Case Law Details
Ahmed Memorial Education Society Vs CIT (Telangana High Court)
The Telangana High Court, in the case of Ahmed Memorial Education Society Vs CIT, pronounced that administrative circulars do not bind the Commissioner of Income Tax (CIT) in tax disputes. The court’s decision came in response to an order directing the petitioner to pay 20% of disputed demands. This article delves into the court’s ruling and its implications on the petitioner.
Background of the Case: The petitioner sought relief against an order demanding payment pursuant to an assessment order, relying on a circular dated 31.07.2017. However, the Telangana High Court referred to the Supreme Court’s decision in the LG Electronics case, clarifying that administrative circulars do not act as constraints on quasi-judicial authorities like the Commissioner.
Challenging the Impugned Order: The petitioner challenged the order dated 30.10.2023, arguing that the authority mechanically applied the circular, disregarding the Supreme Court’s position. The court found the impugned order unjustified, directing a fresh consideration of the interim application, emphasizing the authority’s discretion.
Discretionary Authority and Circulars: The Telangana High Court highlighted that the authority should exercise discretion judiciously based on individual case facts, rather than relying mechanically on administrative circulars. The court found the impugned order legally untenable in the context of the LG Electronics case.
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