2014 (8) TMI 1003 - HC - Income Tax

Court directs reconsideration of stay application by ACIT, emphasizes legal precedents

The High Court set aside the Additional Commissioner of Income Tax's order rejecting the petitioner's stay application, directing reconsideration by the ... Stay application - Held that:- We feel that it would be appropriate if the ACIT reconsiders the application of the petitioner for stay in the light of the observations contained in the said decision of SOUL Versus DEPUTY COMMISSIONER OF INCOME-TAX [2008 (8) TMI 502 - DELHI HIGH COURT ]. This is so because according to the petitioner the assessment is a high pitched one inasmuch as it is approximately 17 times of the returned income. Consequently, we set aside the impugned order dated 06.08.2014 and remit the matter to the ACIT, Range-3, New Delhi for a fresh consideration of the stay application filed by the petitioner after taking into account the above mentioned decision of this court. Issues:1. Rejection of stay application by the Additional Commissioner of Income Tax.2. Interpretation of relevant instructions and court decisions.3. Consideration of high-pitched assessment.Analysis:1. The writ petition challenged the order dated 6-8-2014, where the Additional Commissioner of Income Tax, with the approval of the CIT, Delhi-I, rejected the petitioner's stay application. The High Court reviewed the impugned order and relevant instructions to determine the appropriate course of action.2. The court examined Instruction No. 96 of 1969 and Instruction No. 1914 of 1993, along with previous court decisions such as Soul v. Dy. CIT and Valvoline Cummins Ltd. v. Dy. CIT. The petitioner's counsel highlighted the significance of these instructions and decisions in the context of the stay application. The court emphasized the need for the ACIT to reconsider the application in light of the observations made in the Soul case.3. The petitioner argued that the assessment was high-pitched, being approximately 17 times the returned income. Considering this assertion, the court set aside the impugned order and directed the matter to be reconsidered by the ACIT, Range-3, New Delhi. The court instructed the ACIT to take into account the decision in the Soul case while reassessing the petitioner's stay application.In conclusion, the High Court disposed of the writ petition and all pending applications, instructing a fresh consideration of the stay application by the ACIT in accordance with the court's observations and relevant legal precedents.