TaxTMI 
TaxTMI 
2017 (5) TMI 256
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....ing Officer under Section 143 [3] of the Income-tax Act, 1961 [hereinafter referred to as, "the Act"] determining the income at Rs. 1,97,76,530/- against the returned income at Rs. 4,64,554/-. That, pursuant to the scrutiny assessment under Section 143 [3] of the Act, a demand notice of Rs. 91,38,400/- was issued to the petitioner. 3.2 Feeling aggrieved and dissatisfied with the order of assessment passed by the Assessing Officer, the petitioner-assessee filed an appeal before the learned CIT [A]. That, the petitioner also approached the respondent no. 2-Assessing Officer with an application under Section 220 [6] of the Act to keep the demand in abeyance till the disposal of the first appeal. That, by an order dated 7th February 2017, the respondent no. 2- Assessing Officer rejected the application of the petitioner mainly on the ground that at the time of submitting the stay application, the petitioner-assessee has not deposited 15% of the demand as pre-deposit and consequently, rejected the said application. 3.3 That, though not required, the petitioner approached the respondent no.1 and submitted the stay application on 10th February 2017 requesting for stay of the demand till....
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....rincipal CIT/CIT, after considering all the relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting stay of the balance demand. 4.2 It is submitted that as per Clause 4 [B], even in a case where the Assessing Officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted, as the case falls within Clause [B](b), in that case also, the Assessing Officer is required to refer the matter to the administrative Principal CIT/CIT and thereafter the learned Principal CIT/CIT, after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. It is submitted that therefore, the Assessing Officer if is of the opinion that the case would fall under Clause 4 [A], in that case, he is required to pass an order granting stay of demand till disposal of first appeal on payment of 15% of the disputed demand. It is submitted that therefore, none consideration of the stay application submitted by the petitioner on the ground that while submitti....
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....the administrative Principal CIT/CIT. 5.2 It is submitted that therefore, when the petitionerassessee did not deposit any amount; more particularly, 15% of the disputed demand at the time of submitting stay application on or before his stay application is considered on merits and despite sufficient opportunity given to the assessee, the petitioner did not deposit 15% of the amount, the Assessing Officer is justified in passing the impugned order rejecting the application. 5.3 Making the above submissions, it is requested to dismiss the present petition. 6. Heard learned advocates appearing on behalf of respective parties at length. 7. At the outset, it is required to be noted that by the impugned order, the respondent no. 2 has rejected the stay application of the petitioner which was submitted to grant stay of demand till the disposal of first appeal. That, the stay application of the petitioner has been rejected by the Assessing Officer/respondent no. 2 herein solely on the ground that the assessee has not deposited 15% of the disputed demand either at the time of submitting the stay application or before his stay application is considered. Thus, according to the Assessing Of....
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.... 15% is warranted [e.g., in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc], the assessing officer shall refer the matter to the administrative Principal CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand." 8.1 Therefore, the interpretation by the Assessing Officer that at the time of submitting stay application and/or before stay application is taken up for consideration on merits, the assessee is required to deposit 15% of the disputed demand as pre-deposit is absolutely based on misinterpretation and/or misreading of the modified Instructions dated 29th February 2016. What Clause-4 provides is that the Assessing Officer may/shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category mentioned in para 4 [B] of the modified instructions dated 29th February 2016. Under the circumstances, the impugned decision of the respond....
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.... the Assessing Officer is of the opinion that the assessee is required to deposit either above 15% or less than 15% of the disputed demand, in that case, the Assessing Officer is required to refer the matter to the Principal CIT/CIT and thereafter, the Principal CIT/CIT is required to take appropriate decision, after considering all the relevant facts and determine the lump sum payment to be made by the assessee for granting stay of the balance demand. 8.3 In a case where the Assessing Officer grants stay of demand on payment of 15% of the disputed demand and the assessee is still aggrieved, in that case, a further right is conferred upon the assessee to approach the jurisdictional administrative Principal CIT/CIT for review of the decision of the Assessing Officer. 8.4 Under the circumstances, for the reasons stated above, the impugned decision of the respondent no.2- Assessing Officer rejecting the stay application cannot be sustained and the same deserves to be quashed and set-aside. So far as the decision of the respondent no. 1 is concerned, it appears that after the decision rendered by the respondent no. 2, the assessee filed stay application before the respondent no. 1 an....