1 2025:CGHC:40585 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 98 of 2025 Bali Nagwanshi S/o Shri Butter Nagwanshi, Aged About 59 Years, R/o H.No.-87, Sun City, Dr. Shyama Prasad Mukherjee Ward, Lalbagh, Jagdalpur, Bastar, Chhattisgarh ... Petitioner(s) versus 1 - Union Of India, Through Its Secretary, Ministry Of Finance, (Department Of Revenue), No.137, North Block, New Delhi – 110001 2 - Principal Chief Commissioner Of Income Tax (MP And CG) Bhopal, Aayakar Bhawan, 48, Arera Hills, Hoshangabad Road, Bhopal, Madhya Pradesh – 462011 3 - Principal Commissioner Of Income Tax - 1 Raipur, having his Office at Central Revenue Building, Civil Lines, Raipur, Chhattisgarh – 492001 4 - Assistant Commissioner of Income Tax Central-1(1), Raipur, having his office at Central Revenue Building, Civil Lines, Raipur, Chhattisgarh – 492001 SHYNA AJAY Digitally signed by SHYNA AJAY DN: cn=SHYNA AJAY, o=PERSONAL, st=Chhattisgarh, c=IN 2 5 - Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi ... Respondent(s) For Petitioner(s) : Mr. Nikhilesh Begani and Mr. Apurv Goyal, Advocates For Respondents(s) : Mr. Ajay Kumrani, Advocate Hon'ble Shri Justice Deepak Kumar Tiwari Judgment on Board 12/08/2025 1. Though the matter is listed in default, but learned counsel for the appellant is not relying on the pages, in which, default has been pointed out. Hence, the default pointed out by the Registry is ignored. 2. With the consent of learned counsel for the parties, the matter is heard finally. 3. This petition has been filed under Article 226 of the Constitution of India praying for the following relief(s) : “1. That, this Hon'ble Court may kindly be pleased to issue a writ/writs, direction/directions, order/orders quashing the impugned order dated 06/12/2024 and order dated 30/05/2025 as being illegal, arbitrary, perverse and passed in violation of principles of natural justice; 2. That, this Hon'ble Court may kindly be pleased to issue a writ/writs, direction/directions, 3 order/orders to the Respondent authorities to stay the effect and operation of the impugned assessment order and demand notice, both dated 25/03/2024 as passed by Respondent No. 4, till the pendency of first appeal before Respondent No. 5; 3. Alternatively, this Hon'ble Court may kindly be pleased to issue a writ in the nature of mandamus directing the Respondent No. 5 to decide appeal filed by the petitioner at an earliest after giving due opportunity of hearing to the petitioner and following the law laid down by the court of law; 4. Alternatively, this Hon'ble Court may kindly be pleased to issue a writ in the nature of mandamus directing the Respondent No. 3 to decide the Application filed by the petitioner praying for grant of priority/out of turn hearing of appeal and till the time the same is decided, the Respondent authorities be restrained from initiating any coercive action(s) against the petitioner; 5. Alternatively, this Hon'ble Court may kindly be pleased to issue a writ in the nature of mandamus directing the Respondent No.3 to consider the precarious financial condition of the Petitioner and reduce the instalment amount of Rs 5 lakhs to a reasonable amount; 6. That, this Hon'ble Court may kindly be pleased to grant any other relief(s), which is deemed fit and proper in the aforesaid facts and circumstances of the case.” 4. Brief facts of the case are that the petitioner/assessee filed his return of income under Section 139(1) of the Income Tax Act, 1961 (for short “the Act, 1961”), for the Assessment Year 2022-23. His case was selected for 4 scrutiny under CASS, and a notice was issued under Sections 143(2) and 142 of the Act, 1961. The Faceless Assessment Officer passed an assessment order under Section 144 read with Section 144B of the Act, 1961 determining the total income of the petitioner at ₹46,66,01,759/- as against the returned income of ₹27,46,480/-. Aggrieved by the assessment order, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) and also moved an application for stay of demand under Section 220(6) of the Act before the jurisdictional Assessing Officer. The said application was decided with a direction to the petitioner/assessee to deposit 20% of the total demand, in view of the CBDT Office Memorandum dated 29.02.2016, which was subsequently modified by the Office Memorandum dated 31.07.2017. Against the said order, the petitioner filed a Review Petition before the Principal Commissioner of Income Tax (PCIT), which was rejected. Thereafter, the petitioner filed WPT No. 64/2025, which was decided by this Court by order dated 25.04.2025. By the said order, the matter was remitted to the Reviewing Authority to pass a fresh and reasoned order. Simultaneously, a direction was also issued to decide the appeal expeditiously. In pursuance of the said order, the impugned order dated 30.05.2025 has been passed by invoking review 5 jurisdiction, whereby the petitioner/assessee was directed to pay ₹5 lakhs per month until 20% of the outstanding demand {post adjustment of amount recovered under Section 226(3)} is paid, or until the decision of the CIT (Appeals) is received, whichever is earlier. Hence, this Petition. 