2013 (7) TMI 773 - HC - Income Tax

Revision u/s 264 - CIT passed non interference order - Assessee declared as defaulter - Held that - 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 facie case, balance of convenience and inconvenience and irreparable loss and injury and the in the light of the public interest - 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 - conduct of the petitioner in respect of the entire proceedings does not entitle the petitioner to have any interim order in this writ petition - Following decision of Aluminium Corporation of India Ltd. vs. C. Balakrishnan & Ors. 1958 (8) TMI 47 - CALCUTTA HIGH COURT - Decided against Assessee.

Summary

Issues:
1. Challenge to order of revisioning authority under Section 264 of the Income Tax Act, 1961.
2. Refusal to treat assessee as defaulter in appeal.
3. Application for stay of demand.
4. Direction to maintain status quo.
5. Approach to Assessing Officer under Section 220(6).
6. Discretion of Assessing Officer in treating as non-defaulter.
7. Refusal of revisioning authority to interfere.
8. Consideration of submissions and application of wrong test.
9. Exercise of discretion by Assessing Authority.
10. Factors to be considered for discretionary relief.
11. Conduct of parties in seeking discretionary relief.
12. Consideration of facts and circumstances for judicious exercise of discretion.
13. Economic circumstances of assessee in granting relief.
14. Judicial interference with discretionary order.
15. Legal statutes for passing interim orders.
16. Prima facie case, balance of convenience, and irreparable loss.
17. Refusal of interim order based on petitioner's conduct.
18. Permission to file affidavits for relevant documents.

Analysis:
1. The petitioner challenged the order of the revisioning authority under Section 264 of the Income Tax Act, 1961, which refused to interfere with the order passed by the Assessing Authority under Section 220(6) of the Act regarding the treatment of the assessee as a defaulter in an amount in dispute in the appeal.
2. The assessee approached the Assessing Officer under Section 220(6) to be treated as a non-defaulter concerning the disputed amount in the appeal. The Assessing Officer initially directed the payment of a significant sum in instalments, leading to the petitioner's appeal to the revisioning authority.
3. The revisioning authority, while refusing to interfere with the order, granted additional instalments for payment. The petitioner contended that the Assessing Officer had applied the wrong test and failed to consider the fair chance of success in the appeal.
4. The discretion vested in the Assessing Authority under Section 220(6) is to be judiciously exercised, considering factors such as the existence of a prima facie case, balance of convenience, irreparable loss, and public interest.
5. The conduct of the parties seeking discretionary relief is a crucial factor to be weighed, as demonstrated by the revisioning authority's detailed review of the assessee's actions during the proceedings.
6. The economic circumstances of the assessee are also relevant in granting relief under Section 220(6), as the discretion should be exercised judiciously, following legal principles and considering all aspects of the case.
7. Judicial interference with discretionary orders is limited unless it is shown that the discretion was exercised capriciously or beyond the legal boundaries.
8. When passing interim orders, the court must consider the existence of a prima facie case, balance of convenience, and irreparable loss, with a refusal of interim relief based on the petitioner's conduct in this case.
9. The court granted permission for the filing of affidavits for relevant documents not included in the writ petition, with timelines set for the filing and reply, and listing the matter for further proceedings after four weeks.