Administrative Circular will not Operate as Fetter on Commissioner of Income Tax, remands to Consider Matter Afresh: Telangana HC allows to Operate Bank Account as Interim Measure [Read Order]

The Telangana High Court has held that administrative circular will not operate as a fetter on the commissioner of Income Tax and remanded the matter to be afresh. The Court allowed the operation of bank accounts as an interim measure.

Mr. Naga Deepak, representing Mr. Katika Ravinder Reddy, counsel appearing for the petitioner, Mr Radha Krishna and Mr A. Rama Krishna, Senior Counsel for respondents Nos.1 to 5 and Mr B.Mukharjee, counsel appeared on behalf of Mr Gadi Praveen Kumar, Deputy Solicitor General of India, for respondent No.6. 

The petitioner challenged the order passed by respondent No.1, whereby the application filed by the petitioner seeking for a stay of collection of demands raised under the assessment order which has been decided in terms of the Circular dated 31.07.2017 and the petitioner has been directed to pay 20% of the disputed demand.

The Supreme Court in the case of Principle Commissioner of Income Tax v. LG Electronics India Private Limited, held that the Additional Solicitor General of India on behalf of the Income Tax Department itself has made a statement before the Supreme Court that the administrative circular will not operate as a fetter on the Commissioner since it is a quasi-judicial authority. It was clarified by the Supreme Court that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending the appeal.

The authority concerned had the discretion to pass an appropriate order in the given factual circumstances of the appeal which was pending before the authorities concerned. The authority concerned could not have mechanically relied upon the circular dated 31.07.2017 while passing the said order.

The petitioner submitted that the petitioner’s establishment is now fixed for the reason that they have collected the examination fees from all the students and the examination fees without late fees have to be deposited on or before 17.01.2024. 

 “Because the educational career of the students is at stake, and if the bank account of the petitioner stands frozen, the students at large may not be able to participate in the examination, as an interim measure, the respondents should be directed to ensure that the petitioner would be permitted to operate the bank account to the extent of payment of the examination fees required in respect of the students from whom the examination fees have already been collected by the petitioner. It is ordered accordingly. So far as the interim application is concerned, the authority is expected to decide on its own merits at the earliest before 31.01.2024 itself. “, Justice P Sam Koshy and Justice N Tukaramji held.

Since considerable time has already lapsed, the court directed the petitioner to appear before the concerned authority for a personal hearing.

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