9911796707
TMI Blog2022 (2) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer after granting sufficient opportunities and after due consideration of all the relevant aspects of the matter and, therefore, the issue of high pitched assessment need not be considered. The findings recorded in para-3 of the order dated 17.12.2021 are not appealing to us at all. The matter has not been considered by the respondent No.2 in its proper perspective. Many times in the over zealousness to protect the interest of the Revenue, the authorities render their discretionary orders susceptible to the complaint that those have been passed without any application of mind. We fail to understand what is so magical in the figure of 20%. To balance the equities, the authority may even consider directing the assessee to make a deposit of 5% or 10% of the assessed amount as the circumstances may demand as a pre-deposit. The High Pitched Assessment means where the income determined and assessment was substantially higher than the returned income. For example, twice the returned income or more. The exercise of discretion is essentially the discernment of what is right and proper; and such discernment is the critical and cautious judgment of what is correct and proper by diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act further provides that in other cases, he may pass such orders in appeal as he thinks fit. These words harmoniously read, definitely mean that powers of appellate authorities under the Act are wide enough. Such powers could not be intended to be drained out or rendered meaningless, if the power to grant stay against the recovery of disputed demand is to be taken away from the first appellate authority. Such implied, necessary and inherent power must necessarily be read into these provisions conferring the powers upon the appellate authority to modify the impugned assessment order in any manner. In specific terms, the first appellate authority can even enhance the taxable income, while he has the power to reduce or completely set at naught the assessment. The words as he thinks fit in Section 251 (1) (C) are not redundant, as no such redundancy can be attributed to the Parliament. Therefore, mere absence of words power to grant stay in Section 251 of the Act cannot mean that such powers are specifically excluded from the jurisdiction of the first appellate authority. X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. (B) Your Lordship may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned demand notices all dated 30.09.2021 for the years 2010-11 to 2020-21. (C) Your Lordships may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction directing the Respondent No.2 to consider the request of the petitioner and not to insist on any predeposit for considering the stay of the recovery of the amount which is subject matter of appeal before the Respondent No.3. (D) Pending hearing and final disposal of this petition, Your Lordships may be pleased to stay the operation and execution of the impugned order dated 8.12.2021 and 15.12.2021 passed by the Respondent No.2 and the demand notices all dated 30.09.2021 and to grant waiver of pre-deposit in the facts of the present case. (E) Pending hearing and final disposal of this petition, Your Lordships may be pleased to direct the respondents including the Respondent No.2 or the other respondent authorities under the IT Act to refrain from taking any coerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the writ applicant by way of separate assessment orders dated 30.11.2021 for the A.Y.2010-11 to 2020-21 under Section 153(A) read with Section 143(3) of the Act followed by the notice of demand dated 30.09.2021 issued under Section 156 of the Act. The assessment orders passed by the respondent No.4 for A.Y.2010-11 to 20202021 came to be challenged by the writ applicant by filing appeals before the Commissioner of Income Tax (Appeals) under Section 246 of the Act. 7.5 The chart indicating the total demand raised and the 20% of the total demand as pre-deposit in all the three captioned writ applications is as under; S.C.A. No.19804 of 2021 TOTAL DEMAND RAISED 20% OF THE TOTAL DEMAND AS PRE-DEPOSIT FOR GRANT OF STAY AGAINST RECOVERY. ₹ 373,20,42,319/- (Rs. Three Hundred Seventy Three Crores Twenty Lakhs Forty Two Thousand Three Hundred & Nineteen Only) ₹ 74,64,08,464/- (Rupees Seventy Four Crores Sixty Four Lakhs Eight Thousand Four Hundred & Sixty Four Only) S.C.A. No.19815 of 2021 TOTAL DEMAND RAISED 20% OF THE TOTAL DEMAND AS PRE-DEPOSIT FOR GRANT OF STAY AGAINST RECOVERY. ₹ 14,81,66,768/- (Rs. Fourteen Crores Eighty One Lakhs Sixty Six Thousand Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16-17 30.09.2021 507497030 279814290 8. 153A r.w.s.143(3) 2017-18 30.09.2021 1321171640 1568798260 9. 153A r.w.s.143(3) 2018-19 30.09.2021 412807900 436268606 10. 153A r.w.s.143(3) 2019-20 30.09.2021 409375481 421328404 11. 