TaxTMI 
TaxTMI 
2008 (8) TMI 502
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....t of the assessee under section 222 of the said Act and the said bank has been directed to make the payment in pursuance of the said notice in view of the fact that the assessee holds the bank account in the said bank and the assessee/petitioner is allegedly in default of the amount mentioned in the said notice, i.e. Rs. 3,57,74,685. A similar notice of the same date has also been issued to the manager, Syndicate Bank, Nehru Place, New Delhi where the petitioner also holds an account. 2. The effect of these notices is that the entire banking operations of the petitioner have come to a stand-still. The notices have been issued because there is a demand outstanding against the petitioner. On November 2, 2004, a search was conducted in the ....
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.... Rs. 3.28 lakhs was adjusted by the Department out of a refund due to one of the partners in the petitioner firm. Since the balance amount had not been recovered, a notice was issued on August 31, 2007, for recovery of the same. On September 17, 2007, a further sum of approximately Rs. 51.05 lakhs was recovered by the Department by encashing the bank guarantee which had been given by the petitioner in favour of the Department. The total recovery, therefore, till date comes to Rs. 73,56,661. 5. Several demand notices were issued by the Department. The petitioner filed another stay application before the Assessing Officer on January 22, 2008, which was rejected on the very next day, i.e., January 23, 2008. On the same date, the petitioner ....
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....e points that came up for consideration in the eighth meeting of the Informal Consultative Committee was that the income assessments were arbitrarily pitched at high figures and that the collection of disputed demands as a result thereof was also not stayed in spite of the specific provision in the matter in section 220(6) of the said Act. The observations of the then Deputy Prime Minister were noted. The observations were to the effect that where the income determined on assessment was substantially higher than the returned income, say, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision on the appeals, provided there were no lapses on the part of the assessee. The Central Boar....
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....the said instruction reads as under: "A. Responsibility (i) It shall be the responsibility of the Assessing Officers and the TRO to collect every demand that has been raised, except the following: (a) Demand which has not fallen due; (b) Demand which has been stayed by a court or Income-tax Appellate Tribunal or Settlement Commission; (c) Demand for which a proper proposal for write off has been submitted; (d) Demand stayed in accordance with paragraphs B and C below: (ii) Where demand in respect of which a recovery certificate has been issued or a statement has been drawn, the primary responsibility for the collection of tax shall rest with the TRO. (iii) It would be t....
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....idelines for staying demand: (i) A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be a sufficient reason to stay the recovery of demand. A few illustrative situations where stay could be granted are:" (emphasis supplied) 8. Relying upon the said Instruction No. 1914 of 1993, Mr. Jolly submitted that all previous instructions stood superseded which included the super- cession of the said Instructions No. 96. He further submitted that paragraph No. 2 (C), which deals with guidelines for staying demand, specifically requires that a demand be stayed only if there are valid reasons for doing so and that a mere filing of an appeal against the ass....