Bali Nagwanshi S/o Shri Butter Nagwanshi Aged About 59 Years R/o H.No. 87, Sun v. 1. Union Of India Through Its Secretary, Ministry Of Finance
Case Details
ASHISH TIWARI Digitally signed by ASHISH TIWARI Date: 2025.04.29 10:29:18 +0530 2025:CGHC:16566 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR W.P.(T) No. 64 of 2025 Bali Nagwanshi S/o Shri Butter Nagwanshi Aged About 59 Years R/o H.No. 87, Sun City, Dr. Shyama Prasad Mukherjee Ward, Lalbagh, Jagdalpur, Bastar, Chhattisgarh ---- Petitioner Versus 1. Union Of India Through Its Secretary, Ministry Of Finance, (Department Of Revenue), No. 137, North Block, New Delhi - 110001 2. Principal Chief Commissioner Of Income Tax (Mp And Cg), Bhopal, Aayakar Bhawan, 48, Arera Hills, Hoshangabad Road, Bhopal, Madhya Pradesh - 462011 3. Principal Commissioner Of Income Tax-1 Raipur, Having His Office At Central Revenue Building, Civil Lines, Raipur, Chhattisgarh - 492001 4. Assistant Commissioner Of Income Tax Central 1(1), Raipur, Having His Office At Central Revenue Building, Civil Lines, Raipur, Chhattisgarh - 492001 5. Commissioner Of Income Tax (Appeals) National Faceless Appeal Centre, Delhi --- Respondents For Petitioner
Legal Reasoning
6. This Court in case of Maa Danteshwari (Supra) has dealt with the identical issue and observed in paragraph-6 to 7 herein below:- “6. In the matter of M/s. Aarti (Supra), while deciding the similar issue, it was categorically held that the question is no longer res integra and the relevant paras of the said judgment read thus: “18. In my opinion, the said question is no longer res integra and it has been well settled by a decision of the Bombay High Court in the matter of KEC International Ltd. v. B.R. Balakrishnan and others in which S.H. Kapadia, J, as then His Lordship was speaking for the Bombay High Court, while considering the similar issue has laid down the following guidelines: “This is the consequence of an order being passed without giving any reasons. Hence, we intend to lay down certain parameters which are required to be followed by the authorities in cases where a stay application is made by an assesee pending appeal to the first appellate authority Parameters:” (a) While considering the stay application, the authority concerned will at least briefly set out the case of the assessee. (b) In cases where the assessed income under the impugned order far exceeds returned income, the authority will consider whether the assessee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given by the authority in its order. -5- (c) In cases where the assessee relies upon financial difficulties, the authority concerned can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the authority wants the assessee to so deposit. (d) The authority concerned will also examine whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order. (e) We clarify that if the authority concerned complies with the above parameters while passing orders on the stay application, then the authorities on the administrative side of the Department like respondent No.2 herein need not once again give reasoned order.” “19. The aforesaid guidelines have been followed later-on again by the Bombay High Court in the matter of UTI Mutual Fund v. Income Tax Officer 19(3)(2) and others in which Dr. D.Y. Chandrachud, J (as then His Lordship was) while following the decision rendered in KEC International Ltd. (supra) again held some more guidelines as under:- “These are, we may say so with respect, sage observations which must be borne in mind by the assessing authorities. Consistent with the parameters which were laid down by the Division Bench in KEC International and the observations in the judgment in Coca Cola6, we direct that the following guidelines should be borne in mind for effecting recovery : -6- 1. No recovery of tax should be made pending (a) Expiry of the time limit for filing an appeal; (b) Disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated. 2. The stay application, if any, moved by the assessee should be disposed of after hearing the assessee and bearing in mind the guidelines in KEC International; 3. If the Assessing Officer has taken a view contrary to what has been held in the preceding previous years without there being a material change in facts or law, that is a relevant consideration in deciding the application for stay; 4. When a bank account has been atStached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law; 5. In exercising the powers of stay, the Income Tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the AO has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order: the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue.” -7- “20. After having noticed the manner of disposing the appeal as highlighted by the Bombay High Court in the two judgments noticed herein-above and agreeing with the same, it would appear that the competent authority, in the instant case, while considering the application simply held that the appeal proceedings are separate and distinct from recovery proceedings and further proceeded to hold that 20% of the disputed demand has not been deposited in accordance with the guidelines dated 31-7-2017 and passed the order dated 7-3-2018. Thus, it is quite vivid that the application for stay of demand has not been considered in the manner it was required to be considered and dealt with. Deposit of 20% of the disputed demand has been made condition precedent for hearing the application for stay which is not contemplated either under the Act of 1961 or the CBDT guidelines dated 29-2- 2016 modified by the office memorandum dated 31-7-2017. It is only when the competent authority is of the opinion that the assessee has made out a case for grant of interim relief, stay can be granted subject to deposit of 20% of the disputed demand. Likewise, there is a further clause in the circular for reduction of 20% deposit if the petitioner makes out a case, it has also not been considered. In straightway, direction of deposit of 20% of the disputed demand has been made which is not the correct way of deciding the application for stay of the disputed demand.” 