143(3) 2020-21 30.09.2021 306307820 286522898 Total 4082136411 3732042319 Further, the stay of demand has been sought by you in your case against the demand raised in above mentioned assessment years which is considered as high pitch assessment by you. 3. Stay petitions of the assessee have to be considered as per the Instruction No.1914 F. No.404/72/93 ITCC dated 21.03.1996 and further modified with Instruction No.1914 dated 31.03.2017 as it overrides all other instructions and circulars on the subject. As per the Instruction No.1914 issued by CBDT on the matter, the stay cannot be allowed on the ground that appeal has been filed in the matter. Relevant portion of the instruction is quoted below: "C. GUIDELINES FOR STAYING DEMAND: 1. A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be sufficient reason to stay the recovery of demand. A few illust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 133940038 6. 153A r.w.s.143(3) 2015-16 30.09.2021 227276710 7. 153A r.w.s.143(3) 2016-17 30.09.2021 279814290 8. 153A r.w.s.143(3) 2017-18 30.09.2021 1568798260 9. 153A r.w.s.143(3) 2018-19 30.09.2021 436268606 10. 153A r.w.s.143(3) 2019-20 30.09.2021 421328404 11. 143(3) 2020-21 30.09.2021 286522898 Total 3732042319 If you follow the schedule payment as mentioned in above table then no action will be taken to recover the remaining demand till the end of the financial year or receipt of decision of CIT(A) whichever is earlier. 6. In this regard, I am directed to request you to submit your compliance in accordance of the details asked in para 5 above on or before 15.12.2021 by 11:30 AM, failing which your stay petition dated 08.11.2021 shall be rejected." 7.8 Thus, the writ applicant was asked to adhere to the scheduled payment as contained in Para-5 aforesaid. The writ applicant was also asked to submit his compliance of the above scheduled payment on or before 15.12.2021, failing which, the stay application would stand rejected. To the aforesaid, the writ applicant filed his reply dated 15.12.2021 stating as under; "To, The Principal C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no any adverse action should be taken against the assessee for recovery of demand. Therefore, the assessee once again urges your honour to please keep the recovery of demand in abeyance till disposal of an appeal before first appellate authority. 2. Only Source of Income of Avani Petrochem Pvt. Ltd. The assessee is a director of Avani Petrochem Pvt. Ltd and the only source of income of the assessee is Avani Petrochem Pvt. Ltd. The approx. turnover of Avani Petrochem Pvt. Ltd for F.Y.2020-21 is of ₹ 125 Crore and therefore, it is apparent that income assessed for A.Y.2010-11 to A.Y.2020-21 to the tune of ₹ 408 Crore, which his 4 times higher than the aggregate turnover, seems to be unrealistic and unreasonable. 3. Stereo-type order Looking at the whole assessment, it seems that the assessing officer has passed stereo-type order with outright rejection of the stand of the assessee which is absolutely illegitimate. 4. Adverse impact on financial affairs on account of COVID-19 Due to COVID-19 pandemic, the financial affairs of the business are adversely affected across the globe. The assessee has also faced countless barriers during last 2 years. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply to this office on 15.12.2021 in response to the letter issued to you dated 08.12.2021 for the necessary compliance called for on your stay petition dated 08.11.2021 which was scheduled for hearing on 15.12.2021 in this office at 12:30 PM. Vide the letter dated 08.12.2021 you were requested to pay the 20% of the outstanding demand in your case in easy installments in order to grant stay from the recovery of balance outstanding demand in accordance with the Board's Instruction No.1914 F.No.404/72/93 ITCC dated 21.03.1996 and further modified with Instruction No.1914 dated 31.03.2017. However, you have shown your disagreement to pay the 20% of the demand raised in your case quoting the reasons discussed below:- (i) High Pitched Assessment:-Assessee has taken the contention that during the assessment proceeding for the year under consideration, the DCIT, Central Circle-2, Vadodara (AO) had made high pitched assessment in arbitrary manner and biased mind without considering the submissions/explanation and justification of the assessee. (ii) Only source of income of M/s. Avani Petrochem Pvt. Ltd.- Assessee has taken the contention that the assessee is the Director of M/s. Avani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay could be granted are:- i) if the demand in dispute relates to issues that have been decided in assessee's favour by an appellate authority or court earlier; or ii) If the demand in dispute has arisen because the Assessing Officer had adopted an interpretation of law in respect of which there exist conflicting decisions of one or more High Courts (not of the High Court under jurisdiction the Assessing Officer is working), or iii) If the high Court having jurisdiction has adopted a contrary interpretation but the Department has not accepted that judgment." 