5. Learned counsel for the petitioner submits that in the impugned order, the authority has calculated the annual income of the petitioner/assessee to be ₹19 lakhs per annum. He further submits that the assessment made by the Faceless Assessment Officer is highly inflated, as against the returned income of ₹27,46,480/-, the ex-parte tax assessment has been made at ₹46,66,01,759/-, which is around 170 times higher than the returned income. Consequently, the resulting demand is also 161 times higher than the returned income, indicating a case of high- pitched assessment. 6. Learned counsel for the petitioner would further submit that under Section 220(6) of the Act, 1961, there is no statutory mandate requiring the deposit of 20% of the tax demand for grant of stay or for restricting the right of appeal of an assessee. He also submits that in an identical issue, in respect of the Office Memorandum dated 31.07.2017, whereby, a direction was issued for pre- deposit as a condition for hearing of the appeal, came 6 under consideration before the Hon’ble Supreme Court in Principal Commissioner of Income Tax 5 and Others Vs. LG Electronics India Private Limited, reported in (2018) 18 SCC 447, wherein, it was held that such administrative circular will not operate as a fetter on the Commissioner since it is a quasi judicial authority. It was further clarified 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 appeal. He further submits that the petitioner has a good prima facie case, but the direction to deposit 20% of the demand in installments as a precondition causes undue hardship to the assessee. While deciding the review application, the authorities failed to consider the aspects of prima facie merit, likelihood of success, and undue hardship. He also submits that the term 'hardship' has been interpreted by the Hon’ble Supreme Court in the judgment rendered by the Supreme Court in the matter of Benara Valves Ltd. And others Vs. Commissioner of Central Excise and another, (2006) 13 SCC 347, vide paragraphs 13 to 15, which read as follows: 13. For a hardship to be 'undue' it must be shown that the particular burden to have to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit 7 which the applicant would derive from compliance with it. 14. The word "undue" adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The other aspect relates to imposition of condition to safeguard the interest of revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate condition as required to safeguard the interests of revenue. 7. Learned counsel for the petitioner further submits that in an identical case, the Division Bench of this Court, in W.A. No. 195/2024 (order dated 24.09.2024), pertaining to a high-pitched assessment of the total returned income, not only directed the appellate authority to decide the appeal expeditiously but also granted a concession in favour of the assessee with respect to the deposit. Accordingly, it is prayed that this petition be allowed and an appropriate direction be issued. 8. On the other hand, learned counsel for the Revenue submits that pursuant to the said order passed by this Court, a detailed order dated 30.5.2025 has been passed. He further submits that while passing the aforesaid order, 8 all relevant aspects were duly considered, including the financial position of the assessee. It is also submitted that during the relevant period of challenge, the petitioner not only availed a new loan after repaying the earlier one, but also purchased a high-value vehicle costing Rs. 50 lakhs through a loan, despite claiming financial hardship during the same period. 9. Heard learned counsel for the parties and also perused the documents annexed with the petition with utmost circumspection. 10. Evidently, the assessee declared a returned income of Rs. 27,46,480/-. However, the Faceless Assessment Officer passed an ex-parte assessment order determining the total income at ₹46,66,01,759/-, which is about 170 times higher. 11. Undisputedly, the Revenue has already seized the assessee’s bank account as well as immovable property, and his annual income has been reported to be Rs. 19 lakhs. Therefore, considering his financial position, the condition imposed for hearing the appeal requiring the assessee to pay Rs. 5 lakhs per month until 20% of the outstanding amount is paid, appears to be onerous, causing undue hardship to the assessee in pursuing the appeal against the impugned order. 9 12.Considering all the aspects of the matter, it is directed that the Appellate Authority shall consider and decide the subject appeal in accordance with law, expeditiously, preferably within an outer limit of four months, from the date of receipt of a certified copy of this order. Until the said appeal is decided by the appellate authority, the assessee is directed to pay a sum of Rs.1,00,000/- (Rupees One Lakh only) per month, either until 5% of the outstanding demand is paid or the decision of the Appellate Authority is received, whichever is earlier. 13.It is further made clear that the assessee shall not alienate or mortgage any immovable property owned by him without the prior written permission of the concerned jurisdictional Assessing Officer and this restriction shall be subject to the outcome of the appeal. 14.With the aforesaid observations/directions, the Petition is disposed of. Sd/- (Deepak Kumar Tiwari) Judge Shyna