TMI Blog2020 (3) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... any further notice in this regard. The Assessing Authority is directed to reconsider the stay application filed by the petitioner keeping in mind the order aforesaid setting out the guidelines of the CBDT, as well the applications under Section 154 and pass orders within a period of six (6) weeks from date of first hearing. Till such time, no further recovery proceedings be initiated. - Writ Petition No.5767 & 5775 of 2020, W.M.P.No.6748 to 6750 & 6752 of 2020 - - - Dated:- 6-3-2020 - Dr. Justice Anita Sumanth For the Petitioner in both WPs : Mr.Ashwini Vaidialingam for Mr.Arun Karthik Mohan For the Respondent in both WPs : Mr.Prabu Mukund Arun Kumar Junior Standing Counsel COMMON ORDER The petitioner is an individual who has challenged an order dated 04.02.2020 rejecting his application for stay of demand arising from an assessment for Assessment Year (AY) 2017-18, passed in terms of the provisions of the Income Tax Act, 1961 (in short 'Act'). 2. The said assessment is stated to be in appeal before the Commissioner of Income Tax (Appeals) (in short 'CIT(A)'). The Assessing Officer has, in the meantime, disposed the stay application by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was that income-tax assessments were often arbitrarily pitched at higher figures and that the collection of disputed demand as a result thereof was also not stayed in spite of the specific provision in the matter in s. 220(6) of the IT Act, 1961. 2. The then Deputy Prime Minister had observed as under : .........Where the income determined on assessment was substantially higher than the returned income, say twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeal provided there were no lapses on the part 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 instruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. C. Guidelines for staying demand: i. A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be a sufficient reason 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 cooperated 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 amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. The Assessing Officer or the TRO, as the case may be, and his immediate superior officer shall be held responsible for ensuring compliance with these instructions. 4. This procedure 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The Board has, while sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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