TMI Blog2020 (3) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 on Tuesday, the 24th of March, 2020 at 10.30 a.m. without expecting any further notice in this regard along with relevant materials in support of his submission. After taking into account the submissions made by the petitioner, a speaking order shall be passed within a period of four (4) weeks from 24.03.2020, i..e, on or before 21.04.2020. Till such time, no recovery proceedings shall be initiated. - Writ Petition No.6466 of 2020 and WMP. No.7646 of 2020 - - - Dated:- 12-3-2020 - THE HONOURABLE DR. JUSTICE ANITA SUMANTH For the Petitioner : Mr. P. V. Sudakar For the Respondents : Mr. A. P. Srinivas Senior Standing Counsel ORDER Mr.A.P.Srinivas, learned Senior Standing Counsel accepts notice for the respondents and is ready to proceed with the matter. 2. Heard Mr.P.V.Sudakar, learned counsel for the petitioner and Mr.A.P.Srinivas, learned Senior Standing Counsel for the respondents. By consent of both sides, the Writ Petition is disposed finally at the stage of admission. 3. The challenge is to a stay order passed by the Principal Commissioner of Income Tax, Salem/R1 dated 17.02.2020 in the following terms: 'The assessee has made payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for stay of disputed demand. 8. In addition, periodic Instructions/Circulars in regard to the manner of adjudication of stay petitions are issued by the Central Board of Direct Taxes (CBDT) for the guidance of the Departmental authorities. The one oft-quoted by the assessee is Office Memorandum F.No.1/6/69/-ITCC, dated 21.08.1969 that states as follows: '1. One of the points that came up for consideration in the 8th Meeting of the Informal Consultative Committee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion should be communicated to the assessee and the Assessing Officer immediately. 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. 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 co-operated in the early disposal of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii. Appeal effects will have to be given within 2 weeks from the receipt of the appellate order. Similarly, rectification application should be decided within 2 weeks of the receipt t hereof. Instances where there is undue delay in giving effect to appellate orders, or in deciding rectification applications, should be dealt with very strictly by the CCITs/CITs. 3. The Board desires that appropriate action is taken in the matter of recovery in accordance with the above procedure. 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: '... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed demand unless the case falls in the category discussed in para (B) thereunder. Similar references to the standard rate of 15% have also been made in succeeding paragraphs therein. 2. The matter has been reviewed by the Board in the light of feedback received from field authorities. In view of the Board s efforts to contain over pitched assessments through several measures resulting in fairer and more reasonable assessment orders, the standard rate of 15% of the disputed demand 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 authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant of stay, it is incumbent upon the assessing officer to examine the existence of a prima facie case as well as call upon the assessee to demonstrate financial stringency, if any and arrive at the balance of convenience in the matter. ' 6. Mr.Srinivas states that the Princpial Commissioner of Income Tax is an administrative authority and therefore has exercised the power rightly in granting the instalment scheme. 7. Be that as it may, it is incumbent upon the authoirty who has jurisdiction to consider the application for stay in proper perspective. Be it an Administrative or Appellate Authority, it is necessary that while considering the stay application, the tri-fold aspects of prima facie case, financial stringency and balance of convenience are taken into account, both to protect the interests of the Department as well as to take into account the submissions of the assessee in proper perspective. 8. I am of the considered view that has not been done in the present case. Hence, the impugned order is set aside. The petitioner will appear before the Principal Commissioner of Income Tax/R1 on Tuesday, the 24th of March, 2020 at 10.30 a.m. without expecting any fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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