2020 (9) TMI 202 - HC - Income Tax

Enforcement of Payment Order Upheld; Discretion Emphasized

The High Court upheld the learned Single Judge's order directing payment of 20% of the demand within a month, emphasizing the exercise of discretion. The ... Stay of demand - Direction to pay 20% of the demand - appellant submits that in similar circumstances a Division Bench of this Court issued Annexure A judgment permitting a Co-operative Bank to pay 1% of the demand, for staying the recovery while the first appeal was pending - in second appeal, by Ext.P16 the Tribunal had directed ascertainment of the business income of the assessee and allow deduction under Section 80P - HELD THAT:- Issue dealt with by the statutory authority was not with respect to the details of depositors, but with respect to the transferring of provisions and reserves to the P&L account and claiming deduction under Section 80P. These are all adjustments made in the account which were found to be not proper by the Assessing Officer, in addition to which the relief under Section 80P was also declined. Tribunal had merely directed the deduction to be granted under Section 80P after ascertaining the business income. In such circumstances, we do not see any similarity between the issue imugned in the writ petition and and that raised in Annexure A. As left with the order of the learned Single Judge which directed payment of 20% of the demand within one month which is an exercise of discretion, we would not interfere in appeal unless there is shown arbitrariness or illegality. The appellant is granted two months' time from today, if he pays 10% of the amounts by 30.09.2020 and another 10% by 30.11.2020. Issues:Challenge to interim order directing payment of 20% of demand made in specific documents; Comparison with a previous judgment allowing a Co-operative Bank to pay 1% of the demand; Statutory path followed unsuccessfully leading to orders giving effect to appellate order; Dispute regarding provisions and reserves transfer, claiming deduction under Section 80P; Exercise of discretion by the learned Single Judge in directing payment.Analysis:The appellant contested an interim order mandating payment of 20% of the demand outlined in certain documents. Reference was made to a previous judgment where a Co-operative Bank was permitted to pay 1% of the demand during an appeal process. The respondent argued against the similarity between the cases, emphasizing the distinct circumstances in each. In the present case, the appellant had traversed the statutory path without success. The Tribunal's order directed ascertainment of business income and deduction under Section 80B, with subsequent orders at issue in the writ petition. These orders pertained to adjustments in accounts related to provisions and reserves transfer, along with the denial of relief under Section 80P. The Tribunal had instructed the deduction under Section 80P post business income assessment, differing significantly from the scenario in the referenced judgment.The learned Single Judge's order, requiring payment of 20% of the demand within a month, was deemed an exercise of discretion. The High Court declined interference unless arbitrariness or illegality was demonstrated. The appellant was granted an extension, allowing payment of 10% by a specified date and another 10% by a later deadline. The Writ Appeal was summarily rejected with the mentioned observations.