5. Hence, demand cannot be stayed especially in view of the fact that this instruction has been issued in supersession of all instruction of the subject. Though the demand is disputed but mere filing of 1st appeal before the CIT(A) cannot be a valid reason for granting stay. Therefore, your request to grant stay on the entire amount of outstanding demand in your case for the relevant years under consideration is not found to be valid in nature. 6. In view of above reasons, your stay petition dated 08.11.2021 cannot be accepted, further you are requested to pay 20% of the outstanding demand in order to avail stay on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed mechanically without any proper application of mind. He would submit that 20% of the assessed amount comes to ₹ 74,64,08,464/- and to insist such payment is as good as dismissing the appeal without any adjudication. In other words, the submissions of Mr. Hemani is that the respondent No.2, while considering grant of stay could not have mechanically directed deposit of 20% of the amount in question, more particularly, when the amount constituting 20% by itself is an astronomical figure. 9. Mr. Hemani laid much emphasis on the fact that thecase on hand is one of high pitched assessment. It is approximately 100 times of the returned income and in view of this fact alone, the writ applicant is entitled to a stay of the notices towards recovery. 10. Mr. Hemani would submit that the tendency of making high pitched assessments by the Assessing Officers is not something unknown and quite often it has caused serious prejudice to the assessee leading to a serious miscarriage of justice. At times, such high pitched assessments by the Assessing Officers may even result into insolvency or closure of the business if such power was to be exercised only in a pro-revenue manner. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent department. i.e., neither Investigating Wing nor Respondent No.4 have taken statement of person Shri Ashwin Shah who was maintaining all the records (rough pages/notings/documents) and said Shri Ashwin Shah has also filed an affidavit clearly mentioning all the notings and workings to be mere rough scribblings with no authenticity and the same cannot be taken to be the basis for income additions. (ii) Investigation wring has submitted its report to the Respondent No.4 before one and half year, however, the Respondent No.4 could not conduct any independent inquiry (Cross examination of parties) during the whole assessment proceedings which clearly shows that assessment has been framed merely on the basis of assumptions, conjecture and surmises. (iii) The respondent No.4 has issued show-cause notice to the petitioner on 23.09.2021, i.e, merely one week before 30.09.2021 (time barring date for completion of assessment) which shows that the petitioner was deliberately not given any time or sufficient/reasonable time or opportunity to justify the transactions or furnish requisite explanation. (iv) On perusal of the notices issued u/s. 142(1), it is evident that the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Shri Ashwinbhai Shah and his wife Chhayaben Ashwinbhai Shah." 15. Mr. Hemani, in support of his aforesaid submissions, has placed reliance on the following case laws; Sr.No. List of Judgments Citations 1. The Abraham Memorial Education Trust vs. The Deputy Commissioner of Income Tax, Bengaluru MANU/KA/1124/2019 2. Soul vs. Deputy Commissioner of Income Tax (2008) 220 CTR (Del.) 211 3. Flipkart India Pvt. Ltd. vs. Assistant Commissioner of Income Tax (2017) 295 CTR (Kar.) 149 4. Taneja Developers & Infrastructure Ltd. vs. Asst. Commissioner of Income Tax MANU/DE/0352/2009 5. Bhupendra Murji Shah vs. Deputy Commissioner of Income Tax MANU/TN/3920/2018 6. Kalaignar Tv Pvt. Ltd. vs. Assistant Commissioner of Income Tax MANU/TN/3920/2018 7. Vodafone M-Pesa Ltd. vs. Principal Commi. Of Income Tax MANU/MH/2302/2018 8. Aarti Sponge and Power Ltd. vs. Assistant Commi. Of Income Tax (Chhattisgarh High Court) Writ Petition No.59/2018 (judgment dt. 10.04.2018) 9. Vimalkumar Agarwal & Ors. vs. Principal Commi. Of Income Tax MANU/CG/0119/2018 10. KEC International Ltd. vs. B.R. Balkrishnan & Ors. MANU/MH/0496/2001 11. J.R. Tantia Charitable Trust vs. Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself, would not make it a case of high pitched assessment. 19. Mr. Bhatt further submitted that the powers analogous to Section 220(6) of the Act are also with the First Appellate Authority, namely, the CIT (Appeals). In other words, the powers to grant stay can be implied as inherent power of the First Appellate Authority, namely, the CIT (Appeals). Mr. Bhatt would submit that the writ applicant may not press this writ application with liberty to file appropriate application before the First Appellate Authority, namely, CIT (Appeals) and pray for an appropriate relief so far as the recovery of the demand is concerned pending the final disposal of the appeal filed by the writ applicant. 