2016 (10) TMI 1254 - HC - Income Tax

Court Denies Full Stay on Tax Demand, Stresses Individual Assessment

The court declined to grant a complete stay on the outstanding tax demand, emphasizing the need to assess each case individually. It acknowledged the ... Stay of demand - condition to deposit 15% of the outstanding demand, for stay of remaining demand - attachment of all movable and immovable properties - HELD THAT:- Pursuant to search operations, assessments were carried out, which has resulted into substantial tax demands. Merely because the petitioner has filed appeals against such order of assessment by itself, would not permit us to grant blanket stay. Whether such demand pending appeal should be stayed, must be dependent upon facts of each case. The second contention of the petitioner however warrants consideration. If the properties are under attachment, naturally it would be difficult for the petitioner to raise funds for payment of substantial taxes. If on the other hand, the extension of attachment made under order dated 21.01.2016 has expired with efflux of time, the grievance of the petitioner would be substantially reduced. In such a situation, except for granting additional time for depositing the tax, no further relief would be necessary. Issues:Challenge to order imposing condition on depositing outstanding demand, request for complete stay pending appeals, impact of attachment on petitioner's ability to pay taxes.Analysis:1. The petitioner challenged an order by the Principal Commissioner of Income Tax imposing a condition to deposit 15% of the outstanding demand for the remaining demand to stand stayed. The petitioner argued that search assessments did not yield material for additions, and appeals were filed against the assessment orders. The petitioner sought complete protection, citing attachment of properties by the department as hindering liquidity.2. The court acknowledged the substantial tax demands resulting from the assessments post search operations. It noted that filing appeals alone does not warrant a blanket stay on the demand pending appeal. The court emphasized that granting stay should depend on the specific facts of each case, rather than a general rule.3. The petitioner's inability to raise funds due to the attachment of properties was considered a valid concern. The court highlighted that if the attachment period had expired, the petitioner's grievance would be reduced. In such a scenario, the court suggested granting additional time for tax payment instead of further relief.4. The court scheduled a returnable notice for further proceedings, indicating a need for a detailed examination of the issues raised by the petitioner. The judgment reflects a balanced approach considering the petitioner's challenges in meeting the tax demands due to the attachment of properties and the ongoing appeal process.