TMI Blog2024 (2) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... es which has ruined the business completely. The revenue authorities have considered the application submitted by the petitioner and granted relief to the petitioner by directing monthly installment of Rs. 13,85,000/- which cannot be said to be arbitrary or suffers from non-application of mind. Even the record would show that the assessment order for the assessment year 2018-19 was passed on 28.03.2023 and more than 10 months have been lapsed, the petitioner is not taking recourse by filing an application for stay before the CIT(A) who is empowered under Section 246 of the Income Tax Act to waive the pre-deposit of 20%. Thus, considering that the ACIT and PCIT have exercised their discretionary power by granting installment facilities 9 and 20 installments respectively, we not find that any irregularity or illegality has been committed by the revenue authorities. Accordingly, the writ petition deserves to be and is hereby dismissed. - HON BLE SHRI NARENDRA KUMAR VYAS, J. For the Petitioner : Mr. Neelabh Dubey, Advocate For the Respondents : Ms. Naushina Afrin Ali, Advocate CAV ORDER 1. The present petition has been filed by the petitioner under Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of filing the original return on 24.10.2018 which was Rs. 26,93,557/-, as such, it is high pitched assessment. Against this assessment, the Petitioner filed an application for grant of stay against the recovery of outstanding demand under Section 220(6) of before ACIT, Central Circle, Bilaspur. In its application, the Petitioner contended that the assessment is an extremely high-pitched assessment where even the payment of 20% of the total tax demand would not be possible as even 20% of the total tax demand comes to Rs. 2,76,88,710/- which is 10.27 times of the returned income. The Petitioner has also mentioned its financial difficulties in the said application. It has been further contended that if the Petitioner Company is forced to pay 20% of the huge tax demand, it would financially ruin the business. 3. It has also been contended that the said application was rejected on 03.07.2023 by the ACIT and directed the Petitioner to make partial payment of 20% of the tax demand with an arrangement where Petitioner Company was required to pay a monthly installment of Rs. 30,73,524/- to be paid before 15th of every month starting from July, 2023 till March, 2024. Against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed orders and would pray for exemption from paying 20% of the assessed amount of tax. 5. To substantiate his submission he has relied upon the order dated 03.05.2017 passed by this Court in W.P. (T) No.66/2017 {Sanjay Kumar Kochhar vs Asst. Commissioner, Income Tax and Another}. He would further submit that it is an accepted principle across the tax jurisprudence that circular issued by the Central Board of Direct Taxes is binding on the revenue authorities as such it is incumbent upon them to follow the circulars and should have granted exemption from payment of 20% of the tax being high pitched assessment. 6. Learned counsel for the petitioner has referred to the judgment in case of Taneja Developers and Infrastructure Ltd. v. Assistant Commissioner of Income Tax, Delhi Ors, (2010) 324 ITR 247 , wherein Hon ble High Court of Delhi relying on the above circular, dealt with the concept of high pitched assessment in detail. The relevant paragraphs of the said decision read as under: A perusal of paragraph 2 of the aforesaid extract would show that where the income determined is substantially higher than the returned income, that is, twice the latter amount or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the assessing authority has also considered the transaction with proprietor and proprietorship concerned. The assessing authority has also issued notice under Section 133(6) of the Income Tax Act to the related parties and also considered their replies, thereafter the assessment order was passed, as such, the petitioner cannot claim waiver from depositing 20% of the assessed amount and it cannot be said that it is high pitched assessment. It is based upon the factual matrix placed before the assessing authority. She would further submit that in WPT No. 118/2019 vide order dated 05.09.2019 the prayer for stay of recovery of tax assessed under the relevant provisions of Income Tax Act being high pitched assessment has been rejected. The assessee has preferred Writ Appeal No. 584/2019 wherein the Hon ble Division Bench has affirmed the order vide judgment dated 19.12.2019. She would further submit that ACIT has also granted installment facility to the petitioner and the said order has been affirmed by the PCIT vide order dated 11.12.2023 by further reducing the installment to the tune Rs. 13,85,000/- per month which is just and proper and does not warrant interferenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials in cash. However, not a single evidence of cash purchase could be produced during survey. No bifurcation of stock of raw materials in number of related parties have been found during survey. The assessing authority has also