2023 (5) TMI 421 - HC - Income Tax

Court Overturns PCIT Decision for Lack of Reasoning, Orders New Review with Consideration of Petitioner's Hardships.

Kunj Bihari Lal Agarwal S/o Shri Ram Avtar Agarwal Versus Principal Commissioner Of Income Tax (Central), Jaipur, Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur, Assistant Commissioner Of Income Tax, Central Circle-2, Jodhpur

Kunj Bihari Lal Agarwal S/o Shri Ram Avtar Agarwal Versus Principal Commissioner Of Income Tax (Central), Jaipur, Deputy Commissioner Of Income Tax, ... Issues:The judgment involves a writ petition challenging an order passed by the respondent PCIT, Jaipur regarding the stay of recovery of demand for assessment years 2014-15, 2016-17, and 2020-21.Brief Facts:A survey under Section 133A of the Income Tax Act, 1961 was conducted at the petitioner's premises leading to reopening of assessments for the mentioned years. The petitioner filed an appeal before the Appellate Authority against the assessment orders. Significant demand amounts were raised against the petitioner based on the assessments.Contentions and Arguments:The petitioner claimed that the demand should be stayed until the appeal is disposed of, citing high-pitch demand and the quasi-judicial nature of the authority. The petitioner alleged that the impugned order was passed mechanically without considering relevant factors and was contrary to circulars issued by the revenue department. The petitioner argued that the authority could order a deposit amount lower than 20% of the demand.Reply and Support:The respondent justified the impugned order, stating that the assessments were made after the petitioner failed to provide satisfactory explanations. The respondent contended that the order was in line with circulars and office memorandums. Counsel for the respondents supported the order, stating that no interference was warranted.Judgment:The High Court found that the impugned order lacked reasoning and failed to address the hardships pointed out by the petitioner. Referring to relevant case law, the Court emphasized that the authority could grant a deposit order of a lesser amount than 20%. The Court held that the impugned order was not sustainable and quashed it, remanding the matter to the respondent to pass a fresh order considering all relevant factors and providing a hearing to the petitioner. The Court directed the respondent to do so expeditiously within six weeks.Conclusion:The writ petition was allowed, the impugned order was set aside, and the matter was remanded for a fresh decision by the respondent, emphasizing the authority's discretion to grant a deposit order of less than 20% based on individual case circumstances.