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2019 (5) TMI 357 - BOMBAY HIGH COURTStay of demand against the recovery - collecting 20% disputed tax pending appeal - order of assessment pending appeal filed by the Petitioner before the CIT (A) - HELD THAT:- We are of the opinion that the normal formula contained in CBDT circular of collecting 20% disputed tax pending appeal, cannot be applied in the present case. It emerges from the record that the Petitioner's transactions are subject-matter of proceedings before the SEBI. In an interim order, after bi-parte hearing, the SEBI had noticed several disturbing features in Petitioner's activity of buying and selling derivatives. The SEBI had expressed strong prima-facie opinion that this is a case of contrived loss. In other words, the loss as claimed by the Petitioner for set off, is not genuine. We do not think that the Petitioner can avoid recovery of tax by offering to pay a mere 20% of the disputed amount. At the same time, recovering entire tax pending appeal would also be harsh. The CBDT circular dated 31/07/2017 gives sufficient discretion to the departmental authorities to govern the situation pending appeal. Nevertheless, such discretion cannot be exercised in an unjust manner. Considering the facts and circumstances of the case, on one hand looking to the strong prima-facie case against the Petitioner and on the other hand the fact that the Petitioner's first appeal before the Commissioner is pending, we dispose of the petition with the following directions: (i) The Petitioner shall deposit 50% disputed tax with the Department which would include the amounts already deposited / recovered so far. This condition shall be fulfilled latest by 06/06/2019. (ii) For the remaining 50%, the Petitioner shall provide security to the satisfaction of the Assessing Officer. (iii) The Petitioner shall file an undertaking that these conditions will be fulfilled. Such undertaking shall be filed latest by 10/05/2019 in the Registry of this Court. iv) Upon such undertaking being filed and in anticipation of the conditions being fulfilled, there shall be stay against the recovery till the disposal of the appeal by the Commissioner.
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