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TMI Blog2019 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... n application for stay of recovery of demand under Section 220(6) of the Act on 19.01.2019 before the respondent. The application for grant of stay was filed on the sole ground that the assessee had preferred an appeal against the order of assessment which is pending before the first Appellate Authority. The petition for stay came to be disposed of by the Respondent by order dated 25.01.2019. 5. Mr.S.Sathiyanarayanan, learned counsel for the petitioner would submit that the petitioner is a housewife and has challenged the assessment before the Appellate Authority on various grounds. According to him, Instruction No.96[F.No.1/6/69/-ITCC] dated 21.08.1969 issued by the Central Board of Direct Taxes states that no recovery should be effected of a disputed demand where the determination of tax in an assessment is substantially higher than the returned income. The Instruction is binding on all Income Tax Authorities under section 119 of the Act. The aforesaid circular has been consistently followed in several decisions by High Courts including the jurisdictional High Court viz., i)N.Jegatheesan V. Deputy Commissioner of Income-tax, Madurai [[2015] 64 taxmann.com 339 (Madras) and ii) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage of first appeal may be exercised by the Inspecting Assistant Commissioner/Commissioner of Income-tax' 9. Thereafter, Instruction No.1914 was issued by the CBDT on 21.03.1996 and states as follows: 1. Recovery of outstanding tax demands [Instruction No. 1914 F. No. 404/72/93 ITCC dated 2-12-1993 from CBDT] The Board has felt the need for a comprehensive instruction on the subject of recovery of tax demand in order to streamline recovery procedures. This instruction is accordingly being issued in supersession of all earlier instructions on the subject and reiterates the existing Circulars on the subject. 2. The Board is of the view that, as a matter of principle, every demand should be recovered as soon as it becomes due. Demand may be kept in abeyance for valid reasons only in accordance with the guidelines given below : A. Responsibility: i. It shall be the responsibility of the Assessing Officer and the TRO to collect every demand that has been raised, except the following: (a) Demand which has not fallen due;(b) Demand which has been stayed by a Court or ITAT or Settlement Commission;(c) Demand for which a proper proposal for write-off has been submitted;(d) D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illustrations are, of course, not exhaustive. ii. In granting stay, the Assessing Officer may impose such conditions as he may think fit. Thus he may - a. require the assessee to offer suitable security to safeguard the interest of revenue; b. require the assessee to pay towards the disputed taxes a reasonable amount in lump sum or in instalments; c. require an undertaking from the assessee that he will co-operate in the early disposal of appeal failing which the stay order will be cancelled. d. reserve the right to review the order passed after expiry of a reasonable period, say up to 6 months, or if the assessee has not co-operated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; e. reserve a right to adjust refunds arising, if any, against the demand. iii. Payment by instalments may be liberally allowed so as to collect the entire demand within a reasonable period not exceeding 18 months. iv. Since the phrase "stay of demand" does not occur in section 220(6) of the Income-tax Act, the Assessing Officer should always use in any order passed under section 220(6) [or under section 220(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case falls in the category discussed in pars (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 favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.) or, (b) 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 lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/ CIT, who after 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 deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial stringency faced by an assessee and the balance of convenience in the matter constitute the 'trinity', so to say, and are indispensable in consideration of a stay petition by the authority. The Board has, while stating generally that the assessee shall be called upon to remit 20% of the disputed demand, granted ample discretion to the authority to either increase or decrease the quantum demanded based on the three vital factors to be taken into consideration. 13. In the present case, the assessing officer has merely rejected the petition by way of a non-speaking order reading as follows: 'Kindly refer to the above. This is to inform you that mere filing of appeal against the said order is not a ground for stay of the demand. Hence your request for stay of demand is rejected and you are requested to pay the demand immediately. Notice u/s.221(1) of the Income Tax Act, 1961 is enclosed herewith.' 14. The disposal of the request for stay by the petitioner leaves much to be desired. I am of the categoric view that the Assessing Officer ought to have taken note of the conditions precedent for the grant of stay as well as the Circulars issued by the CBDT and passed a spea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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