TMI Blog2017 (3) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to pay 15% of the disputed demand amount or not? Yet the Assessing Officer has failed to do so. Therefore, this part of the order, naturally, suffers from being a non-speaking order. Hence, the said orders are legally unsustainable. A bare perusal of the order dated 25.1.2017 also reveals that the Prl. CIT has failed to appreciate the co-relation between Circular No.1914, and Circular dated 29.2.2016. The Prl. CIT has failed to notice the fact that the latter Circular has only "partially modified" the former Circular, and has not totally superceded it. The Prl. CIT has also ignored the fact that Instruction No.2-B(iii) contained in Circular No.1914 continues to exist independently of and in spite of the Circular dated 29.2.2016. Therefore, it has failed to consider the issue whether the assessment orders suffers from being "unreasonably highpitched", or whether "any genuine hardship would be caused to the assessee" in case the assessee were required to deposit 15% of the disputed demand amount or not? Thus, the Prl. CIT has failed to apply the two important factors mentioned in Circular No.1914. This Writ Petition is, hereby, allowed. The twin orders dated 23.11.2016, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -13, 2013-14, 2014-15, and also for the Assessment Year 2015-16. 3. On 28.10.2016, the petitioner's Income Tax Return for the Assessment Year 2014-15 was selected for scrutiny under Section 143(2) of the Income Tax Act, 1961 ('Act' for short). Meanwhile, for the Assessment Year 2015-16, the petitioner filed its Income Tax Return on 10.9.2015, wherein it had declared that again it suffered a loss of ₹ 7,96,34,36,865/-. On 28.10.2016, two separate assessments orders were passed, namely for the Assessment Year 2014-15, and 2015-16. For the Assessment Years 2014-15, an amount of ₹ 5,01,86,62,282/- was added, whereas, for the Assessment Year 2015-16, an amount of ₹ 12,04,67,98,537/- was added. The balance tax payable by the petitioner was determined to be ₹ 28,94,96,028/- for the Assessment Year 2014-15, and ₹ 1,36,99,99,033/- for the Assessment Year 2015-16. The petitioner was directed to deposit the said amount within a period of thirty days. 4. Challenging both the Assessment Orders, the petitioner filed Appeals before the Commissioner of Income Tax (Appeals) ('CIT (A)' for short). Moreover, while filing the appeals, it filed tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly modified by the Circular dated 29.2.2016. However, the Circular No.1914 was never superceded, in toto, by the subsequent Circular dated 29.2.2016. The partial modification merely relates to streamlining the process of granting stay, and for standardising the quantum of lumpsum payment required to be made by the assessee as a pre-condition for stay of disputed demand before the CIT (A). Furthermore, according to the learned Senior Counsel, while Instruction No.4(A) in Circular dated 29.2.2016 seems to prescribe the minimum percentage that would be required to be deposited by the assessee as 15% of the disputed demand, but Instruction Nos.4(B)(a), and 4(B)(b) sufficient discretionary power to either ask for a higher amount than 15%, or a lower amount than 15%, respectively. The discretion is bestowed upon the Assessing Officer. But, in case the Assessing Officer were to demand less than 15%, he is required to seek the permission from the Prl. CIT. Moreover, according to Instruction No.4(C) of the said Circular, in case the assessee is aggrieved by the fact that the Assessing Officer has stayed the demand of 15% of the disputed demand should be deposited, but the assessee is still ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of stay. According to him, the assessee would be entitled to deposit less than 15% of the disputed demand amount, provided where addition on the same issue has been deleted by the Appellate Authorities in earlier years, or the decision of the Hon'ble Supreme Court, or of the jurisdictional High Court, was in favour of the assessee . According to the learned counsel, the petitioner's case does not fall in either of these two categories. Secondly, Instruction No.4(A) of the Circular No.1914 prescribes, as a general rule, that 15% of the disputed demand amount has to be deposited by an assessee. Therefore, both the Assessing Officer, and the Prl. CIT were justified in directing the petitioner to deposit 15% of the disputed demand amount. Thirdly, the petitioner is running a business concern. It has neither made out any case that it is facing hardship, nor revealed any circumstance which would impose a hardship upon the petitioner, in case it were to be asked to deposit 15% of the disputed demand amount. Thus, the learned counsel has supported the three impugned orders. 8. Heard the learned counsel for the parties, perused the impugned orders, and considered the Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of stay of disputed demand before CIT (A). Since the Circular No.1914 is silent on this aspect, the vacuum has been filled up by Circular dated 29.2.2016. The relevant extract of Circular dated 29.2.2016 is as under : 4. In order to streamline the process of grant of stay and standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition for stay of demand disputed before CIT (A), the following modified guidelines are being issued in partial modification of Instruction No.1914 : (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder. (B) In a situation where, (a) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular dated 29.2.2016 merely prescribed the percentage of the disputed demand that needs to be deposited by the assessee. 15. According to Instruction No.4(A) of Circular dated 29.2.2016, it is a general rule, that 15% of the disputed demand should be asked to be deposited. But, according to Instruction No.4(B)(a) of the Circular dated 29.2.2016, the demand can be increased to more than 15%; according to Instruction No.4(B)(b) of the Circular dated 29.2.2016, the percentage can be lower than 15%, provided the permission of the Prl. CIT is sought by the Assessing Officer. However, in case the Assessing Officer does not seek the permission from the Prl.CIT, and in case the assessee is aggrieved by the demand of 15% to be deposited, the assessee is free to independently approach the Prl. CIT. The assessee would be free to request the Prl. CIT to make the percentage of disputed demand amount to be less than 15%. 16. It is true that Instruction No.4 (B)(b) of the Circular dated 29.2.2016, gives two instances where less than 15% can be asked to be deposited. However, it is equally true that the factors, which were directed to be kept in mind both by the Assessing Officer, and by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t independently of and in spite of the Circular dated 29.2.2016. Therefore, it has failed to consider the issue whether the assessment orders suffers from being unreasonably highpitched , or whether any genuine hardship would be caused to the assessee in case the assessee were required to deposit 15% of the disputed demand amount or not? Thus, the Prl. CIT has failed to apply the two important factors mentioned in Circular No.1914. 19. Most curiously, the Prl. CIT has relied upon the case of M/s.Teleradiology Solutions Pvt. Ltd., (supra), without realizing that the issue whether an assessee can be directed to pay 15% of the disputed demand amount, and under what circumstances he can be so directed, and under what circumstances less than 15% of the disputed demand amount could be asked for, these issues were not even involved in the case of M/s.Teleradiology Solutions Pvt. Ltd.,(supra). Despite the fact that totally different issues were raised in the said case, the Prl. CIT has blindly applied the order passed in the said case to the present case. Considering the fact that this blind appreciation of a precedent is a frequent occurrence, in catena of cases, the Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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