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TMI Blog2017 (9) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... o 15% of the demand came to be rejected. The Principal Commissioner reiterated the stand of the department that the petitioner must deposit 50% of the dues in order to enjoy stay against recovery of the rest of the amount. 2. Brief facts are as under. 3. Petitioner is an individual and is a government contractor carrying out construction activities. For the assessment year 2014-15, the petitioner had filed the return of income on 29.11.2014 declaring total income of Rs. 48,20,010/. The Assessing Officer undertook the scrutiny assessment and passed the order under section 143(3) of the Act on 30.12.2016 determining total income of the petitioner at Rs. 3,38,00,260/. In such order the Assessing Officer made sizable additions. Resultantly, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made by the assessee. It is this order the petitioner has challenged in the present petition. 6. In order to streamline the process of granting stay and to standardize the quantum of lumpsum payment required to be made by the assessee as a precondition for stay of demand disputed before the Commissioner of Income Tax (Appeals), the CBDT in its circular dated 29.02.2016 has issued certain guidelines. Relevant portion of this circular reads as under: "3. It has been reported that the field authorities often insist on payment of a very high proportion of the disputed demand before granting stay of the balance demand. This often results in hardship for the taxpayers seeking stay of demand. 4. In order to streamline the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er considering all relevant facts shall decide the quantum proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. (C) In a case where stay of demand is granted by the assessing officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative Pr. CIT/CIT for a review of the decision of the assessing officer. (D) The assessing officer shall dispose of a stay petition within 2 weeks of filing of the petition. If a reference has been made to Pr. CIT/CIT under para 4(B) above or a review petition has been filed by the assessee under para 4 (C) above, the same shall also be disposed of by the Pr. CIT/CIT within 2 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to standardize the quantum of lumpsum payment is required to be made. 8. In this background, if we peruse the guidelines, clause (A) of para 4 prescribes as a general thumb rule insistence of collecting 15% of the demand pending appeal, subject to which stay would be granted against recovery of the rest of the amount. Clause (B) of para 4 envisaged situations where this standard formula of 15% predeposit would be deviated from. Under subclause (a) it would be open for the Revenue authorities to demand higher amount than 15% and if subclause (b) applied, such requirement could be reduced. Clause (E) of para 4 authorizes the Assessing Officer to impose suitable conditions to safeguard the interest of the Revenue. 9. Subclause (a) of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the interest of the Revenue while granting stay against recovery of the further amount. In that view of the matter, the Commissioner was correct in recording in the impugned order that the examples cited in subclause (a) of clause (B) of para 4 enabling the Revenue authorities to increase the percentage of predeposit over 15% are not meant to be exhaustive. The instances cited in the said subclause are merely by way of providing examples. However, the fair reading of the circular which aims to bring in a certain standardization in the process of collecting disputed tax pending appeal, would persuade us that the increase of 15% outside of the examples cited in subclause (A) should be in special or exceptional cases after recording reasons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When the petitioner had no idea on what grounds the authorities primafacie thought that the standard formula of granting stay on depositing 15% of the disputed tax demand would not be appropriate, it was incumbent upon the Revenue to put such reasons to the petitioner enabling the petitioner to meet with such grounds and oppose higher collection by raising suitable defense. 13. In the result, impugned order dated 30.06.2017 is set aside. The Principal Commissioner shall pass a fresh order after first providing the reasons which had weighed with the Assessing Officer in proposing and the Principal Commissioner in approving collection of 50% of the demand pending appeal to the petitioner, giving him reasonable time to respond. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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