1 In High Court of Judicature at Madras Dated : 16.11.2017 Coram : Honourable Mr.Justice T.S.SIVAGNANAM Writ Petition No.29350 of 2017 & WMP.Nos.31612 to 31614 of 2017 J.Srinivasan ...Petitioner Vs 1.The Commissioner of Income Tax (Appeals)-19, Aayakar Bhavan, M.G.Road, Nungambakkam, Chennai-34. 2.The Principal Commissioner of Income Tax, Central-1, Chennai, M.G.Road, Nungambakkam, Chennai-34. 3.The Assistant Commissioner of Income Tax, Central Circle 3 (2), Chennai, M.G.Road, Nungambakkam, Chennai-34. 4.The Tax Recovery Officer, Central-1, No.46, Nungambakkam High Road, Chennai-34. ...Respondents PETITION under Article 226 of Constitution of India praying for issuance of Writ of Certiorarified Mandamus to call for records on file of first respondent in ITA Nos.206 to 212/17-18/CIT(A)-19 passing order dated 12.10.2017 rejecting stay petitions filed by petitioner for stay of demand for assessment years 2009-10 to 2015-16; quash http://www.judis.nic.in 2 same as illegal, arbitrary and devoid of merit and consequentially quash order of second respondent dated 30.6.2017 in C.No.1571/PCIT/C-1/24 to 30/16-17 and direct respondent to grant stay of demand pending disposal of appeals before first respondent. For Petitioner : Mr.R.Sivaraman For Respondents : Mr.A.P.Srinivas, SCC ORDER Mr.A.P.Srinivas, learned Senior Standing Counsel accepts notice for respondents. Heard both. By consent, writ petition itself is taken up for final disposal. 2. petitioner is aggrieved by communication sent by first respondent dated 12.10.2017; so also order passed by second respondent dated 30.6.2017. 3. petitioner preferred appeal before first respondent against orders passed by third respondent for assessment years 2009-10 to 2015-16. Initially, when appeals were filed before first respondent, it appears that petitioner did not file petitions for stay. However, petitioner thought fit to approach third respondent - his Assessing Officer and filed petitions dated 06.2.2017 to keep demands in abeyance. third respondent passed order on 07.2.2017 directing petitioner to pay 15% of outstanding demand for relevant assessment years, submit proof of payment and give undertaking to http://www.judis.nic.in 3 cooperate in early disposal of appeals. In order dated 07.2.2017, third respondent imposed other conditions also. 4. petitioner's case is that he was unable to comply with conditions imposed in order dated 07.2.2017 and instead of challenging said order, petitioner thought fit to file petitions dated 13.2.2017 before Joint Commissioner of Income Tax. In petitions dated 13.2.2017, petitioner prayed for stay of demand pertaining to relevant assessment years till disposal of appeals by first respondent. Additional Commissioner of Income Tax afforded opportunity of personal hearing to petitioner and after taking note of submissions made by petitioner in stay petitions, he pointed out that Central Board of Direct Taxes, in Instruction No.1914 dated 21.3.1996, as revised on 29.2.2016, streamlined process of stay of demand till disposal of appeals before Commissioner of Income Tax (Appeals) and that assessee, as per guidelines, having not paid 15% of disputed demands, it is not possible to accede to request of assessee for stay of collection of demands and accordingly, rejected stay petitions by order dated 08.3.2017. 5. Once again, petitioner did not challenge order passed by Additional Commissioner of Income Tax. However, he filed separate petitions dated 13.3.2017 before Principal Commissioner of Income Tax, Central-1 namely second respondent herein for each of assessment years http://www.judis.nic.in 4 seeking to keep demands in abeyance till disposal of appeals before first respondent. second respondent, by order dated 30.6.2017, opined that petitioner needs to pay 15% of demands in July 2017 for being entitled to grant of stay. Yet again, petitioner did not question order dated 30.6.2017. In interregnum, since petitioner's bank accounts were attached, he approached second respondent by way of petition dated 08.9.2017, received in office of second respondent on 27.9.2017, requesting for lifting of attachment. This petition was rejected by second respondent by order dated 06.10.2017. As usual, petitioner did not question that order also. 6. Even prior to request for lifting of attachment dated 08.9.2017, petitioner filed petitions on 03.8.2017 before first respondent for grant of stay of demand for relevant assessment years. On perusal of petitions dated 03.8.2017, it is seen that petitioner canvassed merits of matter and also mentioned about various orders passed by Authorities rejecting his earlier requests. petitioner also relied upon decision of this Court in case of Paulsons Litho Works Vs. ITO & Others [reported in (1994) 208 ITR 676] in support of his contention that first respondent has necessary powers to deal with and pass orders on petitions for stay filed where Appellate Authority is satisfied that very object of appeals would be rendered nugatory or frustrated, if interim orders of stay as prayed for were not granted. petitioner also http://www.judis.nic.in 5 relied upon decisions of Delhi High Court in case of Soul Vs. DCIT [reported in (2010) 323 ITR 305] wherein Delhi High Court considered effect of Instruction No.1914 dated 02.12.1993, which supersedes Instruction No.96 dated 21.8.1969, which provided that demand should be stayed in exceptional circumstances where assessment orders appear to be unreasonably high pitched or where genuine hardship is likely to be caused to assessee. 