20. Mr. Bhatt, in support of his aforesaid submissions, has placed reliance on the following case laws; (i) Karmvir Builders vs. Principal Commissioner of Income Tax (Central), (2020) 113 taxmann.com 139 (SC); (ii) Sporting Pastime India Ltd. vs. Assistant Registrar, Chennai, (2020) 122 taxmann.com 44 (Madras); (iii) Gorlas Infrastructure (P.) Ltd. vs. Principal Commissioner of Income Tax, (2021) 130 taxmann.com 378 (Telangana); 21. In such circumstances, referred to above, Mr. Bhatt prays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l remains undisposed of. What is discernible from the aforesaid is that once the final order of assessment has passed, determining the liability of the assessee to pay a particular amount and such amount is not paid within the time limit as prescribed under sub-section (1) to Section 220 or during the extended time period under sub-section (3) as the case may be, then the assessee, because of the deeming fiction, would be deemed to be in default. Therefore, even if the assessee prefers an appeal challenging the assessment order before the Commissioner of Appeals as the First Appellate Authority, he would still be treated as an assessee deemed to be in default because mere filing of an appeal would not automatically lead to stay of the demand as raised in the assessment order. It is in such circumstances that the assessee has to make a request before the authority concerned for appropriate relief for grant of stay against such demand pending the final disposal of the appeal. This relief which the assessee seeks is within the discretion of the authority. In other words, the authority may grant such stay conditionally or unconditionally or may even decline to grant any stay. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 252 (AP) (at pages 268 and 269): "The Legislature has, however, chosen to entrust the discretion to them. Being to some extent in the position of judges in their own cause and invested with a wide discretion under Section 45 of the Act, the responsibility for taking an impartial and objective view is all the greater. If the circumstances exist under which it was contemplated that the power of granting a stay should be exercised, the Income-tax Officer cannot decline to exercise that power on the ground that it was left to his discretion. In such a case, the Legislature is presumed to have intended not to grant an absolute, uncontrolled or arbitrary discretion to the Officer but to impose upon him the duty of considering the facts and circumstances of the particular case and then coming to an honest judgment as to whether the case calls for the exercise of that power." 31. Being a matter of discretion, it is not possible to strait-jacket or lay down the principles on which the discretion is to be exercised. The question as to what are the matters relevant and what should go into the making of the decision by the Income-tax Officer in such circumstances has been explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r their discretionary orders susceptible to the complaint that those have been passed without any application of mind. We fail to understand what is so magical in the figure of 20%. To balance the equities, the authority may even consider directing the assessee to make a deposit of 5% or 10% of the assessed amount as the circumstances may demand as a pre-deposit. The "High Pitched Assessment" means where the income determined and assessment was substantially higher than the returned income. For example, twice the returned income or more. 33. In the aforesaid context, we may look into the decision of the Madras High Court in the case of N. Jegatheesan vs. Deputy Commissioner of Income Tax, Non Corporate Circule-2, reported in (2016) 388 ITR 410 (Mad.), wherein the Court observed in Para-14 as under; "High Pitched Assessment? means where the income determined and assessment was substantially higher than the returned income, say twice the later amount or more, the collection of the tax in dispute should be kept in abeyance till the decision on the appeal provided there were no lapses on the part of the assessee. In the instant case, the assessment in question in the pending appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion as to what would constitute the assessment order as being reasonably high pitched in consideration under the said Instruction No. 96 and, there, it has been noted by way of illustration that assessment at twice the amount of the returned income would amount to being substantially higher or high pitched. In the case before this Court in Valvoline Cummins Ltd. (supra) the assessees income was about eight (8) times the returned income. This Court was of the view that was high pitched. In the present case, the assessed income is approximately 74 times the returned income and obviously, this would fall within the expression "unreasonably high pitched". 