2019 (3) TMI 365 - HC - Income Tax

Court allows petitioner to approach Assessing Officer, pay 20% disputed demand, seek stay under Income Tax Act. Petition disposed.

The Court granted the petitioner liberty to approach the Assessing Officer by paying 20% of the disputed demand and seek a stay of the impugned demand ... Stay of demand - condition for grant of stay - recovery proceedings - paying 20% of the disputed demand of tax - HELD THAT:- In the instant case, the petitioner has already filed an Appeal against the demand dated 27.12.2018 before the second respondent on 27.01.2019, raising identical grounds as raised in the instant writ petition. As seen from the averments in the affidavit filed in support of the writ petition, it is the apprehension of the petitioner that the condition for grant of stay before the second respondent is onerous. Since the condition has now been relaxed as seen from the Official Memorandum dated 31.07.2017 read with paragraph (B) of the official memorandum dated 29.02.2016, issued by the Government of India, Ministry of Finance, CBDT whereby the petitioner can obtain an order of stay of the demand dated 27.12.2018, by Therefore, the apprehension of the petitioner that for obtaining the stay, conditions imposed will be onerous are no more applicable. The petitioner is granted liberty to approach the Assessing Officer as per the Office Memorandum dated 31.07.2017 read with paragraph (B) of the official memorandum dated 29.02.2016, issued by the Government of India, Ministry of Finance, Central Board of Direct Taxes (CBDT), by paying 20% of the disputed demand and seek stay of the impugned demand dated 27.12.2018 by filing an application under Section 220 (3) or 220 (6) of the Income Tax Act, as the case may be. Issues:Challenge to demand made by first respondent in notice dated 27.12.2018 under Income Tax Act for assessment year 2016-17. Apprehension regarding conditions for obtaining stay of demand before second respondent.Analysis:The petitioner challenged the demand made by the first respondent in a notice dated 27.12.2018, under Section 143(3) of the Income Tax Act, directing payment of a specified sum as income tax for the assessment year 2016-17. The petitioner appealed before the second respondent under section 246(A) of the Income Tax Act on 27.01.2019, citing that objections raised were not considered by the first respondent in the assessment order. The petitioner sought relief through a Writ Petition, claiming that the conditions for obtaining a stay of demand before the second respondent were onerous. The petitioner expressed concern over these conditions, which were considered to be alleviated by a subsequent Official Memorandum issued by the Government of India, revising the standard rate for payment to 20% of the disputed demand.The Court examined an Office Memorandum dated 31.07.2017, issued by the Ministry of Finance, Government of India, which modified the guidelines for recovery of outstanding demand under the Income Tax Act. The Memorandum stipulated that payment of 20% of the disputed demand would warrant a stay of demand until the disposal of the appeal, unless specific conditions were met as outlined in paragraph (B) of the Memorandum. The petitioner had already filed an appeal against the demand before the second respondent, echoing the grounds raised in the Writ Petition. The Court noted that the petitioner could now seek a stay by paying 20% of the disputed demand, as per the revised guidelines, thereby eliminating the perceived onerous conditions for obtaining relief.Consequently, the Court granted the petitioner liberty to approach the Assessing Officer by paying 20% of the disputed demand and seek a stay of the impugned demand dated 27.12.2018 by filing an application under Section 220 (3) or 220 (6) of the Income Tax Act. With this direction, the Writ Petition was disposed of, with no order as to costs, and connected miscellaneous petitions were closed.