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Deposit Rs 40 lakh within eight weeks; demand dated 7 April 2021 under s.156 stayed pending appeal under s.246 HC directed petitioner to deposit Rs. 40 lakhs with the assessing officer within eight weeks; upon such payment the demand dated 7 April 2021 under s.156 ...
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Deposit Rs 40 lakh within eight weeks; demand dated 7 April 2021 under s.156 stayed pending appeal under s.246
HC directed petitioner to deposit Rs. 40 lakhs with the assessing officer within eight weeks; upon such payment the demand dated 7 April 2021 under s.156 shall be stayed, to the extent challenged in the pending appeal under s.246, until disposal of that appeal, and the petitioner shall be treated as not in default for the disputed amount. The deposit will abide the result of the appeal. The order followed CBDT guidelines allowing exceptional grant of stay subject to specified payment.
Summary: 1. The petitioner, an educational research organization, challenged a demand notice u/s 143(2) of the Income Tax Act, 1961, and subsequent actions based on financial constraints due to various reasons including a nation-wide lockdown and CAA protests.
2. The petitioner filed an appeal against the order u/s 143(3) & subsequent demand notice u/s 156. Despite seeking a stay on the demand till appeal disposal, the petitioner was directed to pay 20% of the outstanding demand as per CBDT Instruction No. 1914, leading to financial burden/stress.
3. The petitioner argued that the assessing officer's decision to demand 20% of the disputed tax was not mandatory in all cases and requested the court to consider the financial stress faced by the petitioner. The respondents cited guidelines under Section 220(6) of the Act to justify the demand.
4. The court noted that the appeal was pending consideration and considered the guidelines issued by the Central Board of Direct Taxes. While acknowledging the usual requirement of 20% payment for stay of demand, the court highlighted exceptional circumstances mentioned in the guidelines.
5. In light of the circumstances and the petitioner's plea, the court directed the petitioner to make a payment of Rs. 40 lakhs within eight weeks to stay the demand till appeal disposal, treating the petitioner as not in default regarding the disputed amount. The payment outcome would align with the appeal result.
6. The writ petition was disposed of with the mentioned directions, and no costs were awarded. Parties were to receive a certified copy of the order promptly upon compliance.
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