Monarch v. ITO, Ward-1(2)(1), Bengaluru / DCIT, Circle-1(2)(1), Bengaluru
[Citation -2020-LL-0304-38]

Citation 2020-LL-0304-38
Appellant Name Monarch
Respondent Name ITO, Ward-1(2)(1), Bengaluru / DCIT, Circle-1(2)(1), Bengaluru
Court HIGH COURT OF KARNATAKA
Relevant Act Income-tax
Date of Order 04/03/2020
Judgment View Judgment
Keyword Tags attachment of bank account • application for stay • application of mind • recovery of demand • stay of recovery • stay of demand
Bot Summary: The petitioner submits that as against the assessment order at Annexure-B, an appeal has been filed before the Commissioner of Income Tax. The petitioner has furnished copy of the detailed representation made to the Principal Commissioner of Income Tax detailing various contentions, justifying stay of recovery of demand and making out a case that the demand is high 4 pitched and has also contended that the assessment order has disallowed expenditure of Rs.6,53,34,735/- as allowable under Section 37(1) of the Income Tax Act, 1961, as the said amount was already declared as income during the assessment year 2012 2013. Learned counsel appearing for the Revenue submits that the petition is premature and no doubt, the Principal Commissioner of Income Tax has not passed any order on the representation of the petitioner dated 07.02.2020, but the same would be considered in accordance with law and in accordance with the existing circulars as applicable. As regards the contention that the consideration of application for stay and further exercise of power of the Principal Commissioner of Income Tax, keeping in mind the circular bearing No.1914 as amended on 21.5.2017, 29.2.2016 and 31.7.2017 request of the petitioner is to be considered in a meaningful manner. The power of granting stay has been considered by the High Court of Judicature at Madras in the case of M/s. Shriram Finance v. Principal Commissioner of Income Tax and Others wherein, certain guidelines have been referred to in para-5 which may be taken note of. The petitioner to be present before the Principal Commissioner of Income Tax on 05.03.2020 at 11.30 a.m. and the request of petitioner as contained in the representation dated 07.02.2020 would be disposed of in light of the observations made above. In light of the attachment being restricted to Rs.61,17,317/-, the Principal Commissioner of Income Tax to dispose of the representation of the petitioner within a period not later than one week from the date of appearance of the petitioner as noticed above.


1 IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 4TH DAY OF MARCH 2020 BEFORE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No. 4952/2020 (T-IT) Between: M/s. Monarch No.54, Monarch Plaza, Brigade Road, Bangalore 560001. Represented by Shri Dawood Mohammed Partner Aged about 69 years S/o. Mohammed Dawood Petitioner (By Sri Raghuraman V, Adv.) And: 1. Income Tax Officer Ward 1(2)(1), BMTC Building, 80 Feet Road, 6th Block, Near KHB Games Village, Koramangala, Bengaluru 560095. 2. Deputy Commissioner of Income Tax Circle 1(2)(1), BMTC Building, 80 Feet Road, 6th Block, Near KHB Games Village, 2 Koramangala, Bengaluru 560095. Respondents (By Sri. K. V. Aravind, Adv.) This Writ Petition is filed under Articles 226 & 227 of Constitution of India, praying to quash impugned notice (1) dated 24.09.2018 (2) dated 29.09.2018 (Annexures-A1 and A2) issued by R-1 as being illegal and without jurisdiction and quash impugned order (1) dated 13.12.2019 (Annexure-B) passed by R-2 as being violative of Article 14, Article 19, Article 265 and 300A of Constitution of India and etc. This Writ Petition coming on for preliminary hearing this day, Court made following: ORDER petitioner has challenged impugned notice issued under Section 143 of Income Tax Act, 1961, copies of which are produced as Annexures-A1 and A2 and has also challenged order dated 13.12.2019, copy of which is enclosed as Annexure B and demand pursuant to assessment order at Annexure-C dated 13.12.2019. 2. petitioner submits that as against assessment order at Annexure-B, appeal has been filed before Commissioner of Income Tax (Appeals). 3 It is further submitted that petitioner had filed application for stay and had sought for interim relief and Assessing Officer as per order at Annexure-X has ordered that there would be stay of 80% of disputed demand till disposal of appeal, subject to payment of Rs.61,17,317/- (20% of demand) on or before 07.02.2020. 