recorded its finding that the assessee has adopted similar modus operandi in the claim of purchase from related parties. The petitioner was given notice and reply was submitted which has been considered by the assessing authority, thereafter order was passed. The assessing authority has also recorded its finding that onus of proof lies upon the assessee but he has not discharged the same. The assessing authority has also recorded its finding that assessee has refused to acknowledge stock discrepancies during survey as he has refused to sign the measurement and stock valuation made by third party. The assessing authority has also recorded its finding that the related parties do not have trading activity of husk and bran. Thus, there was sufficient material before the authority to pass the assessment order. 12. The learned counsel for the petitioner would submit that since it is a high-pitched assessed tax as 51 times of the original tax deposited at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand / recovery by virtue of the Circulars as mentioned above; which have been issued as standardization of the procedure, of course as a matter of policy. But this power is specifically conferred upon the Assessing Officer, who passed the assessment order or the Higher Departmental Authorities as mentioned in the Circulars. This obviously is different from the power of the Appellate Authority to grant stay in appropriate cases with or without any conditions. There is no case for the Appellant that he has filed any application for stay before the Appellate Authority i.e. the 2nd Respondent or that it has been rejected. The Statutory Authority for considering and deciding the appeal (the 2nd Respondent) or the power of the Appellate Tribunal to consider the correctness of such orders passed by the Appellate Authority in terms of the provisions under the IT Act cannot be said as governed by the Circulars and it is always open for the Appellate Authority to grant even absolute stay in appropriate cases, if such circumstances are established by the Appellant. It is not a case where any pre-deposit is insisted so as to entertain the appeal or the application for interim stay (f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to be raised/ persuaded, which cannot affect the statutory power conferred upon the appellate authority. 16. Now coming to the facts of the case, it is quite vivid that the ACIT while considering the request made by the petitioner for waiver of pre-deposit of 20% of assessed tax liability under Section 220(6) of the Income Tax Act has granted installment facility to the petitioner to deposit Rs. 30,73,524/- per month which is payable before 15th of every month starting July, 2023 till March, 2024 and PCIT vide order dated 11.12.2023 has reduced installment amounting to Rs. 13,85,000/- for 20 months till such installment reaches 20% of the total tax liability amounting to Rs. 13,84,43,552/- or till the disposal of the appeal by CIT(Appeals) whichever is earlier. The PCIT has further directed petitioner to deposit first installment of Rs. 13,85,000/- on 20.12.2023 and remaining installments by 20th of every month from month of January, 2024. 17. From the record it is quite vivid that the revenue authorities have considered the grievances of the petitioner by granting monthly installment Rs. 13,85,000/- from December, 2023 and the record of the case would clearly demonstrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and more than 10 months have been lapsed, the petitioner is not taking recourse by filing an application for stay before the CIT(A) who is empowered under Section 246 of the Income Tax Act to waive the pre-deposit of 20%. 19. The issue of waiver of pre-deposit of 20% of assessed tax legality has come up for consideration before the Hon ble Supreme Court in case of Principal Commissioner of Income Tax 5 and Others vs L.G. Electronics {(2018) 18 SCC 447} wherein the Hon ble Supreme Court has held as under:- 2. Having heard Shrit Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving credence to the fact that he has argued before us that the administrative circular will not operate as a fetter on the Commissioner since it is a quasi-judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal. 20. The authorities have exercised their discretionary power considering the factual matrix, after giving opportunity of hearing which cannot be said to be arbitrary or suffers non application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olourable glosses and pretences, and not to do according to the will and private -affections of persons. 31. The word discretion standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word in itself implies vigilant circumspection and care: therefore, where the Legislature concedes discretion it also imposes a heavy responsibility. 22. The Hon ble Supreme Court in case of Assistant Commissioner (CT) LTU, Kakinada vs Glaxo Smith Kline Consumer Health Care Limited {(2020) 19 SCC 681} has held as under:- 16. Indubitably, the powers of the High Court under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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