High Court modifies tax deposit, allows installments for petitioner during appeal

The High Court ruled in favor of the petitioner, requiring them to deposit 5% of the disputed tax of the current year in installments to avoid further recovery until the appeal is decided by the Appellate Commissioner. The Court considered the petitioner's financial hardship and modified the deposit condition imposed by revenue authorities, ensuring that no further recovery would occur under the new terms. The Court held that the initial order by the Principal Commissioner of Income Tax would not apply under these revised conditions.

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Issues:
Challenge to condition imposed by revenue authorities for staying disputed tax and interest demand pending appeal before Commissioner (Appeals).

Analysis:
The petitioner challenged the condition imposed by revenue authorities, requiring a deposit of 20% of the disputed tax and interest demand arising from the assessment order pending appeal before the Commissioner (Appeals). The assessment order for the present case is linked with assessments from the years 2009-10 to 2014-15, involving transfer pricing adjustments. The Tribunal previously heard the appeals but could not dispose of them. An interim formula was provided by the Tribunal, granting a stay of 90% of the balance demand with specific deposit conditions. The Tribunal suggested that the appeals are likely to proceed for final hearing on a set date. The petitioner argued that the outcome of the appeal before the Tribunal would impact the appeals before the Appellate Commissioner for the assessment year 2016-17, as the additions made by the Assessing Officer were due to the inability to carry forward past losses.

Financial Hardship and Deposit Requirements:
The petitioner, facing financial hardship, had already made deposits towards disputed tax demands for the years 2009-10 to 2014-15. The High Court considered the financial circumstances and required the petitioner to deposit 5% of the disputed tax of the current year in two equal installments by specific dates. Upon fulfilling this condition, there would be no further recovery of tax and interest until the appeal is disposed of by the Appellate Commissioner. The High Court disposed of the petition, stating that the impugned order by the Principal Commissioner of Income Tax would not survive under these conditions.

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