TaxTMI 
TaxTMI 
2008 (5) TMI 20
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion by the Additional Commissioner of Income Tax. The returned income was Rs. 7.5 crores and on 31^st December, 2007 the Additional Commissioner assessed the income at Rs. 58.68 crores. There was, therefore, an eight-fold increase between the returned income and the assessed income. The tax liability on the assessed income works out to about Rs. 25.01 crores. 5. Feeling aggrieved by the assessment order, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] on 31^st January, 2008. 6. On 1^st February, 2008, the Assessee moved an application before the Assessing Officer (the Additional Commissioner) requesting for a stay of the enforcement of the tax demand. This application was moved under Section 220(6) of the Act which reads as follows: - 220. When tax payable and when assessee deemed in default. (1) to (5) xxx xxx xxx (6) Where an assessee has presented an appeal under section 246 or section 246A 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 disput....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Deputy Commissioner in which the Assessee stated that the direction to deposit 15% of the tax liability is an ad-hoc direction and even though the Assessee was entitled to a stay, but with a view to avoid litigation, the Assessee was agreeable to pay 15% of the tax as ordered by the Deputy Commissioner, but it was requested that the Assessee may be permitted to make the deposit in installments. 14. Since there was no immediate response to its latest request, the Assessee apprehended some coercive action to recover the balance amount of tax and so it approached this Court with the present writ petition. 15. On 27^th March, 2008 when the matter was taken up for preliminary hearing, it was contended by learned counsel for the Petitioner that the Assessing Officer of the Assessee is the Additional Commissioner and, therefore, the application for stay filed under Section 220(6) of the Act could have been heard and disposed of only by the Additional Commissioner. It was also contended that even though the letters dated 8^th February, 2008 and 22^nd February, 2008 had been responded to by the Deputy Commissioner, the original request made by the Assessee to the Additional Commiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of this Act, and the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under clause (b) of sub-section (4) of that section to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Act. 22. A perusal of the above would show that an Assessing Officer is a person who is vested with relevant jurisdiction by virtue of an order passed under Section 120(1) or Section 120(2) of the Act. An Additional Commissioner can also be an Assessing Officer if he is directed under Section 120(4)(b) of the Act to exercise or perform all or any of the powers and functions of an Assessing Officer. 23. As we have mentioned above, the CBDT has issued a Notification dated 17^th September, 2001 under Section 120(4)(b) of the Act conferring the powers of an Assessing Officer on an Additional Commissioner of Income Tax. To this extent th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tween them. This is what the Calcutta High Court had to say: - Concurrent jurisdiction means a sub-ordinate authority can deal with the matter equally with any superior authority in its entirety so that either one of such jurisdictions can be invoked. It cannot be construed as concurrent jurisdiction when one part of the assessment will be dealt with by one superior officer and the other part will be dealt with by one subordinate officer. 29. It appears to us quite clearly that there is a distinction between concurrent exercise of powerand joint exercise of power. When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise the power by any one of those authorities, that exercise must be terminated by that authority only. It is not that one authority can start exercising a power and the other authority having concurrent jurisdiction can conclude the exercise of that power. This perhaps may be permissible in a situation where both the authorities jointly exercise power but it certainly is not permissible where both the authorities concurrently exercise power. One example that immediat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iple of delegatus non potest delegare would clearly apply. It is only the CBDT or the Commissioner who could have divested the Additional Commissioner of the power to deal with an application under Section 220(6) of the Act. The Additional Commissioner could not suo motu divest himself of this power and confer it upon a junior functionary such as the Deputy Commissioner he had no such authority 33. Under the circumstances, we are of the opinion that learned counsel for the Assessee is right in his contention that the application filed by the Assessee on 1^st February, 2008 was required to be dealt with only by the Assessing Officer, which in this case was the Additional Commissioner. 34. Learned counsel for the Revenue submitted that by addressing further letters to the Deputy Commissioner on 8^th February, 2008 and 22^nd February, 2008, the Assessee had acquiesced in the jurisdiction or power of the Deputy Commissioner to deal with the application for stay filed by the Assessee. We are of the opinion, and this is well settled, that mere acquiescence in the exercise of power by a person who does not have jurisdiction to exercise that power, cannot work as an estoppel against ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... having been given by the Assessee. If it is true that the Assessee had given consent, there is no question of giving a hearing to the Assessee nor is there any occasion for the Deputy Commissioner to give reasons but since we have found that no such consent was given by the Assessee, the very basis of the order dated 27^th February, 2008 falls through, and it must be set aside on that ground. 39. Learned counsel for the Assessee 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 Assessee was not given a proper hearing before the assessment order was framed. We are not inclined to delve into this issue because that is a matter which has to be decided by the CIT (A) but we may note (for the purposes of only deciding this writ petition) that there is substance in the contention of the Assessee that the assessment order is extremely harsh. 40. It may be recalled that the returned income of the Assessee was Rs. 7.25 crores, but the assessed income is Rs. 58.68 crores, which is almost 8 times the returned income. In this regard, learned counsel has drawn our attention to Instruction No. 96 dated 21^....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hra Pradesh). 43. Under the circumstances, we are of the view that the Assessee would, in normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction. 44. Finally, learned counsel for the Assessee has pointed out, and we are of the view that he is correct in his submission, that the stand of the Revenue seems to be that the petition for stay filed by the Assessee is still pending and, therefore, we should direct the Assessee to appear before the Deputy Commissioner for a hearing of the stay petition. 45. Apart from the fact that we have found that the Deputy Commissioner has no jurisdiction to hear the stay petition, we find it odd that the Revenue is seeking to enforce the demand when the petition for stay is still pending. It is rather unfortunate that instead of deciding the application under Section 220(6) of the Act, which according to the Revenue is still pending, it is seeking to enforce the demand. This is putting the cart before the horse. 46. For all these reasons, we are of the view that the prayer made by the Assessee in the writ petition for quashing the requirement of the Petitioner having to deposit 15% of the net de....