M/S. BHARAT ELECTRONICS LIMITED v. DEPUTY COMMISSIONER OF INCOME TAX

(BY SRI. M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE ORDER(S), DIRECTIONS, WRIT(S) IN THE NATURE OF CERTIORARI OR ANY OTHER WRIT DIRECTING THE LD. RESPONDENT NO.2 TO QUASH AND SET-ASIDE THE ORDER BEARING DIN AND LETTER NO. DATED ITBA/COM/F/17/2026- 27/1091186920(1) 17.07.2026 ENCLOSED AT ANNEXURE -A, WHICH HAS IMPOSED A CONDITION OF PAYMENT OF 10PERCENT FOR STAYING THE RECOVERY OF THE DISPUTED AMOUNT, AS THE SAME HAS BEEN PASSED WITHOUT TAKING INTO CONSIDERATION THE EXISTENCE OF A STRONG PRIMA FACIE CASE ON MERITS AND THE FINANCIAL BURDEN WHICH SUCH A CONDITION HC-KAR - 3 - NC: 2026:KHC:39401 WP No. 23140 of 2026 CNR: KAHC010515202026 WOULD IMPOSE ON THE PETITIONER, A PUBLIC SECTOR UNDERTAKING. THIS FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: PETITION, COMING ON CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD ORAL ORDER The petitioner, a public sector undertaking, is aggrieved by these two orders: [a] the jurisdictional Assessing Officer's Order dated 19.06.2026 [Annexure - B] and [b] the order by the Principal Commissioner Income-tax, Bengaluru-1 dated 17.07.2026 [Annexure - A]. The jurisdictional Assessing Officer has disposed of the petitioner's application for stay stipulating that 90% of the amount in demand [Rs.1,36,84,46,121/-] is marked as stayed and the balance 10% [Rs.15,20,49,569/-] is marked as collectible.

The jurisdictional Assessing Officer's order in effect states the demand under the Assessment HC-KAR - 4 - NC: 2026:KHC:39401 WP No. 23140 of 2026 CNR: KAHC010515202026 Order is stayed subject to deposit of 10% of the demand recording that the petitioner's appeal against the Assessment Order is pending. The petitioner has filed an application with the Principal Commissioner of Income-tax, Bengaluru-1, who, while upholding the terms of the order of stay, has permitted the petitioner to pay 10% in two installments viz., on

15.10.2026 and 31.12.2026. It is not in dispute that the petitioner's application and the subsequent request for modification are dealt in terms of the Office Memorandum dated 29.02.2016 and the Corrigendum issued thereto on the quantum.

Mr. Prashanth S, the learned counsel for the petitioner, proposes to elaborate on why the jurisdictional Assessing Officer and the Principal Commissioner of Income-tax, Bengaluru-1, should have reduced the term of deposit below 10% of the demand under the Assessment Order underscoring that when prima facie case and financial burden are HC-KAR - 5 - NC: 2026:KHC:39401 WP No. 23140 of 2026 CNR: KAHC010515202026 shown, it would definitely be within the jurisdiction of Principal Commissioner Income-tax, Bengaluru-1, to reduce the requirement for deposit below the threshold of 20% of the demand pending in appeal.

However, this Court has examined the merits of the petitioner's grievance with the orders of both the jurisdictional Assessing Officer and the jurisdictional Principal Commissioner of Income-tax, Bengaluru-1 on perusal of the records and upon hearing Mr. M. Dilip, a learned Standing counsel who accepts notice for the respondents. This Court must observe that both the jurisdictional Assessing Officer and the jurisdictional Principal Commissioner of Income-tax, Bengaluru-1, Bengaluru have not reasoned why only 90% of the amount in demand must be marked as stayed and 10% as collectible. This Court is of the considered view that when the Authorities are required to reason based on certain HC-KAR - 6 - NC: 2026:KHC:39401 WP No. 23140 of 2026 CNR: KAHC010515202026 parameters under the relevant Circulars, they must decide by giving reasons.