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TMI Blog2015 (10) TMI 1903X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act with effect from 1.4.2002. Subsequently, for assessment years 2009-10, 2010-11 and 2011-12, the matters were taken up for scrutiny and assessment orders came to be passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") computing the income of the petitioner as 'Nil'. In respect of assessment year 2012-13, the petitioner filed return of income declaring its income as 'Nil' on 28.9.2012. The matter was taken up for scrutiny and by the impugned order dated 24.3.2015, the Assessing Officer assessed the total income of the petitioner as Rs. 48,22,54,670/- and raised a demand of Rs. 20,41,52,870/-. Against the impugned order, the petitioner preferred a statutory appeal under section 246 of the Act before the Commissioner of Income Tax (Appeals). Simultaneously, the petitioner also moved an application under section 220(6) of the Act before the first respondent Deputy Commissioner of Income Tax (Exemptions) praying that the demand raised pursuant to the assessment order be kept in abeyance till the final disposal of the appeal. By the impugned order dated 26.5.2015, the respondent No.1 directed the petitioner to pay the entire demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f examining whether the petitioner falls within the ambit of section 2(15) of the Act, one has to look to the statutory scheme of the Town Planning Act to find out whether the activities carried out by the petitioner amount to trade, commerce or business. According to the learned counsel, in the light of the statutory duties cast upon the petitioner, by no stretch of imagination can the same be considered to be trade, commerce or business. Referring to the impugned assessment order dated 24.3.2015, it was pointed out that the Assessing Officer has considered that the assessee being an urban development authority charges various types of fees from the public for providing certain amenities like roads, bridges, etc. which is recovered from the beneficiaries who get benefit out of development of such common infrastructure. Similarly, the assessee charges building height fee, charge of use fee, ground coverage fee, development charges, NOC processing fee, regulation fee, impact fee, sewage charge etc. These are receipts which are received by the assessee for the services rendered by the assessee to the general public/beneficiaries and, therefore, the same have to be considered as incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not the principal activity. Merely because while carrying out the activities for the purpose of achieving the objects of the trust, certain incidental surpluses were generated, would not render the activity in the nature of trade, commerce or business. It was submitted that the above decision would be squarely applicable to the facts of the present case and that the impugned order of assessment which is contrary to the law laid down in the above decision, therefore, cannot be sustained. 3.1 Reliance was also placed upon the decision of the Delhi High Court in the case of Bureau of Indian Standards v. Director General of Income Tax (Exemptions), (2013) 358 ITR 78 (Delhi), wherein the court was called upon to decide as to whether the Bureau of Indian Standards is involved in carrying on trade, commerce or business. The court observed that BIS is a statutory body established under the BIS Act and was brought into existence "for the harmonious development of the activities of standardization, marking and quality certification of goods". This was, and has been, its primary and pre-dominant object. Even though it does take license fee for granting marks/certification, the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... totally non-reasoned order which does not take into consideration any factor relevant for the purpose of deciding the stay application. Reliance was placed upon the decision of this court in the case of Hitech Outsourcing Services v. Income Tax Officer, 2015 LawSuit (Guj) 88, wherein the court noted that in the order under section 220 (6) impugned therein, reasons were not mentioned for prima facie consideration of the merit or even on the aspect of balance of convenience. Nothing was recorded in the order as to why the ground of bank guarantee for grant of stay was taken into consideration. The court was of the considered view that the order can be said to be non-speaking order since no reasons are mentioned. The court was of the view that when the application is to be considered and decided, it is required of the concerned authority to record the reasons and then to reach to the ultimate conclusion as to whether the stay should be granted or not and if yes on what condition. In absence of any reasons, the order cannot be sustained. It was submitted that both, prima facie consideration and balance of convenience have not been looked into by the authorities below while directing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son the alternative remedy. Referring to the relief prayed for vide paragraph 9 (a) of quashing the assessment order, it was submitted that such relief is not warranted in the facts and circumstances of the case and that the perception of the Assessing Officer in the facts and circumstances of the case would not justify jettisoning the appellate remedy. In support of his submission, the learned counsel placed reliance upon the decision of the Supreme Court in the case of Commissioner of Income Tax v. Chhabil Dass Agarwal, (2013) 357 ITR 357, wherein the assessee instead of exhausting the statutory remedy available under the Act, that is, the statutory appeal before the statutory appellate authority had approached the High Court under Article 226 of the Constitution of India. The court noticed that the writ court had delved into the merits of the case and thought it fit to quash the order of the Assessing Officer. The only question before the Supreme Court was as to whether the High Court was justified in interfering with the order passed by the