Court directs partial payment of tax demand, emphasizes commitment to Revenue, allows installment payment

The High Court of Bombay disposed of the petition challenging the Deputy Commissioner of Income Tax's order, partially rejecting the application for stay of demand under Section 220(6) of the Income Tax Act, 1961. The petitioner was directed to deposit 20% of the demand amounting to Rs. 5,80,29,696, with specific payment deadlines. Despite initial non-compliance, the Court accepted the petitioner's commitment to pay in installments and directed the respondents not to take coercive action until specified dates. The Court emphasized the importance of honoring commitments to the Revenue and adherence to payment schedules. No costs were awarded in the case.

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Issues:
Challenge to order of Deputy Commissioner of Income Tax partially rejecting application for stay of demand under Section 220(6) of the Income Tax Act, 1961.

Analysis:
The High Court of Bombay heard a petition challenging an order by the Deputy Commissioner of Income Tax dated 19th February, 2018. The order partially rejected the petitioner's application for stay of a demand amounting to Rs. 5,80,29,696 under Section 220(6) of the Income Tax Act, 1961. The order required the petitioner to deposit 20% of the demand, which would result in a stay of the balance amount of penalty imposed under Section 271(1)(c) of the Act for Assessment Year 2014-15. The petitioner was directed to deposit Rs. 1,16,05,939, representing 20% of the total demand.

The petitioner, through its Managing Director, had given an undertaking to the Principal Commissioner of Income Tax to make the required payment by a specific date. However, the petitioner failed to honor this commitment. Subsequently, the petitioner sought an extension of time to fulfill the undertaking. An affidavit by the Chief Administrative Officer was submitted, stating that a partial payment of Rs. 10 lakhs had already been made out of the required amount. The affidavit further committed to paying Rs. 25 lakhs by a specified date and the remaining balance by a later date. The Court accepted the statements made in the affidavit and directed the respondents not to take coercive action for recovery until a certain date. The Court made it clear that no further extension would be granted beyond the specified dates for payment.

Consequently, the petition was disposed of based on the terms mentioned above, with no order as to costs. The Court's decision emphasized the importance of honoring commitments to the Revenue and the consequences of failing to comply with agreed-upon payment schedules.

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