TaxTMI 
TaxTMI 
2017 (4) TMI 664
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.... proviso to Section 220(1) of the Act, in as much as, it does not furnish any reasons why the precipitate discretion to shorten the normal period of demand was made. The learned counsel relies upon the judgment of this Court in Sony India Ltd. Vs. CIT 276 ITR 278 (Del.). 4. It is submitted that the assessee had to suffer penalty for AY 2011-12 on account of the Revenue's interpretation with respect to income derived from sale of securities. The learned counsel highlights that for previous years i.e. AY 1996-97, 2001-02, 2004-05, 2007-08 and a subsequent year i.e. 2013-14, such income has been treated as arisen from insurance business. It is further submitted that such investments were made on account of the mandate of the law as per Insurance Act, 1938. The learned counsel urges that the impugned order is not sustainable because the reasons to believe do not fulfil the two tests spelt out in Sony India Ltd. (supra) i.e. existence of reasons of valid income and that the belief should have direct nexus to the conclusion that granting the full period for payment will be detrimental to the Revenue. 5. The learned counsel for the Revenue, who appears on advance notice, had copies ....
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....he assessee would be deprived of seeking recourse to such remedy on the one hand, there on the other he would be exposed to liability of interest and penalty immediately on the expiry of the reduced period. Thus, an order of the Assessing Officer under proviso to Section 220 (1) vests the assessee with serious consequences. Once such are the serious consequences of the default in compliance to the direction for payment of tax in the reduced period, greater would be the obligation upon the Assessing Officer to act fairly and judiciously. There has to be definite cause or reason before the Assessing Officer capable of being understood by the person of common prudence that but for such an order there will be detriment to the Revenue. In other words, the recovery of the demand raised by the Revenue is likely to be defeated if the full prescribed period is granted to the Assessee. Invocation of such provisions in a routine or a mechanical manner would not be permissible. The language of the Section does not suggest that legislature intended to arm the Assessing Officer with powers carte blanche. Higher the power, greater is the obligation to act judiciously. Reason is the sole (sic) of ....
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....e of the suit where the Court is satisfied that the defendants with an intention to delay or to avoid any process of Court or obstruct or delay the decree that may be passed against the defendant, the defendant has absconded or left the limitations of the jurisdiction of the court, is about to do so or has disposed of or removed his property or any part thereof under the jurisdiction of the Court, the court could issue a warrant of arrest with a direction that such defendant be brought before the Court and be directed to furnish security subject to such term and conditions as the court may deem fit and proper. Under different rules of this Order 38, vast powers have been vested in the Court in relation to the defendant as well as the property in suit, or both. Attachment before judgment is one of the known concepts. In civil law, this jurisdiction is quite familiar and the procedure is known as saisie conservatorie whereby the assets of a debtor may be impounded before a judgment, and orders commonly known as Mareva Injunction often practiced in British Australian and even in Indian law under the provisions of the said order. Even if a power to pass an order or grant an injuncti....
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.... cogent and proper reasons' and should not be imaginary or without any record'. The reasons to believe of the Assessing Officer should be relatable to the record on the file. It is not expected of the Assessing Officer to record detailed reasons in the order but the formation of belief should be record-based reason that grant of full period would be detrimental to the revenue. 23. In the present case the reasons were factually not correct and secondly there was no material before the Assessing Officer which can lead a person of common prudence to believe that the demand would become unrecoverable or that it would otherwise be detrimental to the revenue. The provisions of Section 220 have an inbuilt mechanism to prevent the assessee from evading the tax demand. To avoid interest and penalty, the assessee should pay the demand within the stipulated period. 24. This would further cast an obligation upon the Assessing Officer to form his belief on valid grounds. The belief of the Assessing Officer should not be based on untenable apprehensions or assumptions. Record-based reasons leading to such a belief would help in really protecting the interest of the revenue and t....