TaxTMI 
TaxTMI 
2019 (5) TMI 435
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....While this was so, the 2nd respondent issued a communication dated 05.02.2019 calling upon the petitioner to remit the outstanding disputed demands on or before 11.02.2019. In response thereto, the petitioner filed applications dated 11.02.2019 seeking interim stay of recovery. The applications have been disposed of by impugned order dated 28.02.2019, extracted in entirety below: 'Sub : