TMI Blog2022 (11) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... d considering the assets while ignoring the liability part had rejected the stay application holding the financial position of the petitioner to be strong enough and directed for depositing 20% of the disputed amount of tax. This Court finds that while considering the stay application, neither the Deputy Commissioner of Income Tax nor Principal Commissioner of Income Tax had considered three basic principles i.e. prima facie case, balance of convenience and irreparable loss, as held by Delhi High Court in Tata Teleservices Limited [ 2022 (3) TMI 1403 - DELHI HIGH COURT] In the result, the writ petition is partly allowed. The orders impugned are hereby set aside and the matter is remitted back to the Deputy Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2021 a notice under Section 148 of Act of 1961 for reassessment was issued to which reply was filed by the petitioner. During pendency of the proceedings, the assessment proceedings were transferred to the National Faceless Assessment Centre (hereinafter called as NFAC ) . On 08.02.2022, a notice under Section 142(1) of the Act of 1961 was issued by NFAC and details of purchases and records, maintained by the petitioner as per Rule 6DD of the Income Tax Rules, 1962 (hereinafter called as Rules of 1962 ), were sought to which reply was furnished on 09.03.2022 by the petitioner. Another notice was issued on 26.03.2022 asking for several details relating to cash purchases and disallowance under Section 40A(3) of the Act of 1961 read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kesh Ranjan Agarwal, Senior Advocate, appearing for the petitioner submitted that the Assessee had filed appeal before Commissioner of Income Tax (Appeals) on 25.04.2022 i.e. within a period of 30 days from the date of assessment. An application as per provision of Section 220(6) of the Act of 1961 was also filed within time, as such the Assessee cannot be treated to be Assessee-in-default . According to him, under the Act of 1961, there is no requirement for filing stay application. He next contended that cardinal principles for consideration of stay of demand is that before warranting for enforcement of payment/recovery of such high pitched demand, the authorities should see that, whether there is strong prima facie case of the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be made. 8. He has relied upon decision of Apex Court in Principal Commissioner of Income-Tax vs. GEE Square Exports (2019) 260 Taxman 175 (SC) as well as decisions of different High Courts in Writ Tax No. 294 of 2010 (M/s Jeet Construction Company vs. Assistant Commissioner of Income Tax and others) decided on 24.02.2020 , KEC International Ltd. vs. B.R.Balakrishnan (2001) 119 Taxman 974 (Bombay); Flipkart India (P.) Ltd. vs. Assistant Commissioner of Income-tax, Circle 3(1)(1), Bengaluru (2017) 248 Taxman 555 (Karnataka); Tata Teleservices Limited vs. Commissioner of Income Tax, International Taxation-3 Another in Writ Petiton (C) No.4660 of 2022 decided on 23.03.2022 by the Delhi High Court and decision of High Court of Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned tax demand i.e. 20% of the outstanding demand. 11. According to the Department counsel, nowhere in the stay application it has been pressed by the Assessee that its financial position was critical and was not in the position to deposit 20% of the outstanding demand, as directed by the authority. 12. I have heard the respective counsel and perused the material on record. 13. It is a case where the appeal filed by the Assessee petitioner is under consideration before Deputy Commissioner of Income Tax (Appeals). The dispute is as to the deposit of 20% of the disputed demand raised subsequent to the reassessment made by the Income- Tax Authorities. 14. Section 220(6) of the Act of 1961 reads as under : (6) Where an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the outstanding demand of tax, which is matter of dispute in appeal. 18. However, the word discretion , which occurs in the aforesaid provision of law, does not give a blanket power to the Assessing Officer. He has to exercise his discretion within the four corners of law and while passing an order imposing a condition, he has to justify his action. 19. In the instant case, the Deputy Commissioner of Income Tax while passing the order dated 30.08.2022 had solely relied upon the circular of 2016, which was partially modified in the year 2017 and directed for deposit of 20% of the disputed amount of tax and rejected the stay application while the Principal Commissioner of Income Tax proceeded to consider the audit report and ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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