35. We may also look into a Division Bench decision of the Delhi High Court in the case of Valvoline Cummins Limited vs. Deputy Commissioner of Income Tax & Ors., reported in (2008) 307 ITR 103 (Delhi), wherein Justice Madan B. Lokur, as His Lordship than was, in identical set of facts, observed as under; "39. Learned Counsel for the assessed also took us to the merits of the assessment order with a view to show that prima facie the demand was unreasonable in as much as the assessed was not given a proper hearing befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, 1969 would be applicable to the facts of the case. 42. Learned Counsel for the assessed has drawn our attention to several decisions of various High Courts which have interpreted the aforesaid Instruction in the way that we have read it. Some of these decisions are N. Rajan Nair v. Income Tax Officer and Anr., Mrs. R. Mani Goyal v. Commissioner of Income Tax and Anr. and I.V.R. Construction Ltd. v. Assistant Commissioner of Income Tax and Anr.. 43. Under the circumstances, we are of the view that the assessed would, in normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction." 36. The Madras High Court, in the case of Mrs. Kannammal vs. Income-tax Officer-Ward-1(1), Tripura, reported in (2019) 103 taxmann.com 364 (Madras) had the occasion to look into all the instructions/ circulars issued by the CBDT over a period of time and considering those, held as under; "7. The parameters to be taken into account in considering the grant of stay of disputed demand are well settled - the existence of a prima facie case, financial stringency and the balance of convenience. 'Financial stringency' would include within its ambit the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility: i. It shall be the responsibility of the Assessing Officer and the TRO to collect every demand that has been raised, except the following: (a) Demand which has not fallen due; (b) Demand which has been stayed by a Court or ITAT or Settlement Commission; (c) Demand for which a proper proposal for write-off has been submitted; (d) Demand stayed in accordance with paras B & C below. ii. Where demand in respect of which a recovery certificate has been issued or a statement has been drawn, the primary responsibility for the collection of tax shall rest with the TRO. iii. It would be the responsibility of the supervisory authorities to ensure that the Assessing Officers and the TROs take all such measures as are necessary to collect the demand. It must be understood that mere issue of a show cause notice with no follow- up is not to be regarded as adequate effort to recover taxes. B. Stay Petitions: i. Stay petitions filed with the Assessing Officers must be disposed of within two weeks of the filing of petition by the tax- payer. The assessee must be intimated of the decision without delay. ii. Where stay petitions are made to the authorities higher than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refunds arising, if any, against the demand. iii. Payment by instalments may be liberally allowed so as to collect the entire demand within a reasonable period not exceeding 18 months. iv. Since the phrase "stay of demand" does not occur in section 220(6) of the Income-tax Act, the Assessing Officer should always use in any order passed under section 220(6) [or under section 220(3) or section 220(7)], the expression that occurs in the section viz., that he agrees to treat the assessee as not being default in respect of the amount specified, subject to such conditions as he deems fit to impose. v. While considering an application under section220(6), the Assessing Officer should consider all relevant factors having a bearing on the demand raised and communicate his decision in the form of a speaking order. D. Miscellaneous: i. Even where recovery of demand has been stayed, the Assessing Officer will continue to review the situation to ensure that the conditions imposed are fulfilled by the assessee failing which the stay order would need to be withdrawn. ii. Where the assessee seeks stay of demand from the Tribunal, it should be strongly opposed. If the assessee presses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/ CIT, who after considering all relevant facts shall decide the quantum/ proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand.' 11. Instruction 1914 was further modified by Office Memorandum bearing number F.No.404/72/93 - ITCC dated 31.07 2017 as follows: 'OFFICE MEMORANDUM F. No. 404/72/93-ITCC dated 31.07.2017 Subject: Partial modification of Instruction No. 1914 dated 21.3.1996 to provide for guidelines for stay of demand at the first appeal stage. Reference: Board's O.M. of even number dated 29.2.2016 Instruction No. 1914 dated 21.3.1996 contains guidelines issued by the Board regarding procedure to be followed for recovery of outstanding demand, including procedure for grant of stay of demand. Vide O.M. N0.404/72/93-ITCC dated 29.2.2016 revised guidelines were issued in partial modification of instruction No 1914, wherein, inter alia, vide para 4(A) it had been laid down that in a case where the outstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and you are requested to pay the demand immediately. Notice u/s.221(1) of the Income Tax Act, 1961 is enclosed herewith.' 