2019 (7) TMI 985 - HC - Income Tax

Stay of demand - appellate authority directed the petitioner to pay 15% of the aggregate demand as reduced by demand already paid in three equal instalments so that the balance demand will stand stayed until the adjudication of the appeal - discretionary domain of the appellate authority - HELD THAT - The petitioner's counsel has fairly submitted that the appellate authority does have the discretion to grant a conditional order; nevertheless, he asserts that once the appellant demonstrates more than a prima facie case, passing a conditional order cannot be a ritual. Attractive as the learned counsel's submissions is, there cannot be any proposition of law, nor can I readily find one, that if the appellant could demonstrate as he presumes for a fruitful case in appeal. Still, he does not deprive of the appellate authority's discretion. The courts, in judicial review, are not to interfere with the discretionary orders and passed by statutory authorities unless the authority has acted ultra vires, are the very exercise of judiciary, bogus and pervasive. I there find neither of the grounds. I express my inability to interfere with the Ext.P5.

Summary

Issues:
Challenge to assessment orders and stay order issued by the appellate authority.

Analysis:
The petitioner, an assessee, challenged the assessment orders through appeals and the Commissioner of Income Tax Appeals issued an order of stay directing the petitioner to pay 15% of the demand in three instalments. The petitioner filed a writ petition challenging this interim order.

The petitioner made a payment of &8377; 17,79,490 after filing the writ petition, with a breakdown for each assessment year.

The petitioner's counsel argued on the merits, citing Supreme Court judgments that a notice under Section 148 of the Income Tax Act must have reasons set out and the authority must supply reasons upon request. However, the judge noted the discretionary domain of the appellate authority.

While acknowledging the discretionary power of the appellate authority to grant conditional orders, the judge emphasized that passing a conditional order should not be a mere ritual and must be based on more than a prima facie case demonstrated by the appellant.

The judge highlighted that the courts should not interfere with discretionary orders passed by statutory authorities unless there is an ultra vires action or a bogus exercise of power. Finding no grounds for interference, the judge dismissed the writ petition.

The judge directed that if the appellate authority insists on the balance of the demand, it should consider the amounts already paid by the petitioner. Additionally, the compliance date for the condition in the stay order was extended by two months due to the petitioner's genuine pursuit of the writ petition.