Court Orders Payment of 15% Disputed Demand to Avoid Recovery

The court disposed of the writ petitions by directing the petitioners to pay at least 15% of the disputed demand within three months to avoid recovery proceedings. The judgment emphasized compliance with TDS requirements, including the production of necessary forms for verification, to prevent default and subsequent recovery actions. The court clarified that a blanket stay of demand is not automatic and must be supported by specific circumstances, such as a favorable decision from the Supreme Court or jurisdictional High Court.

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Issues:
1. Allegations of Tax Deduction at Source (TDS) non-compliance for multiple assessment years.
2. Interpretation of Office Memorandum regarding stay of demand in income tax cases.
3. Applicability of a decision of the Allahabad High Court on granting stay of demand.
4. Assessment of tax deductible and production of Form Nos.15G/15H.

Analysis:
1. The petitioners challenged interlocutory orders regarding TDS non-compliance for the assessment years 2013-14 to 2016-17. Allegations included failure to make TDS for interest payments and not producing Form Nos.15G/15H. The Assessing Officer demanded tax under Sections 201(1) and 201(1)(a) of the Income Tax Act, 1961. Petitioners later produced the required forms for all years.

2. The revenue relied on an Office Memorandum allowing stay of demand on payment of 15% of disputed amount until the first appeal's disposal. However, a blanket stay of demand is mandated under certain circumstances, such as a favorable decision from the Supreme Court or jurisdictional High Court. This raised a question of interpretation regarding the applicability of the memorandum.

3. The petitioners cited a decision of the Allahabad High Court in a similar case, arguing for a stay of demand based on that judgment. The Appellate Authority acknowledged the judgment but emphasized the requirement in the Circular for a decision from the Supreme Court or jurisdictional High Court. Consequently, the stay could not be demanded as a matter of right solely based on the Allahabad High Court decision.

4. In a specific case where a substantial amount was assessed as tax deductible, the petitioner claimed to have submitted Form Nos.15G/15H amounting to the total demand. However, the documents were not produced before the Assessing Officer for verification, resulting in default. The court directed the petitioner to pay at least 15% of the disputed demand within three months, failing which recovery proceedings would continue. Similar orders were issued for all related writ petitions with comparable facts and figures.

The judgment disposed of the writ petitions with directions for payment and highlighted the importance of complying with TDS requirements and producing necessary forms for verification to avoid default and recovery proceedings.

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