TaxTMI 
TaxTMI 
2019 (12) TMI 990
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....ent points of time, as to the course to be pursued in granting stay of recovery proceedings by the authorities of the Department. 2. Heard Mr. Neelabh Dubey, the learned counsel for the Appellant and Ms. Naushina Afrin Ali, the learned Standing Counsel for the Department. 3. When the matter was taken up for consideration, this Court expressed a doubt as to the very maintainability of the appeal, with reference to the proviso to Sub-section (1) of Section 2 of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006 (for short, 'the Act, 2006'). This was answered by the learned counsel for the Appellant, as maintainable, in view of the nature of challenge raised and the facts and figures involved. In the said circumstance, before considering the legal question, a brief reference to the factual matrix is felt necessary. 4. The Appellant is an Assessee on the files of the 3rd Respondent. There was a 'Search and Seizure' in the premises of the Appellant in terms of Section 132 of the IT Act, setting the proceedings in motion on 20.03.2007. The case was assessed by the Assistant Commissioner of Income Tax Circle (1)(1), Bilaspur, which subsequently came to ....
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....d Respondent. 6. The case projected before this Court is that, various Circulars have been issued by the CBDT invoking the power under Section 119 of the IT Act and by virtue of Annexure-P/6 Circular of the year 1996, a policy decision was taken to grant absolute stay by the Assessing Officer, if it was a case of 'high-pitched assessment' i.e., if it was two or more times of the returned income, till the appeal was finalized. 7. The above Circular was modified as per the Circular No. 1914F dated 02.12.1993. Clause iii of heading 'B. Stay Petitions :' reads as follows : "iii. The decision in the matter of stay of demand should normally be taken by Assessing Officer/TRO and his immediate superior. A higher superior authority should interfere with the decision of the AO/TRO only in exceptional circumstances; e.g., where the assessment order appears to be unreasonably high-pitched or where genuine hardship is likely to be caused to the assessee. The higher authorities should discourage the assessee from filing review petitions before them as a matter of routine or in a frivolous manner to gain time for withholding payment of taxes." The said Circular envisages ....
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....urt 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 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." 8. Shortly thereafter, it was observed by the CBDT that the Circular issued to streamline the process and granting stay and standardization of the quantum of lump-sum payment required to be paid as a pre condition of stay, insisting satisfaction of 15% itself was not adequate in the normal circumstance and hence the stipulation was sought to be varied as per OM dated 31.07.2017, whereby instead of 15%, it was enhanced and modified to 20% of the disputed demand. The said Circular reads as follows : "Instruction No. 1914 dated 21.3.1996 contains guidelines issued by the Board regarding proced....
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.... in Principal Commissioner of Income Tax 5 v. LG Electronics India Pvt. Ltd. 2018 SCC OnLine SC 1214, a Division Bench judgment of the Delhi High Court in Taneja Developers & Infrastructure Ltd. v. Assistant Commissioner of Income Tax, Delhi & Ors. (2010) 324 ITR 247 and a Single Bench judgment of the Karnataka High Court in Flipkart India Private Limited v. The Assistant Commissioner of Income Tax, Circle 3(1) (1) [2017] 396 ITR 551 (KAR)]. 10. The learned counsel for the Appellant submits that the 'high-pitched assessment', as in the instant case, stands different from the regular assessment and it is in this peculiar circumstance, that interim stay was to be granted as a matter of policy right from 1969, though with some modification as per the subsequent Circulars including Annexure-P/6 and P/9. In the case of the Appellant, the returned income was only Rs. 1,12,31,353/-; whereas the assessment reckoned the income of Rs. 87,36,07,803/-, which is higher by several folds and is undisputedly an instance of 'high-pitched assessment' governed by the above Circulars and hence the Appellant is entitled for stay. 11. The version of the Department, as submitted by th....
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....ifferent from the power of the 'Appellate Authority' to grant stay in appropriate cases with or without any conditions. There is no case for the Appellant that he has filed any application for stay before the Appellate Authority i.e. the 2nd Respondent or that it has been rejected. The Statutory Authority for considering and deciding the appeal (the 2nd Respondent) or the power of the Appellate Tribunal to consider the correctness of such orders passed by the Appellate Authority in terms of the provisions under the IT Act cannot be said as governed by the Circulars and it is always open for the Appellate Authority to grant even absolute stay in appropriate cases, if such circumstances are established by the Appellant. It is not a case where any 'pre-deposit' is insisted so as to entertain the appeal or the application for interim stay (filed before the Appellate Authority/2nd Respondent). No such obligatory provision is brought to the notice of this Court governing the right of appeal. As such, it may not be correct to say that the right of appeal or the right to file application for stay during pendency of the appeal is defeated because of the orders passed by the ....
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.... the disposal of this petition. (v) That, this Hon'ble Court may kindly be pleased to direct the respondent authorities that they expeditiously decide the appeal and the stay application of the petitioner. (vi) That, this Hon'ble Court may further be pleased to hold that the instant case involves high pitched assessment and thus the amount shall not be recovered till the pendency of the appeal from the petitioner/assessee. (vii) Any other relief or relief(s) which this Hon'ble Court may deem fit or proper in the facts and circumstances of the case." From the above, it is clear that all the prayers in 'paragraph 10', except prayer in paragraph (v), seek for stay of operation of the orders under challenge / recovery pending appeal before the 2nd Respondent {prayers at sub-clauses (ii), (iii) (iv) and (vi)}. In other words, the 'interim relief' sought for in the I.A. is virtually the 'main relief' sought for in the writ petition. It has been held by the Apex Court in Bank of Maharashtra v. Race Shipping and Transport Co. Pvt. Ltd. and Another (1995) 3 SCC 257 that no final relief can be granted in the form of interim relief. The operative....
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.... interim order passed by the learned Single Judge. Admittedly, the order dated 05.09.2019 is an interim order passed by the learned Single Judge in I.A. No. 1 of 2019. By virtue of the statutory bar, no appeal can be entertained against such an order. 17. The scope of the above provision had come up for consideration before this Court and a question was framed as follows: "Whether the proviso to Section 2(1) of the Act, 2006 is an absolute bar to entertain an appeal against an interlocutory order without considering the scope of the order and without considering whether the interlocutory order has decided the rights of the parties and has an element of finality attached to it ?" The aforesaid question was referred to a Full Bench. After threadbare analysis of the relevant provision and the binding precedents, the Full Bench answered the question in the following terms: "We therefore answer the question referred to us by holding that proviso to Section 2(1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006 bars appeals against those interim orders which are totally interlocutory in nature, do not decide matters of moment and do not have an element of fina....