TMI Blog2019 (5) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... tion i.e.09.04.2019. Till such time that is till 09.04.2019, stay of recovery shall be maintained. The writ petition is disposed of in the above terms. - WP. No. 9103 of 2019 And W.P.No.9623 of 2019 - - - Dated:- 27-3-2019 - Dr. Justice Anita Sumanth For the Petitioner : Mr.A.S.Sriraman For the Respondents : Mr.A.N.R.Jayapratap ORDER Heard Mr.Sriraman, learned counsel for the petitioner and Mr.A.N.R.Jayapratap, learned counsel for the respondents. By consent expressed by both learned counsel, the writ petition is taken up for disposal at admission stage itself. 2. The petitioner assails an order passed under Section 220(6) of the Income Tax Act, 1961 (in short the 'Act') in respect of the assessment year 2016-17. The petitioner is an assessee on the file of the 4th respondent. An assessment was made on the petitioner, in respect of assessment year 2016-17, as per which a demand was made for a sum of ₹ 2,09,00,205/-. The petitioner states that an appeal has been filed before the Commissioner of Income Tax (Appeals) III (CIT(A)) challenging the same. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on dated 21.01.2019 seeking stay of recovery of demand on the ground that appeal is filed before the CIT(A)-3, Coimbatore against the assessment order. The Case was posted for hearing on 15.02.2019. The assessee has filed written submission through e-mail on 11/03/2019. It is seen that the assesss has not paid any amount towards the demand raised in the assessment. It is also seen that the assessee has not paid 20% of the demand in accordance with the guidelines issued by the CBDT under Office Memorandum dated 29/02/2016 read with letter dated 31/07/2017. Therefore, the stay petition filed by the assessee on 21/01/2019 is hereby rejected and the assessee is directed to pay the demand immediately. 5. The manner of adjudication upon the stay petition leaves much to be desired. The parameters for deciding application for stay are well settled, being, existence of a prima facie case financial stringency and balance of convenience as between the parties. The aforesaid factors have to be established by the assessee and adjudicated upon by the Officer concerned in an order upon an application for stay. 6. In the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the assessees. 3. The Board desire that the above observations may be brought to the notice of all the Income-tax Officers working under you and the powers of stay of recovery in such cases up to the 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. Responsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to stay the recovery of demand. A few illustrative situations where stay could be granted are: It is clarified that in these situations also, stay may be granted only in respect of the amount attributable to such disputed points. Further where it is subsequently found that 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 situation, the stay order may be reviewed and modified. The above 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 cooperate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure would apply mutatis mutandis to demands created under other Direct Taxes enactments also.' 10. Instruction 1914 was partially modified by Office Memorandum dated 29.02.2016 taking into account the fact that Assessing Officers insisted on payment of significant portions of the disputed demand prior to grant of stay resulting in extreme hardship for tax payers. Thus, in order to streamline the grant of stay and standardize the procedure, modified guidelines were issued which are as follows: '....... (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 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 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is found to be on the lower side. Accordingly. it has been decided that the standard rate prescribed in O.M. dated 29.2.2016 be revised to 20% of the disputed demand, where the demand is contested before CIT(A). Thus all references to 15% of the disputed demand in the aforesaid O.M dated 29.2.2016 hereby stand modified to 20% of the disputed demand. Other guidelines contained in the O.M. dated 29.2.2016 shall remain unchanged. These modifications may be immediately brought to the notice of all officers working in your jurisdiction for proper compliance.' 12. The Circulars and Instructions as extracted above are in the nature of guidelines issued to assist the assessing authorities in the matter of grant of stay and cannot substitute or override the basic tenets to be followed in the consideration and disposal of stay petitions. The existence of a prima facie case for which some illustrations have been provided in the Circulars themselves, the financial 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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