7. Since similar question is involved in this matter, the impugned order dated 20/02/2025 (Annexure P/2) is set aside and the matter is remitted to the competent authority who shall decide the review petition of the petitioner in accordance with law as per the guidelines as stated above and pass a reasoned -8- order preferably within a period of 4 weeks from the date of receipt of a copy of this order. 8. At this stage Shri Bejani submits that against the assessment order (Annexure /4), the petitioner has already preferred an appeal before the respondent No.5. Hence, respondent No. 5 may be directed to decide the appeal within a stipulated time. Shri Kumrani submits that all endeavor would be made to decide
Arguments
: Shri Nikhilesh Bejani and Shri Apurv Goyal For Respondent No.1 Advocates. : Shri Ramakant Mishra, Deputy Solicitor General with Shri Rishahbh Deo Singh, Advocate. For Respondent No.2 to 5 : Shri Ajay Kumarani, Advocate. -2- Hon'ble Shri Justice Sachin Singh Rajput Order on Board 25/04/2025 1. With the consent of the parties, the matter is heard finally at the motion stage. 2. This writ petition has been filed by the petitioner seeking for the following relief : 1] That, this Hon'ble Court may kindly be pleased to issue a writ/writs, direction/ directions, order/orders quashing the impugned order dated 06/12/2024 and order dated 20/02/2025 as being illegal, arbitrary, perverse and passed in violation of principles of natural justice, 2] That, this Hon'ble Court may kindly be pleased to issue a to the writ/writs, direction/ directions, order/orders to the Respondent authorities to stay the effect and operation of the impugned assessment order and demand notice, both dated 25/03/2024 as passed by Respondent No. 4, till the pendency of first appeal before Respondent No. 5; 3] That, this Hon'ble Court may kindly be pleased to issue a to the writ/writs, direction/ directions, order/orders to the Respondent authorities to restrain them from initiating any recovery from the Petitioner pursuant to assessment order dated 25/03/2024 till the pendency of first appeal before Respondent No. 5; 4] Alternatively, this Hon'ble Court may kindly be pleased to issue a writ in the nature of mandamus directing the Respondent No.5 to decide appeal filed by the petitioner at an earliest after giving due opportunity of hearing to the petitioner and following the law laid down by the court of law; 5] Alternatively, this Hon'ble Court may kindly be pleased to issue a writ in the nature of mandamus directing the Respondent No. 3 to decide the Application filed by the petitioner praying for grant -3- of priority/out of turn hearing of appeal and till the time the same is decided, the Respondent authorities be restrained coercive action(s) against the petitioner; 6] That, this Hon'ble Court may kindly be pleased to grant any other relief(s), which is deemed fit and proper in the aforesaid facts and circumstances of the case. 3. Learned counsels for the petitioner submit that petitioner was subject to assessment of income tax and assessment order was passed on 25/03/2024 (Annexure P/4) for the assessment year 2022-2023 (Financial year 2021-2022). The said order was subject to challenge in a statutory appeal filed under section 246 A of the Income Tax Act before the respondent No.5 . Apart from this, the petitioner has filed an application under section 226 (6) of Income Tax Act before the assessing Officers for grant of Interim Stay on the demand made. They further submit that vide order dated 06/12/2024 (Annexure P/1), the application (Annexure P/2) so made was rejected mechanically without assigning any reason. Against which, the petitioner preferred a review petition before the respondent No.2 under the instructions / office memorandum issued by the Central Board of Direct Tax, New Delhi. The respondent No.2 also dismiss the review application without assigning any reason and upheld the order of the Assessing Officer. These two orders are challenged before this Court. They further submits that the issue involved in this writ petition is no longer Res- Integra in light of judgment of this Court passed in case of Maa Danateshwari Maize Processing and Marketing Cooperative Society Limited Vs. Central Board of Direct Taxes in WPT No. 31/2025 order dated 19/02/2025. Therefore this writ petition may be allowed and impugned orders Annexure P/1 and Annexure P/2 may be set aside. 4. Learned counsel for the respondent could not dispute that the issue involved in this writ petition is squarely covered by the judgment of Maa Danteshwari (Supra). -4- 5. Heard learned counsel for the parties and perused the appended documents.
Decision
the appeal expeditiously. In view of the above, it is expected that respondent No.5 may decide the appeal filed by petitioner expeditiously. 9. With above observation, this writ petition is allowed as indicated above. 10. No cost. Ashish Sd/- /-- (Sachin Singh Rajput) Judge