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TMI Blog2014 (5) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... ut and polished diamonds, that it does not have any local sales, that the assessee also imports of rough diamonds, that in order to safe guard and hedge itself against foreign exchange fluctuation it enters into forward foreign exchange contracts with banks against the export orders, that the assessee has earned foreign exchange fluctuation gains on actual realization of exports of Rs. 3, 74, 87, 486 and has paid/ incurred loss on cancellation of forward foreign exchange contract entered into with banks of Rs. 2, 00, 60, 098 in the course of the business, that the Return of Income was filed on 22. 9. 2009 declaring total income at Rs. 92, 46, 635/-, that the assessment order u/s 143(3) was passed on 30. 12. 2011 assessing income at Rs. 2, 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition making following observation: "As the petitioner's first appeal has been disposed off by the CIT(A) and the matter is now pending in appeal before ITAT, I do not have legal authority u/s 220(6) to entertain the stay petition in question. Hence, the same is rejected as untenable" It has been further mentioned that the CIT -16 failed to appreciate and erred on the fact that the penalty order has been passed by FAA and there has been no appeal before him i. e. FAA, that the first appeal has been filed before ITAT. 2. During the course of hearing before us, Authorised Representative(AR)of the assessee reiterated the same argument that are part of the stay application or the affidavit. He further stated that balance of convenience wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal was disposed off by the FAA. In the matter under appeal demand has arisen because of the order of the FAA and first appeal against the order of the FAA is pending before the Tribunal. It appears that his office has rejected the petition in a mechanical fashion. His order for rejecting the petition is not a speaking order. 3.2. We find that in the case of New Rupayan Jewellers(314ITR288)Hon'ble Calcutta High Court has dealt with the issue of rejection of stay application, when appeal is filed. In that matter an assessment order for the assessment year 2006-07 was passed and notice of demand calling upon the assessee to pay a sum of Rs. 10, 27, 028 was raised. The petition for granting stay of realisation of the demand was rejected on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und and viable to deposit the amount. (iv) The authority concerned will also examine whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may have recourse to coercive action for which brief reasons may be indicated in the order. In the case of KLM Royal Dutch Airlines(332ITR224), Hon'ble Delhi High Court has dealt the similar issue and has held that that the order refusing stay under section 220(6) of the Act must be a composite order and that it must also specifically deal with the existence of prima facie case. From the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. It should appear from the order that there was application of mind by the authority dealing with the petition. 3. 3. In the case under consideration, the assessee has not been heard and the order of the CIT-16 is very short and cryptic. It is found that the guidelines issued by the Hon'ble jurisdictional high court in the case of KEC International Ltd. (supra)have not also been followed. The basic fact of disposal of appeal by the FAA is incorrect. In these circumstances, we are of the opinion, in the interest of justice matter should be restored to the file of CIT-16, Mumbai. He is directed to pass a speaking and reasoned order, keeping in view the above referred observations made by us, within a period of one month from the date of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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