TMI Blog2008 (5) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... on dated 17 th September, 2001 conferring the powers and functions of an Assessing Officer on Joint Commissioners of Income Tax which by virtue of Section 2(28C) of the Act includes an Additional Commissioner of Income Tax. 4. Under these circumstances, the return of the Assessee for assessment year 2005-2006 was taken up for consideration by the Additional Commissioner of Income Tax. The returned income was ₹ 7.5 crores and on 31 st December, 2007 the Additional Commissioner assessed the income at ₹ 58.68 crores. There was, therefore, an eight-fold increase between the returned income and the assessed income. The tax liability on the assessed income works out to about ₹ 25.01 crores. 5. Feeling aggrieved by the assessment order, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] on 31 st January, 2008. 6. On 1 st February, 2008, the Assessee moved an application before the Assessing Officer (the Additional Commissioner) requesting for a stay of the enforcement of the tax demand. This application was moved under Section 220(6) of the Act which reads as follows: - 220. When tax payable and when assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessee had earlier deposited ₹ 1 crore in two installments towards the tax liability. It was also pointed out that the request of the Assessee was for a stay of the demand in its entirety till the disposal of the appeal before the CIT (A). 13. The letter dated 3 rd March, 2008 was followed up by another letter dated 19 th March, 2008 addressed to the Deputy Commissioner in which the Assessee stated that the direction to deposit 15% of the tax liability is an ad-hoc direction and even though the Assessee was entitled to a stay, but with a view to avoid litigation, the Assessee was agreeable to pay 15% of the tax as ordered by the Deputy Commissioner, but it was requested that the Assessee may be permitted to make the deposit in installments. 14. Since there was no immediate response to its latest request, the Assessee apprehended some coercive action to recover the balance amount of tax and so it approached this Court with the present writ petition. 15. On 27 th March, 2008 when the matter was taken up for preliminary hearing, it was contended by learned counsel for the Petitioner that the Assessing Officer of the Assessee is the Additional Commissioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting that the entire tax amount of about ₹ 25.01 crores be paid. The attitude of the Revenue is, its all or nothing. Faced with this situation, we are left with no alternative but to proceed to hear the writ petition on merits. 21. An Assessing Officer is defined in Section 2(7A) of the Act as follows: - (7A) Assessing Officer means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act. 22. A perusal of the above would show that an Assessing Officer is a person who is vested with relevant jurisdiction by virtue of an order passed under Section 120(1) or Section 120(2) of the Act. An Additional Commissioner can also be an Assessing Officer if he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, learned counsel for the Assessee relied upon a decision of the Calcutta High Court in Berger Paints India Limited others vs. Assistant Commissioner of Income Tax others, [2000] 246 ITR 133. The Calcutta High Court had explained the meaning of the expression concurrent to mean two authorities having equal powers to deal with a situation but the same work cannot be divided between them. This is what the Calcutta High Court had to say: - Concurrent jurisdiction means a sub-ordinate authority can deal with the matter equally with any superior authority in its entirety so that either one of such jurisdictions can be invoked. It cannot be construed as concurrent jurisdiction when one part of the assessment will be dealt with by one superior officer and the other part will be dealt with by one subordinate officer. 29. It appears to us quite clearly that there is a distinction between concurrent exercise of powerand joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise the power by any one of those authorities, that exercise must be terminated by that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power conferred upon him by Section 220(6) of the Act. The power under Section 220(6) of the Act being a statutory power, the Additional Commissioner could not abdicate or relinquish it. That apart, we find that the Additional Commissioner had no authority in law to delegate his power to the Deputy Commissioner when he was conferred a statutory power by the CBDT. The principle of delegatus non potest delegare would clearly apply. It is only the CBDT or the Commissioner who could have divested the Additional Commissioner of the power to deal with an application under Section 220(6) of the Act. The Additional Commissioner could not suo motu divest himself of this power and confer it upon a junior functionary such as the Deputy Commissioner he had no such authority 33. Under the circumstances, we are of the opinion that learned counsel for the Assessee is right in his contention that the application filed by the Assessee on 1 st February, 2008 was required to be dealt with only by the Assessing Officer, which in this case was the Additional Commissioner. 34. Learned counsel for the Revenue submitted that by addressing further letters to the Deputy Commissioner on 8 th Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also, we are of the opinion that the order dated 27 th February, 2008 must be struck down. 38. Learned counsel for the Assessee submitted that the order dated 27 th February, 2008 does not contain any reason and was passed without giving an opportunity of hearing to the Assessee. We need not go into this aspect because ex facie the Deputy Commissioner proceeded on the basis of consent having been given by the Assessee. If it is true that the Assessee had given consent, there is no question of giving a hearing to the Assessee nor is there any occasion for the Deputy Commissioner to give reasons but since we have found that no such consent was given by the Assessee, the very basis of the order dated 27 th February, 2008 falls through, and it must be set aside on that ground. 39. Learned counsel for the Assessee also took us to the merits of the assessment order with a view to show that prima facie the demand was unreasonable in as much as the Assessee was not given a proper hearing before the assessment order was framed. We are not inclined to delve into this issue because that is a matter which has to be decided by the CIT (A) but we may note (for the purposes of only dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave interpreted the aforesaid Instruction in the way that we have read it. Some of these decisions are N. Rajan Nair v. Income Tax Officer and another, [1987] 165 ITR 650 (Kerala), Mrs. R. Mani Goyal v. Commissioner of Income Tax and another, [1996] 217 ITR 641 (Allahabad) and I.V.R. Construction Ltd. v. Assistant Commissioner of Income Tax and another, [1998] 231 ITR 519 (Andhra Pradesh). 43. Under the circumstances, we are of the view that the Assessee would, in normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction. 44. Finally, learned counsel for the Assessee has pointed out, and we are of the view that he is correct in his submission, that the stand of the Revenue seems to be that the petition for stay filed by the Assessee is still pending and, therefore, we should direct the Assessee to appear before the Deputy Commissioner for a hearing of the stay petition. 45. Apart from the fact that we have found that the Deputy Commissioner has no jurisdiction to hear the stay petition, we find it odd that the Revenue is seeking to enforce the demand when the petition for stay is still pending. It is rather unfortunate that instead ..... X X X X Extracts X X X X X X X X Extracts X X X X
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