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TMI Blog2015 (12) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... r is an assessee of income tax, having permanent account No.ADWPJ 3312 K/1(2)/MDU with the status as 'individual'. Original return of income was filed by the petitioner on 30.09.2012 for the assessment year 2012-2013 for the accounting period 01.04.2011 to 31.03.2012, wherein the total income of the petitioner was furnished as Rs. 4,91,680/- and agricultural income to the tune of Rs. 45,00,000/-. After deducting rebate on agricultural income Rs. 40,80,000/- and adding education cess, income tax was furnished by the petitioner as Rs. 96,309/-. Further, advance tax amount of Rs. 25,000/- was paid on 15.12.2011. Adding interest under Sections 234(B) and 234(C) of the Income Tax Act, 1961, net tax to the tune of Rs. 78,150/- was paid under Section 140-A of the Income Tax Act,1961. However, notices under Section 143(2) dated 14.08.2013 and Section 142(1) dated 14.07.2014 of the Act 1961 were issued by the respondent to the petitioner under Computer Aided Scrutiny Selection (CASS), requiring the petitioner to produce the books of accounts. On receipt of notice, the petitioner appeared on the dates of hearing before the respondent and produced necessary information and particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t verified the above facts and accepted the extent of land owned and leased and crops cultivated thereon namely Jamine and Gloriosa Superba and passed orders dated 31.03.2014 under Section 143(3) of the Income Tax Act. However, for the assessment year 2012-2013, the respondent made high pitched assessment, by assessing the total income as Rs. 59,91,680/- and declined to accept the agricultural income of Rs. 45,00,000/- as well as Rs. 5,00,000/- each repaid to the petitioner's own brother totaling Rs. 10,00,000/- from out of the petitioner's current account, which formed part of the return of income filed by the petitioner, as verified and certified by the Charted Accountant. 2-4. Against the order of assessment passed by the respondent, the petitioner has filed an appeal under Section 246A of the Income Tax Act, on 22.04.2015 and the same is still pending. Sections 246, 246A, 250 and 251 of the Income Tax Act, do not confer any specific power on the Commissioner of Income Tax (Appeals), the first appellate authority, to grant stay against the recovery of disputed demand. Hence, a petition under Sections 220(3) & 220(6) of the Income Tax Act was filed by the petitioner on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not proved the same to the satisfaction of the Assessing Officer. Taking into account various factors, the petitioner/assessee was requested to pay 50% of the disputed demand. Recovery will not defeat the purpose of appeal, since excess recovery, if any, will be refunded to the petitioner/assessee, as per the procedure laid down in the Income Tax Act, 1961. The petitioner/assessee has not explained how the balance of convenience is in favour of him, especially when he has not proved the agricultural operations. Merely because the petitioner/assessee has filed appeal before CIT (A), a blanket stay cannot be granted automatically. The respondent/Assessing Officer has a duty to collect the taxes as per the provisions of Income Tax Act, 1961, CBDT Circulars and Principles laid down by Courts in various case laws. As such, merely because absolute stay was not granted, it cannot be claimed by the petitioner/assessee that the Assessing Officer has not used his discretion. In fact, CBDT Instruction 95, dated 21.08.1969, has been superseded and the Assessing Officer has to exercise his discretion as per Instruction No.1914 dated 02.12.1993. In the instant case, the Assessing Officer has use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g appeal. But, the respondent rejected the said petition and directed the petitioner to pay 50% of the demand amount, pending appeal. 6. The learned counsel for the petitioner submitted once the demand under Section 156 of IT Act, 1961 was issued prescribing the period of 30 days from the date of service of notice, the assessee should pay the same, otherwise penalty and interest will flow against the assessee. 7. In fact, since the respondent is pressing hard and taking coercive steps for recovery, the petitioner filed a writ petition in W.P. (MD).No.12666 of 2015, for disposal of the appeal. This Court has also passed an order on 20.08.2015 in the said writ petition, directing the Commissioner of Income Tax (Appeals) to dispose of the appeal preferred by the petitioner within a period of six months. Now, pending the appeal, the impugned orders have been passed by the respondent directing the petitioner to pay 50% of the demand amount as per the CBDT Instruction No.1914, dated 02.12.1993 and to pay the balance amount after the disposal of the appeal. 