Assessing Officer under section 148 of the Act in exercise of its jurisdiction under Article 226 of the Constitution when an equally effica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fall within the exemption provisions and merely because the authority is carrying out various statutory functions does not mean that it falls within the ambit of section 2(15) of the Act. It was submitted that whether the petitioner carries on trade, commerce or business is primarily a question of ascertaining facts and that even a solitary transaction can be in the nature of trade, commerce or business. Referring to the impugned order of assessment and more particularly paragraph 5.3 thereof, it was pointed out that the assessee is carrying on various activities in respect of which it charges fees from the beneficiaries, to submit that having regard to the activities carried on by the petitioner, it cannot be said that the proviso to section 2(15) of the Act would not be attracted. The attention of the court was invited to the decision of the Jammu and Kashmir High Court in the case of Jammu Development Authority v. Union of India and another rendered on 7.11.2013 in ITA No.164 of 2012. It was submitted that the said decision supports the stand of the Assessing Officer. It was further pointed out that the said decision came to be challenged by the assessee before the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, the first question that arises for consideration is as to whether on the facts and in the circumstances of this case, this court would entertain a writ petition challenging the assessment order framed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961. From the facts and contentions noted hereinabove, it is apparent that none of the exceptions laid down by the Supreme Court warranting interference by the High Court in exercise of powers under Article 226 of the Constitution have been made out in the facts of the present case. It is not the case of the petitioner that the impugned order has been passed in breach of the principles of natural justice or that the statutory authority has not acted in accordance with the provisions of the Act or has acted in defiance of the fundamental principles of judicial procedure. Under the circumstances, when there is an efficacious alternative statutory remedy available to the petitioner and the petitioner has already availed of the same, in the opinion of this court, no case has been made out for entertaining a writ petition against the assessment order framed under section 143(3) of the Act. Besides, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the authorised representative of the assessee agreed to pay installments. As noted earlier, the petitioner-assessee in the affidavit in rejoinder has taken a plea that no such consent had been given by the authorised representative and that is the normal practice of the officers to make such observations. These, in sum and substance are the contents of the orders passed by the respondents No.1 to 3 on the petitioner's applications under section 220(6) of the Act. 8. Section 220(6) of the Act provides that where an assessee has presented an appeal under section 246, the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of. Thus, section 220(6) enacts that where an assessee has preferred an appeal to the first appellate authority disputing any part or the whole of the demanded amount, the assessee may make an application to the Assessing Officer that the latter may not treat the former as in default in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay 20% of the outstanding demand under the order made by the Deputy Commissioner of Income Tax under section 220 (6) of the Act. 11. This court in the case of Hitech Outsourcing Services v. Income Tax Officer, (supra), has held that the authority is required to prima facie consider the merits and balance of convenience as also irreparable injury. Therefore, in order to decide whether the assessee has made out a prima facie case or not for grant of stay, the authority considering the application for grant of stay is required prima facie to look into the questions involved in the appeal and to consider the plea raised by the assessee and to exercise discretion vested in it judicially and assign the reasons for the rejection of the stay application. 12. In Sakarpatal Vibhag Jangal Kamdar Sahakari Mandali Ltd. v. Income Tax Officer and others, (1992) 198 ITR 685, this court held that where an assessee makes an application under section 220(6) to the Assessing Officer, the Assessing Officer has to consider all the relevant aspects before rejecting such an application, or imposing conditions, while treating the assessee as not being in default. If all the relevant aspects are taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the CBDT and consider the question as to whether the assessee should be treated as an assessee not in default accordingly. However, all the three orders/communications under section 220(6) are bereft of any reasoning or any material to show application of mind to the aspects enumerated in the CBDT circular. True it is, that the circular also provides for grant of installments, however, that does not absolve the authorities from not examining the case in the light of the guidelines to examine as to whether blanket stay should be granted or whether the stay could be granted on condition of suitable security to safeguard the interest of the revenue or on payment towards the taxes a reasonable amount in lump sum or in installments, etc. 15. In the facts of the present case, as is evident from the submissions advanced by the learned counsel for the respective parties, there exist conflicting decisions of different High Courts including the jurisdictional High Court. Under the circumstances, having regard to the guidelines laid down in the circular, it was incumbent upon the respondents to apply their minds to the facts of the case while considering the question of grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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