that the exercise of the power is left to the discretion of the authorised person does not exonerate him from discharging his duty. If the discretionary power so conferred is exercised arbitrarily, capriciously or unreasonable or by taking into consideration extraneous and irrelevant consideration, in the eye of law, the authority concerned must be deemed not to have exercised the discretion at all, that is, he has not discharged his duty. If the Court on the facts placed before it comes to a definite conclusion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to enable an assessee who has preferred an appeal, to obtain from the appellate forum, a stay of collection of the tax, either in whole or in part, on furnishing suitable security, is a matter for the legislature to consider. The above decision was also extracted by the Hon ble Supreme Court in its decision reported in ITO versus M.K.Mohammed Kunhi reported in AIR 1969 SC 430. 19. Further, it is a settled principle of law that the writ Court is not certainly sitting in appeal over each and every order passed by the statutory authority. The task of the writ Court to examine the decision-making process was found in the decision reported in State of UP versus Maharaja Dharmedar Prasad Singh reported in AIR 1989 SC 997. The writ Court is averse to interfere with the acts and actions of the statutory authorities unless those are beyond jurisdiction or in excess of jurisdiction. The Writ Court will certainly interfere if the impugned orders are contrary to the principles of natural justice causing effect manifest injustice. Unless those ingredients are present, the Writ Court will be slow to interfere in the matter. 20. In view of the above discussion, this Court is of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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