7. After making above submissions, petitioner requested that Assessing Officer might be directed to grant stay of recovery of demand and made further prayer to permit him to pay 5% of total outstanding demand amounting to Rs.1,46,76,920/- in monthly instalments of Rs.1 lakh. petitioner also prayed for early hearing of appeals. Those petitions were not entertained by first respondent and order to that effect was passed on 12.10.2017, which is impugned in this writ petition. 8. Paragraph 2 of impugned order would be relevant, as first respondent expressed his opinion as to why he was not able to act upon petitions filed by petitioner dated 03.8.2017. On reading of paragraph 2 of impugned order, it appears that first respondent was largely guided by penultimate paragraph in petitions dated 03.8.2017 wherein petitioner made prayer for grant of stay and also sought permission for payment in instalments. Considering this as administrative act, first respondent held that he, being Judicial Authority, is http://www.judis.nic.in 6 empowered to adjudicate grounds of appeal and that he is not Administrative Authority, before whom, petitions can be moved seeking stay of demands. 9. On prima facie reading of paragraph 2 of impugned order, one would get impression that first respondent stated that he has no power to entertain stay petitions. However, on closer reading of said paragraph, it reveals that first respondent was considering request made by petitioner to pay 5% of demands in monthly instalments of Rs.1 lakh. Therefore, observation contained in paragraph 2 of impugned order cannot be construed as if first respondent held that he has no power to grant stay. This would be clear on reading subsequent sentences, since first respondent opined that petitioner had not filed stay petitions when he filed appeals nor filed any additional grounds of appeal seeking stay of demands or any other specific relief. Therefore, first respondent further opined that petitions dated 03.8.2017 cannot be acted upon. 10. learned counsel for petitioner, by relying upon decision in Paulsons Litho Works, would contend that Commissioner of Income Tax (Appeals) has necessary powers to deal with and pass orders on stay petitions. 11. As observed earlier, first respondent has not come to conclusion that petitions for stay are not maintainable before him. But, http://www.judis.nic.in 7 what appears to have passed in his mind is that he cannot act as Administrative Authority and permit payment in instalments. Therefore, petitioner is not justified in stating that first respondent held that he had no power to grant stay. 12. In so far as observation that petitioner had not filed stay petitions along with original appeals is concerned, there can be no estoppal in this regard, as petitioner would be entitled to move petitions for stay pending disposal of appeals before Appellate Authority. That apart, first respondent stated that petitioner had not filed additional grounds. This finding appears to be incorrect because in stay petitions dated 03.8.2017, petitioner discussed about merits of matter and placed certain facts, which, according to him, would establish prima facie case and stated that assessment being high pitched assessment, he is entitled for grant of stay and that he is facing severe financial constraints, as his bank accounts have already been attached. Therefore, it may not be right to observe that no additional grounds have been filed. stay petitions undoubtedly contain submissions made by petitioner on merits as well as on legal issues. 13. Hence, this Court is of considered view that first respondent should take decision on merits on petitions filed by petitioner dated 03.8.2017. It is made clear that this Court has not accepted submissions of petitioner that first respondent abdicated his http://www.judis.nic.in 8 powers or outrightly stated that he does not have power to grant stay. 14. learned Senior Standing Counsel for Revenue was fully justified in his submission that petitioner's conduct virtually amounts to forum shopping. It is true because petitioner has been moving various authorities, who have considered petitioner's requests, afforded him opportunity of personal hearing and passed speaking orders. However, petitioner did not comply with any of those directions, but once again approached first respondent. This will clearly shows conduct of petitioner. But, this cannot be ground for refusing to consider stay petitions by Appellate Authority, before whom, appeals are pending. 15. As held in case of Paulsons Litho Works, first respondent has sufficient jurisdiction to deal with stay petitions on merits and in accordance with law. In light of above, impugned order requires to be interfered with and matter to be remitted back to first respondent for decision on merits. 16. Thus, for all above reasons in preceding paragraphs and on grounds pointed out earlier, writ petition is partly allowed, impugned order dated 12.10.2017 passed by first respondent is set aside and matter is remitted back to first respondent to be considered on merits and in accordance with law after affording opportunity of personal hearing. No costs. Consequently, connected WMPs are closed. 16.11.2017 http://www.judis.nic.in 9 T.S.SIVAGNANAM,J RS Internet : Yes To 1.The Commissioner of Income Tax (Appeals)-19, Aayakar Bhavan, M.G.Road, Nungambakkam, Chennai-34. 2.The Principal Commissioner of Income Tax, Central-1, Chennai, M.G.Road, Nungambakkam, Chennai-34. 3.The Assistant Commissioner of Income Tax, Central Circle 3 (2), Chennai, M.G.Road, Nungambakkam, Chennai-34. 4.The Tax Recovery Officer, Central-1, No.46, Nungambakkam High Road, Chennai-34. WP.No.29350 of 2017 & WMP.Nos.31612 to 31614 of 2017 16.11.2017 http://www.judis.nic.in J. Srinivasan v. CIT(A)-19, Chennai/ Pr. CIT, Central-1, Chennai/ ACIT, Central Circle 3(2), Chennai/ Tax Recovery Officer, Central-1, Chennai