TMI Blog2018 (7) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner has to be dealt with by the CIT (A) on the merits of the additions made by the Assessing Officer, with a view to avoid double exercise, I propose to pass the following order, while setting aside the impugned order. Writ petition is allowed and the impugned order is set aside with a direction to the petitioner to file a stay petition before Commissioner of Income Tax (Appeals) within a period of one week from the date of receipt of a copy of this order. On receipt of the stay petition, the Commissioner of Income Tax (Appeals) is directed to afford an opportunity of personal hearing to the authorized representative of the Assessee and pass orders on the stay petition on merits and in accordance with law. It is made clear that this Court has not rendered any finding on merits of the assessment. - W.P.No.7410 of 2018 W.P.M.P.No.9203 of 2018 - - - Dated:- 16-7-2018 - T. S. Sivagnanam, JJ. For the Petitioner : Mr.P.Wilson Senior counsel for Mr.Sandeep Bagmar For the Respondents : Mr.J.Narayanasamy Standing Counsel ORDER The petitioner/Assessee has filed this writ petition challenging an order passed by the second respondent dated 21.03.2018 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Board's Instruction No.1914 read with the Office Memorandum dated 29.02.2016 and 31.07.2017 of the CBDT. Immediately thereafter, the petitioner filed a stay petition before the second respondent on 27.02.2018, which has been disposed of by the impugned order. 4. The learned senior counsel was referring to the decisions of this Court in N.Jegatheesan Vs. Deputy Commissioner of Income-Tax reported in [2016] 388 ITR 410 and submitted that when assessments are unduly high pitched, stay has to be granted when appeals are filed before Commissioner of Income Tax (Appeals). Further it is submitted that the respondent, while disposing of the stay petition, did not take into consideration the effect of the decision of the Special Court and has mechanically gone by the instruction issued by the CBDT. Therefore, it is submitted that the appeal may be directed to be disposed of and in the meantime, the notice of demand may be directed to be kept in abeyance. 5. Mr.J.Narayanasamy, learned senior standing counsel for the revenue submitted that identical submissions, as made before this Court, were made by the petitioner before the Hon'ble First Bench in a writ petition, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of illegal gratification under the laws relating to prevention of corruption, whereas the assessing officer made additions on the ground of whether the sums credited on the books of the assessee are genuine with regard to its nature and source thereof. Further by referring to the decision of the Hon'ble Supreme Court in the case of Assistant Collector of Central Excise Vs. Dunlop India Ltd., and others reported in 1985 AIR 330 (SC), it is submitted the Government cannot continue to run on mere Bank Guarantees and liquid cash is necessary for the running of a Government as indeed any other enterprises and therefore, the interest of Revenue will be protected only if the impugned order is upheld. 7. Heard Mr.P.Wilson, learned senior counsel appearing on behalf of Mr.Sandeep Bagwar, learned counsel on record for the petitioner and Mr.J.Narayanasamy, learned senior standing counsel for the respondents. 8. The second respondent, while passing the impugned order, held that the Assessment Orders cannot be stated to be high pitched. However, the second respondent has not given any finding or reasons to support such a stand as to why the assessment is not high pitched. With regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ima facie incorrect because there is substantial reference to the proceedings which were initiated by the CBI. Undoubtedly, this issue has to be considered in the pending appeals before the CIT (A). Hence, it will be incorrect to render finding on that aspect and it is left to the decision of the CIT (A). However, when a stay petition is moved before the second respondent and the petitioner refers to the effect of the judgment of the Special Court, not only in the grounds of appeal as well as in the stay petition, the second respondent was required to examine the said contention to ascertain as to whether the petitioner has made out a prima facie case and whether the balance of convenience is in their favour and whether they will be put to irreparable hardship, if interim orders are not granted. The second respondent admits in the counter affidavit that the contentions raised by the assessee will be examined by CIT (A). However, in the interregnum, as there is a threat of recovery, the second respondent ought to have considered the prima facie effect of the judgment of the Special Court on the prayer for stay of the demand. This is more so because the Assessee's consistent case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that although Instruction No.1914 of 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., (Supra) is not altered at all. This is so because paragraph No.2(A) which speaks of responsibility specifically indicates that it shall be the responsibility of the Assessing Officer and the TRO to collect every demand that has been raised except the following', which includes (d) demand stayed in accordance with the paras B and C below . Para B relates to stay petitions. As extracted above, Sub-clause (iii) of para B clearly indicates that a higher/superior authority could interfere with the decision of the Assessing Officer/TRO only in exceptional circumstances. The exceptional circumstances have been indicated as - where the assessment order appears to be unreasonably high pitched or where genuine hardship is likely to be caused to the assessee. . The very question as to what would constitute the assessment order as being reasonably high pitched in consideration under the said Instruction No.96 and, there, it has been noted by way of illustration that assessment at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the assessee. (b)In cases where the assessed income under the impugned order far exceeds returned income, the authority will consider whether the assessee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given by the authority in its order. (c)In cases where the assessee relies upon financial difficulties, the authority concerned can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the authority wants the assessee to so deposit. (d)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 take recourse to coercive action for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DT 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 obtaining after the decision of the case in Volvoline Cummins Limited Vs. DCIT (2008) 307 ITR 103 (Del) is not altered at all. This is so, the DBDT Instruction No.95, dated 21.08.1969 was issued with the consent of the informal consultative committee held on 13th May, 1969 formed under the business rules of the Parliament, which even now holds the field. 18. Hence, I am of the opinion that the tendency of making high pitched assessments by the Assessing Officer 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. Hence, I am of the opinion that the powers under Sections 220(3) 220(6) of IT Act have to be exercised in accordance with the letter and spirit of CBDT Instruction No.95 dated 21.08.1969, which is binding on all the assessing authorities created under the Act. 19.Therefore, the impugned order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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