8. Now, it is the contention of the learned counsel for the petitioner that since the assessment made by the petitioner is a high ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it to impose in the circumstances of the case. Section 220(6):- Whereas assessee has presented an appeal under Section 246 (or Section 246A) the (Assessing) Officer may in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment was expired, as long as such appeal remains undisposed of." 14. It is stated that on receipt of notice under Section 156 of the IT Act, if the amount specified in the demand notice is not paid within the period mentioned under Sub-Section 1, the assessee is liable to pay simple interest at 1% for every month or part of a month, commencing from the day immediately following the end of the period mentioned in sub-section 1 and ending with the day, on which the amount is paid. Section 220(3) purports very clearly, without prejudice to the notice of demand under Section 156, that the discretion has been conferred on the Assessing Officer either to extent time for payment or allow payment by installment, subject to such conditions as he may think fit to impose the circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction No.1914 dated 02.12.1993. But, the learned counsel for the petitioner, by relying upon number of judgments submitted that CBDT Instruction No.95 is still in force. 17. Therefore, it would be appropriate to refer some of the decisions in this regard. In the case of Taneja Developers & Infrastracture Ltd., Vs. Assistant Commissioner of Income Tax, Delhi & ors in W.P.(C).No.6956 of 2009, dated 24.02.2009 , the Division Bench of Delhi High Court has held as follows:- "8.Relying upon the said Instruction No. 1914 of 1993, Mr.Jolly submitted that all previous instructions stood superseded which included the supersession of said Instruction 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 of 1993 specifically states that it is in supersession of all earlier instructions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate. The value of the estate which was determined by the authority was much more than twice the returned value. Hence, the Instruction No.96 of August 21, 1969, was applicable. It was also established that the accountable person had no cash belonging to the estate. A perusal of the order of the Tribunal indicated that the contention raised by the petitioner before the Tribunal for staying the total recovery was not contraverted and no relevant and convincing material regarding the financial status of the petitioner was placed before the Tribunal to establish that the petitioner was in a position to deposit 25 per cent of the disputed duty. The recovery of the entire duty had to be stayed till the disposed of the appeal." In the case reported in 2011 ITR 158 Bom [Kec International Ltd Vs. B.R.Balakrishnan and ors], the Bombay High Court has held as follows:- ".....Hence, we intend to lay down certain parameters which are required to be followed by the authorities in cases where a stay application is made by an assessee pending appeal to the first appellate authority. (a) While considering the stay application, the authority concerned will at least briefly set out the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s always to be exercised in favour of revenue rather than assessee. 53. The tendency of making high pitched assessments by the Assessing Officers is not unknown and it may result in serious prejudice to the assessee and miscarriage of justice & sometimes may even result into insolvency or closure of the business if such power was to be exercised only in a pro revenue manner. It may be like execution of death sentence, whereas the accused may get even acquittal from higher appellate forums or courts. Therefore, this Curt is of the opinion that such powers under subsection (6) of Section 220 of the Act also have to be exercised in accordance with the letter and spirit of Instruction No.95 dated 21.08.1969, which even now holds the field and its spirit survives in all subsequent CBDT Circulars quoted above, and undoubtedly the same is binding on all the assessing authorities created under the Act." From the reading of the above cited judgments, it is clear that it is incorrect to state that DBDT Instruction No.1914, dated 02.12.1993 supersedes all previous instructions. Although instruction No.1914 specifically states that it is in supersession of earlier instructions, the position ..... X X X X Extracts X X X X X X X X Extracts X X X X
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