Calcutta High Court (Appellete Side)
Mps Greenery Developers Ltd vs Assistant Commissioner Of Income Tax on 9 July, 2013
Author: Harish Tandon
Bench: Harish Tandon
1
34 09.07.13 W.P. 10846 (W) of 2013
akd
MPS Greenery Developers Ltd.
Vs.
Assistant Commissioner of Income Tax,
Circle-2, Midnapore & Ors.
--------
Mr. J. P. Khaitan, Mr. Srijib Chakraborty.
... for the petitioner.
Mr. Soumitra Mukherjee.
... for the U.O.I. Ms. Dolon Dasgupta, Mr. Snehashis Sen.
... for the respondent nos. 8(a),
(i), (j), (m), (n), & (p).
Mr. Sounak Sengupta.
... for the HDFC Bank.
Mr. P. K. Ray, Mr. O. N. Rai, Mr. S. Bandyopadhyay.
... for the respondent no. 10(a).
The petitioner has challenged the order of the revisioning authority passed under Section 264 of the Income Tax Act, 1961 refusing to interfere with the order passed by the Assessing Authority under Section 220 (6) of the said Act in not treating the assessee as defaulter in respect of an amount in dispute in the appeal.
On a proceedings being initiated a demand was raised to the tune of Rs.145,78,10,912/- and the assessee assailed the said order before the Commissioner of Income Tax (appeals) (XXXVI), Calcutta.
In the said appeal an application for stay was moved, but CIT (appeals) did not entertain the said 2 application, which compelled the assessee to approach this Court by filing a writ petition being WP 1359 (W) of 2013. By consent of the parties the said writ petition was disposed of with a direction upon the Commissioner of Income Tax, Calcutta to decide the matter in accordance with law and the respondents therein were directed to maintain status quo till further order being passed by the said Commissioner of Income Tax, Calcutta. The petitioner was also directed to maintain status quo with regard to dispossession of the immovable properties. It is informed that the said application is still pending and has not been disposed of by the said Commissioner of Income Tax, Calcutta.
Amidst pendency of the said appeal, the assessee approached the Assessing Officer under Section 220(6) of the said Act for treating it as non- defaulter in respect of the amount in dispute in the appeal.
The Assessing Officer observed that the entire facts as reflected in the order raising demand, the chance of granting relief in appeal is very slim and/or remote. However, subsequently the assessee was directed to pay Rs. 73 crores in 6 fortnightly instalments.
Assailing the said order, the assessee approached the revisioning authority under Section 264 before the Commissioner of Income Tax. The Commissioner has refused to interfere with the order, however, granted 7 monthly instalments to pay off the said sum of Rs. 73 crores.
He vehemently submits that it will not appear from the said order passed by the Commissioner that 3 any consideration is recorded in respect of the submissions made before it. The Commissioner has not considered that the Assessing Officer has applied wrong test and there is a fair chance of success in the appeal.
Mr. Khaitan, learned advocate appearing for the petitioner, however, submits that although the power vested upon the said Assessing Officer is to be exercised in appropriate cases and the discretion is left to the said authority, which should have been exercised judiciously and not capriciously. Learned advocate further submits that if the amount so demanded is so exorbitant or huge, the Assessing Officer should exercise the discretion in treating the assessee as non-defaulter in respect of the amount in dispute in the appeal and placed reliance upon a judgement of this Court in case of Aluminium Corporation of India Ltd. vs. C. Balakrishnan & Ors. reported in Vol. XXXVII Income Tax Reports, 267.
What could be culled out from the aforesaid submissions that discretion is left to the Assessing Authority at the time of invoking the powers conferred under Section 220 (6) of the said Act. It is not a matter of routine, the moment appeal is pending, the Assessing Authority shall treat the assessee as non-defaulter.
There is no dispute that the discretion is to be exercised judiciously in the facts and circumstances of the case. The authorities cannot act as per their whims or peril either exercising the discretion and/or refusing to exercise the discretion. It is not in dispute that those powers are to be exercised on the four settled legal principles, namely, existence of prima 4 facie case, balance of convenience and inconvenience and irreparable loss and injury and the in the light of the public interest.
The conduct of the parties, who have approached the authority for exercising of the discretion in their favour is one of the relevant factors which should be weighed at the time of granting discretionary relief.
The revisioning authority has recorded in details the conduct of the assessee throughout the proceedings. The assessee has resorted all the measures to wriggle out the tentacles of the demands. One of the fact the revisioning authority has recorded that despite several requests being made in this regard, the assessee has refused to disclose the Pass Word and User I.D. of the Hard Disc confiscated and/or seized during investigation.
As held by this Court in case of Aluminium Corporation of India Ltd. (supra) that judicious exercise of the discretion involves consideration of the facts and circumstances of the case in all respects. There is no quarrel to the proposition as laid down in the said report that the position of the economic circumstances of assessee is one of the factors to be considered while granting relief under Section 220 (6) of the said Act.
What could be culled out from the said report is that it is the discretion, which is left to the said authority and such discretion should be exercised judiciously. The Writ Court should not normally interfere with the discretionary order, unless it is demonstrated that the said discretion has been 5 exercised capriciously and the decision is based upon no evidence and/or beyond the legal sphere of law.
The court at the time of passing an interim order should bear in mind the three legal statutes, namely, existence of prima facie case, balance of convenience and inconvenience and irreparable loss and injury. Mere existence of prima facie case does not invite the passing of an interim order, unless it is shown that the person will suffer from irreparable loss and injury and the balance of convenience and inconvenience lies in favour of granting an interim relief.
I have indicated hereinbefore the conduct of the petitioner in respect of the entire proceedings, which, in my considered opinion, does not entitle the petitioner to have any interim order in this writ petition. The same is refused at this stage.
However, respondent authorities appear and submit that certain relevant documents, which has not been incorporated in the writ petition for which they should be permitted to file affidavits in the matter.
Let affidavit-in-opposition be filed within three weeks from date. Reply thereto, if any, may be filed within one week thereafter.
Matter to appear in the list after four weeks.
(HARISH TANDON, J.) 6