1 IN HIGH COURT OF KARNATAKA DHARWAD BENCH Dated this 16th day of March 2020 Before HON BLE MR. JUSTICE B.M. SHYAM PRASAD Writ Petition No.145119/2020 (T-IT) BETWEEN SAUNSHI URBAN CO-OP CREDIT SOCIETY LTD 01, SAUNSHI URBAN CO-OP CREDIT SOCIETY LTD., MARKET ROAD, SAUNSHI-581117, DHARWAD DIST. KARNATAKA, INDIA (REPRESENTED BY MR. SOMASHEKAR FAKKIRAPPA HATTI, AGED ABOUT 42 YEARS, S/O FAKKIRAPPA). ...PETITIONER (BY SRI. SHASHANK S. HEGDE & SRI. NARENDRAKUMAR J., & SMT. PREETI SHASHANK, ADVOCATES) AND 1. PRINCIPAL COMMISSIONER OF INCOME TAX-1 C. R. BUILDING, NAVANAGAR, HUBBALI-580025 2. INCOME TAX OFFICER WARD 1(1), C. R. BUILDING, NAVANAGAR, HUBBALI-580025. ...RESPONDENTS (BY SRI. Y.V.RAVIRAJ, ADVOCATE FOR R1 & R2) 2 This Writ Petition is filed under Articles 226 & 227 of Constitution of India praying to quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise impugned letter dated 19.02.2020 issued by learned first respondent rejecting stay petition for AY 2017-18 enclosed in Annexure-A vide F.No.Stay Petition/Pr.CIT-HBL/2019- 20; quash as far as petitioner is concerned by appropriate writ or order in nature of certiorari or otherwise impugned letter dated 02.01.2020 issued by learned second respondent to petitioner directing to pay 20% of total demand raised for AY 2017-18 enclosed in Annexure-B vide DIN & LETTER NO.ITBA/COM/F/17/ 2019-20/1023580098(1) and etc. This Writ Petition coming on for Preliminary Hearing, this day, Court made following: ORDER learned counsel for petitioner and learned counsel, Sri Y.V.Raviraj, who accepts notice for respondents Nos.1 and 2 are heard. 2. petitioner is aggrieved by order dated 19.02.2020 passed by Principal Commissioner of Income-Tax, Hubballi, rejecting his application for stay without minimum deposit of 20% of demand. Though Principal Commissioner of Income-Tax has rejected petitioner s application by order dated 3 19.02.2020, she has permitted petitioner to deposit minimum of 20% of demand in three installments with first 10% of demand being payable immediately, 5% of demand on or before 5th March, 2020, and balance 5% of demand on or before 25th March 2020. 3. petitioner s grievance is that Principal Commissioner of Income-tax has rejected petitioner s application for stay without minimum deposit of 20% ignoring Instruction No.1914 and subsequent official memorandum/ Circular dated 29.02.2016. learned counsel for petitioner submits that Principal Commissioner of Income-Tax in light of Instruction No.1914 and subsequent official memorandum/ Circular dated 29.02.2016, while considering application for stay, had to consider whether assessment by Assessment Officer is unreasonably High-Pitched assessment and whether petitioner is put to genuine hardship because of such assessment. 4 learned counsel for petitioner relies upon decision of this Court in Flipkart India (P.) Ltd. Vs. Assistant Commissioner of Income-tax, Circle 3(1)(1), Bengaluru1 in support of his submissions in this regard. 4. This Court in case of Flipkart India (P.) Ltd., while considering question whether Official Memorandum/Circular dated 29.02.2016 is issued in supersession of Instruction No.1914 and whether Assessment Officer/Principal Commissioner, Income-Tax, should consider request for stay in light of Instruction No. 1914 and subsequent Official Memorandum/Circular dated 29.02.2016, has held as follows: 16. .. Therefore, while dealing with application filed by assessee, both Assessing Officer, and Prl. CIT, are required to see if assessee s case would fall under Instruction NO.2B(iii) of Circular NO.1914, or not? Both Assessing Officer, and Prl. CIT, are required to examine whether 1 [2017]79 taxmann.com 159 (Karnataka) 5 assessment is unreasonably highpitched , or whether demand for depositing 15% of disputed demand amount would lead to genuine hardship being caused to assessee or not? 5. It is incumbent on Principal Commissioner of Income-Tax to decide on application for stay considering two questions viz., whether assessment is unreasonably high-pitched and whether petitioner would be put to genuine hardship because of such assessment. However, in present case, Principal Commissioner s order is non-speaking order without considering either question of High-Pitched Assessment or genuine hardship to petitioner. Therefore, impugned order will have to be quashed on this limited ground and petitioner s application restored/ remanded for reconsideration. 6. At this stage, learned counsel for respondents submits that if petitioner were to appear 6 before Principal Commissioner of Income-Tax, Hubbali on 19th March 2020, petitioner will be heard afresh on merits of its application for stay and exemption from deposit of minimum of 20% of demand. For foregoing, writ petition is partly allowed quashing order dated 19.02.2020 restoring petitioner s application for stay for reconsideration in accordance with decision of this Court in Flipkart India s case, requiring petitioner to appear before Principal Commissioner of Income-Tax, Hubballi, on 19th March 2020 without further notice. petitioner is reserved with liberty to urge all grounds in support of such application. writ petition is allowed accordingly. Sd/- JUDGE Kms Saunshi Urban Co-Op Credit Society Ltd. v. Principal Commissioner of Income-tax-1, Hubbali / Income-tax Officer Ward 1(1), Hubbali