14. The disposal of the request for stay by the petitioner leaves much to be desired. I am of the categoric view that the Assessing Officer ought to have taken note of the conditions precedent for the grant of stay as well as the Circulars issued by the CBDT and passed a speaking order. Of course the petition seeking stay filed by the petitioner is itself cryptic. However, as noted by the Supreme Court in the case of Commissioner of Income tax vs Mahindra Mills, ((2008) 296 ITR 85 (Mad)) in the context of grant of depreciation, the Circular of the Central Board of Revenue (No. 14 (SL- 35) of 1955 dated April 11, 1955) requires the officers of the department 'to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs. .... Although, therefore, the responsibility for claiming refunds and reliefs rests with the assessees on whom it is imposed by law, officers should draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and governing principles for exercise of discretion observed, inter alia, as under: - "30. Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection: deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, between equity and colourable glosses and pretences, and not to do according to the will and private affections of persons." 41. In the case of U.P. State Road Transport Corporation and Anr. v. Mohd. Ismail and Ors.: (1991) 3 SCC 239, while dealing with the case of non-exercise of discretion by the authority, the Supreme Court expounded on the contours of discretion as also on limitations on the powers of the Courts when the matter is of the discretion of the competent authority, in the following terms: - "12. The High Court was equally in error in directing the Corporation to offer alternative job to drivers who are found to be medically unfit before di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of statute while observing, inter alia, as under: - "12. Indubitably, the powers of the High Court under Article 226 of the Constitution are wide, but certainly not wider than the plenary powers bestowed on this Court under Article 142 of the Constitution. Article 142 is a conglomeration and repository of the entire judicial powers under the Constitution, to do complete justice to the parties. Even while exercising that power, this Court is required to bear in mind the legislative intent and not to render the statutory provision otiose." 43. Thus, when it comes to discretion, the exercise thereof has to be guided by law; has to be according to the rules of reason and justice; and has to be based on the relevant considerations. The exercise of discretion is essentially the discernment of what is right and proper; and such discernment is the critical and cautious judgment of what is correct and proper by differentiating between shadow and substance as also between equity and pretence. A holder of public office, when exercising discretion conferred by the statute, has to ensure that such exercise is in furtherance of accomplishment of the purpose underlying conferment of such pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, the authority concerned can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the authority wants the assessee to so deposit. (d) The authority concerned will also examine whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order. 47. Before we close this matter, we deem fit to draw the attention of one and all to the following observations made by the Supreme Court in the case of The Income Tax Officer, III Mangalore vs. M. Damodar Bhat, reported in AIR 1969 SC 408. "We proceed to consider the next question arising in this appeal, viz., whether the High Court was right in taking the view that the Income Tax Officer did not properly exercise the statutory discretion in issuing the impugned notice with regard to the first item, viz., tax for the assessment year 1960-61 amounting to ₹ 7,056.15. It was argued on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the impugned orders passed by the respondent No.2 are set aside and the respondent No.2 is directed to consider the application filed by the writ applicant under Sections 220(3) and 220(6) respectively of the I.T. Act afresh in conformity with all the CBDT instructions and the parameters laid as above by providing an opportunity of being heard to the writ applicant and pass orders in accordance with law preferably within a period of two weeks from the date of the receipt of the writ of this order. 50. So far as the other two connected writ applications are concerned, we decline to interfere having regard to the quantum of the amount involved in both the matters. However, we leave it open for the writ applicants of both the said writ applications to file an appropriate application seeking appropriate relief before the First Appellate Authority, i.e, the CIT (Appeals). We are saying so because such powers to grant stay can be implied as inherent power of the First Appellate Authority. The powers of the Appellate Authorities are indisputably concurrent and coextensive with that of the Assessing Authority but wider and superior in nature. Section 251 of the Act clearly stipulates t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
