2024 (9) TMI 1870 - HC - Income Tax

Income tax demand stay application refused; installment facility reduced and appeal to be decided within three months

Application for stay of an income tax demand was refused while the installment facility was curtailed to 20 installments or until installments equal 20% ... Application for stay of demand notice rejected - high pitch assessment - reducing the installment facility payable to 20 installments till such installment reaches 20% of the total tax liability or till the disposal of the appeal pending consideration before the Appellate Authority i.e. the Commissioner of Income Tax (Appeals). HELD THAT:- As the total returned income and the said demand is 51 times higher than the said complete returned income and 180 times higher than the amount of tax paid by the assessee against which the Appellant has preferred a statutory appeal on 19.4.2023 before the Commissioner of Income Tax (Appeals) i.e., the Appellate Authority, which is pending consideration for more than 1 year and 5 months and is still undecided by the Appellate Authority. Furthermore, the Appellant has already deposited an amount and this Court on 23.4.2024 also has granted an interim order in favour of the Appellant qua the recovery. 8Since the statutory appeal is still pending consideration before the Appellate Authority for a period of 1 year and 5 months and the Appellant has also already deposited Rs. 41,55,000/- as well as the interim order dated 23.4.2024 passed by this Court is also operating for 5 months, in our considered opinion, it would be expedient to direct the Appellate Authority to consider and decide the appeal in accordance with law within a period of three months from the date of receipt of certified copy of this judgment. Issues: Whether, in view of a pending statutory appeal and partial deposits made by the assessee, the Appellate Authority should be directed to decide the appeal within a fixed short period and the interim order restraining recovery should continue until disposal of the appeal.Analysis: The appeal against the assessment under Section 147 of the Income-tax Act, 1961 is pending before the Commissioner of Income Tax (Appeals) for over one year and five months. The demand raised under Section 156 of the Income-tax Act, 1961 is significantly higher than the returned income and tax paid, and the assessee has made deposits towards the demand and is protected by an interim order. Balancing the prolonged pendency of the statutory appeal, the partial deposit already made, and the need for finality in revenue recovery, a direction for expeditious adjudication of the statutory appeal is warranted to avoid prejudice to the assessee while preserving the revenue's rights.Conclusion: The Appellate Authority is directed to consider and decide the statutory appeal in accordance with law within three months from receipt of certified copy of the judgment, and the interim order preserving status quo on recovery shall remain in operation until the appeal is decided.Ratio Decidendi: Where a statutory appeal against a high demand remains pending for an extended period and the assessee has made partial deposits with an interim order in place, the Appellate Authority may be directed to decide the appeal expeditiously and the interim stay on recovery may be continued until disposal to prevent undue prejudice to the assessee while safeguarding revenue interest.