Bali Nagwanshi Vs Union of India (Chhattisgarh High Court)
In the case of Bali Nagwanshi vs. Union of India, the Chhattisgarh High Court addressed a petition filed under Article 226 of the Constitution of India, seeking relief against a high-pitched income tax assessment and the subsequent conditions for the stay of demand. The petitioner, Bali Nagwanshi, challenged an assessment order that determined his income at an astonishing ₹46.66 crore, a figure approximately 170 times higher than his declared income of ₹27.46 lakh. The case highlighted the conflict between administrative directives and judicial discretion, particularly concerning the pre-deposit requirements for filing an appeal.
In this case Petitioner(s) were represented by Mr. Nikhilesh Begani and Mr. Apurv Goyal, Advocates.
Background of the Case
The petitioner’s troubles began after his income tax return for the Assessment Year 2022-23 was selected for scrutiny. An ex-parte assessment order, passed by a Faceless Assessment Officer, drastically inflated his taxable income. This led to a huge tax demand. To challenge this, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals) and simultaneously requested a stay of the demand under Section 220(6) of the Income Tax Act, 1961. The tax authorities, referencing a Central Board of Direct Taxes (CBDT) Office Memorandum, initially directed him to deposit 20% of the total demand to secure the stay.
