2013 (5) TMI 667 - HC - Income Tax

Court reduces monthly tax installment to Rs. 15 crores due to financial hardship, sets 3-month appeal resolution.

The court modified the Commissioner of Income Tax's order, directing the petitioner to pay installments of Rs. 15 crores monthly instead of Rs. 80 crores, ... Stay application - plea of genuine hardship - Commissioner directed the assessee to pay the demand by way of installments of Rs. 80 crores each month, the first being due on 20.05.2013 as initially, the installments are to be for Rs. 15 crores each month - Held that:- As petitioner is under no position (financially) to make the payments as per the directions of the Commissioner by virtue of the impugned order and that the petitioner has an excellent case Commissioner ought to have stuck to the same methodology of payment as indicated in the earlier order dated 11.02.2013 where only directed the payment of the undisputed amount of Rs. 369 crores by requiring payment in two installments of Rs. 15 crores each so that the amount of Rs. 30 crores is collected by the end of financial year 2012-2013. Since the Commissioner had initially only directed payment of installments of Rs. 15 crores each month, the same should have been continued even by virtue of the subsequent order, particularly, as at the stage of passing the subsequent order, the petitioner had clarified that the entire amount was disputed. That being so, order of the Commissioner dated 08.05.2013 modified to the extent that instead of paying installments of Rs. 80 crores each month, the petitioner shall pay installments of Rs. 15 crores each month. The first installment shall be due on 31.05.2013 followed by payments each month to the extent of Rs. 45 crores. Also CIT (Appeals) directed to dispose of the appeal positively within three months, that is, by 31.08.2013. Issues:Challenge to the order passed by the Commissioner of Income Tax granting stay against the demand raised pursuant to the assessment order. Dispute over the amount of disputed and undisputed demand. Delay in the appeal process due to non-furnishing of comments by the Assessing Officer. Review of the stay arrangement by the Commissioner. Financial hardship faced by the petitioner in making payments as per the directions of the Commissioner.Analysis:The writ petition challenged the order passed by the Commissioner of Income Tax granting stay against the demand raised pursuant to the assessment order. The Commissioner had initially directed payment of the undisputed amount of Rs. 369 crores in two installments, but later, after the entire amount was disputed, directed the petitioner to pay the demand by way of installments of Rs. 80 crores each month. The petitioner argued financial inability to make such payments. The court modified the order, directing the petitioner to pay installments of Rs. 15 crores each month instead. The Commissioner of Income Tax (Appeals) was directed to dispose of the appeal positively within three months.The dispute over the amount of disputed and undisputed demand arose during the proceedings. The Commissioner, in the initial order, had stayed the recovery of the disputed amount of Rs. 665 crores till a specified date and directed the petitioner to pay Rs. 30 crores more by a certain date. The petitioner raised concerns over delays in the appeal process due to the non-furnishing of comments by the Assessing Officer. The court directed the Commissioner to review the stay arrangement within two weeks and expedite the appeal process.The Commissioner reviewed the matter and passed an order directing the petitioner to pay installments of Rs. 80 crores each month. The court, considering the financial hardship faced by the petitioner, modified the order to require payments of Rs. 15 crores each month. The Commissioner of Income Tax (Appeals) was instructed to dispose of the appeal within three months.In conclusion, the court addressed the issues related to the stay order against the demand raised by the Commissioner of Income Tax, clarified the disputed and undisputed amounts, resolved delays in the appeal process, and provided directions to alleviate the financial burden on the petitioner while ensuring the timely disposal of the appeal.