TMI Blog2020 (2) TMI 1696X X X X Extracts X X X X X X X X Extracts X X X X ..... adhakrishnan for Mr.J.Lenin For the Respondents : Mr.A.N.R.Jeya Prathap Standing Counsel ORDER The petitioner has assailed order dated 07.02.2020, disposing a stay application filed by the petitioner in respect of a disputed demand arising from order of assessment passed in terms of the Income Tax Act, 1961 ('Act') in respect of assessment year (AY) 2017-18. 2. A perusal of the order reveal that there has been no application of mind by the Assessing Officer in considering the trifolds aspects of (i) prima facie case (ii) financial stringency and (iii) balance of convenience, prior to disposal of the application. The impugned order is extracted below: The assessment for the A.Y.2017-18 was completed on 25.12.2019 and demand of ₹ 4,70,46,715/- was raised vide demand notice dated 25.12.2019. The Assessee vide letter dated 03.02.2020 stated that he/she has filed appeal before CIT(A), Salem and requested to keep the demand in abeyance till the disposal of appeal. Further, it is seen from the record that assessee has not paid 20% of disputed demand as per CBDT circular 1914 modified notification dated: 31.07.201. Therefore, the stay petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. Responsibility: i. It shall be the responsibility of the Assessing Officer and the TRO to collect every demand that has been raised, except the following: (a) Demand which has not fallen due;(b) Demand which has been stayed by a Court or ITAT or Settlement C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement 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 co-operate 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 cooperated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; e. reserve a right to adjust refunds arising, if any, against the demand. iii. Payment by instalments may be liberally allowed so as to collect the entire demand within a reasonable period not exceeding 18 months. iv. Since the phrase stay of demand does not occur in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding 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 years or the decision of the Supreme Court /or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.) or, (b) 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 lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot 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 stating generally that the assessee shall be called upon to remit 20% of the disputed demand, granted ample discretion to the authority to either increase or decrease the quantum demanded based on the three vital factors to be taken into consideration. 13. In the present case, the assessing officer has merely rejected the petition by way of a non-speaking order reading as follows: 'Kindly refer to the above. This is to inform you that mere filing of appeal against the said order is not a ground for stay of the demand. Hence your request for stay of demand is rejected and you are requested to pay the demand immediately. Notice u/s.221(1) of the Income Tax Act, 1961 is enclosed herewith.' 14. The disposal of the req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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