TMI Blog2008 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for stay of the demand before the Assessing officer, out of the cash seized. i.e. 17.92 lakhs. An amount of Rs. 17 lakhs was adjusted towards the demand by the department. Further a sum of Rs. 2.24 lakhs was recovered from the petitioner. Thereafter, the Assessing officer passed an order on the petitioner’s stay application by staying 50 percent of the outstanding demand. The petitioner also filed an appeal against the assessment order which was pending before the Commissioner (Appeals). On a writ petition contending that the returned income was Rs. 10.16 lakhs where the assessed income was very high pitched and in view of that the petitioner would be entitled to a stay and the notice ought to be quashed. Held that- allowing the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar notice of the same date has also been issued to the manager, Syndicate Bank, Nehru Place, New Delhi where the petitioner also holds an account. 2. The effect of these notices is that the entire banking operations of the petitioner have come to a stand-still. The notices have been issued because there is a demand outstanding against the petitioner. On November 2, 2004, a search was conducted in the business premises of the petitioner. In the course of search cash to the extent of Rs. 17.92 lakhs was seized, which was later on found to be accounted for. On December 29, 2006, the assessment order was passed assessing the petitioner's income at approximately Rs. 7.59 crores as against the returned income of approximately Rs. 10.16 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the bank guarantee which had been given by the petitioner in favour of the Department. The total recovery, therefore, till date comes to Rs. 73,56,661. 5. Several demand notices were issued by the Department. The petitioner filed another stay application before the Assessing Officer on January 22, 2008, which was rejected on the very next day, i.e., January 23, 2008. On the same date, the petitioner filed an application for stay before the jurisdictional Commissioner, namely, Commissioner of Income-tax, Delhi Central - II. Thereafter, the said Commissioner of Income-tax fixed the date of hearing as February 14, 2008 but, according to the learned counsel for the respondent, nobody appeared on behalf of the assessee. However, according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The observations of the then Deputy Prime Minister were noted. The observations were to the effect that where the income determined on assessment was substantially higher than the returned income, say, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeals, provided there were no lapses on the part of the assessee. The Central Board of Direct Taxes, by virtue of the said Instruction No. 96, desired that the above observations of the then Deputy Prime Minister be brought to the notice of all the Income-tax Officers and that the powers of stay on recovery in such cases be exercised, up to the stage of first appeal, by the Inspecting Assistant Commissioner/Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand for which a proper proposal for write off has been submitted; (d) Demand stayed in accordance with paragraphs B and C below: (ii) Where demand in respect of which a recovery certificate has been issued or a statement has been drawn, the primary responsibility for the collection of tax shall rest with the TRO. (iii) It would be the responsibility of the supervisory authorities to ensure that the Assessing Officers and the TROs take all such measures, as are necessary to collect the demand. It must be under stood that mere issue of a show-cause notice with no follow up is not to be regarded as adequate effort to recover taxes. B. Stay petitions: (i) Stay petitions filed with the Assessing Officers must be disposed of within tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Instructions No. 96. He further submitted that paragraph No. 2 (C), which deals with guidelines for staying demand, specifically requires that a demand be stayed only if there are valid reasons for doing so and that a mere filing of an appeal against the assessment order will not be a sufficient reason for staying recovery of a demand. 9. Having considered the arguments advanced by the learned counsel for the parties, we are of the view that although Instruction No. 1914/1993 specifically states that it is in supersession of all earlier instructions, the position obtaining after the decision of this court in Valvoline Cummins Ltd.'s case [2008] 307 ITR 103 is not altered at all. This is so because paragraph No. 2 (A) which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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