Tax Recovery Officer lacked authority to grant stay orders; Assessing Officer or First Appellate Authority to handle. The High Court held that the Tax Recovery Officer lacked the authority to grant a stay of assessment orders and directed the petitioner to pursue relief ...
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Tax Recovery Officer lacked authority to grant stay orders; Assessing Officer or First Appellate Authority to handle.
The High Court held that the Tax Recovery Officer lacked the authority to grant a stay of assessment orders and directed the petitioner to pursue relief from the Assessing Officer or the First Appellate Authority. The Court emphasized the need for individual assessment of cases rather than mechanical adherence to guidelines. The petitioner was instructed to submit additional grounds in the stay petitions before the Assessing Officer within a week, with a directive for prompt decision within three weeks of a personal hearing. Coercive action against the petitioner was prohibited during this period, and no costs were awarded.
Issues: Impugned communication by Tax Recovery Officer regarding stay of demand, jurisdiction of Tax Recovery Officer, guidelines for stay of demand at first appellate stage, attachment of properties under Income Tax Act, application of modified instructions of Central Board of Direct Taxes, discretion of Assessing Officer in granting stay, additional grounds in stay petitions.
Analysis: The petitioner challenged a communication from the Tax Recovery Officer regarding the stay of demand raised for assessment years 2009-2010 to 2015-16 until the disposal of first appeals before the Commissioner of Income Tax (Appeals) 18. The communication cited modified CBDT instruction No.1914, requiring the petitioner to pay 20% of the disputed demand and file a stay petition before the Assessing Officer. The Tax Recovery Officer clarified that he cannot consider the petitioner's request for stay, as he lacks the authority to grant such relief.
The High Court noted that the Tax Recovery Officer does not have the power to grant stay of assessment orders, and the appropriate recourse for the petitioner is to approach the Assessing Officer or the First Appellate Authority. The petitioner had submitted stay petitions before the Assessing Officer, which were still pending, and therefore, the petitioner should pursue these petitions rather than seeking similar relief from the Tax Recovery Officer.
The petitioner contended that properties had been attached under the Income Tax Act to secure the Revenue's interests during the appeal process. The petitioner argued that the modified instructions of the CBDT should not apply since the stay petitions were filed earlier. However, the Court refrained from making a determination on this issue, as it was pending before the Assessing Officer.
The Court highlighted the guidelines issued by the Central Board of Direct Taxes for granting stay of demand, emphasizing that the Assessing Officer must consider each case on its merits rather than mechanically following the guidelines. The petitioner sought to file additional grounds in the stay petitions before the Assessing Officer to provide more details and requested the Court's permission to do so.
In conclusion, the Court directed the petitioner to raise additional grounds in the stay petitions before the Assessing Officer within a week and instructed the Assessing Officer to conduct a personal hearing and decide on the stay petitions promptly, preferably within three weeks of the hearing. The respondents were barred from taking coercive action against the petitioner during this period, and no costs were awarded.
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