3. It is contention of learned counsel for petitioner that subsequent to order at Annexure-X, petitioner has approached Principal Commissioner of Income Tax on 07.02.2020 and had sought for stay of recovery of demand including direction of Assessing Officer directing petitioner to deposit Rs.61,17,317/- of demand. petitioner has furnished copy of detailed representation made to Principal Commissioner of Income Tax detailing various contentions, justifying stay of recovery of demand and making out case that demand is high 4 pitched and has also contended that assessment order has disallowed expenditure of Rs.6,53,34,735/- as allowable under Section 37(1) of Income Tax Act, 1961, as said amount was already declared as income during assessment year 2012 2013. Various other contentions have also been raised. 4. It is further contended that when application for stay is taken up for consideration by Assessing Officer, Assessing Officer should pass order after due application of mind and that subsequently after application for stay is disposed off, petitioner has opportunity of approaching Principal Commissioner of Income Tax in light of Circular bearing No.1914, further amended on 25.01.2017, 29.02.2016 and 31.07.2017 and despite representation there is no consideration by Principal Commissioner of Income Tax. 5 5. It is also contended that Principal Commissioner of Income Tax is also to take note of guidelines as observed in case of Flipkart India Private Limited v. Assistant Commissioner of Income Tax (W.P.Nos.1339-1342/2017 decided on 23.02.2017) and apply his mind and pass considered order. It is contended that contents of stay application make out case for consideration of relaxing condition as sought for. 6. Learned counsel appearing for Revenue submits that petition is premature and no doubt, Principal Commissioner of Income Tax has not passed any order on representation of petitioner dated 07.02.2020, but same would be considered in accordance with law and in accordance with existing circulars as applicable. 7. In light of appeal having been filed, question of intervening as regards to assessment 6 order at this stage is not appropriate. However, as regards contention that consideration of application for stay and further exercise of power of Principal Commissioner of Income Tax, keeping in mind circular bearing No.1914 as amended on 21.5.2017, 29.2.2016 and 31.7.2017 request of petitioner is to be considered in meaningful manner. In fact, power of granting stay has been considered by High Court of Judicature at Madras in case of M/s. Shriram Finance v. Principal Commissioner of Income Tax (1) and Others (W.P.No.5425/2019 & W.P.Nos.6166 & 6168/2019 decided on 01.03.2019) wherein, certain guidelines have been referred to in para-5 which may be taken note of. So also manner of exercise of power of Principal Commissioner of Income Tax is detailed in Flipkart s case (supra) at paras 18 and 19, which needs to be kept in mind. This Court refrains from expressing any opinion on merits of contentions raised but reiterates that 7 Principal Commissioner of Income Tax is to exercise power conferred upon him as per circulars in meaningful manner. 8. petitioner to be present before Principal Commissioner of Income Tax on 05.03.2020 at 11.30 a.m. and request of petitioner as contained in representation dated 07.02.2020 would be disposed of in light of observations made above. 9. In light of submission that there has been attachment of bank account and in light of direction being passed, attachment already resorted to would be limited to Rs.61,17,317/-. However, in light of attachment being restricted to Rs.61,17,317/-, Principal Commissioner of Income Tax to dispose of representation of petitioner within period not later than one week from date of appearance of petitioner as noticed above. All contentions of parties are kept open. It is made clear that if Principal 8 Commissioner of Income Tax does not decide matter within period of one week as stipulated, attachment would automatically stand vacated. This petition is accordingly disposed off. Sd/- JUDGE VGR Monarch v. ITO, Ward-1(2)(1), Bengaluru / DCIT, Circle-1(2)(1), Bengaluru
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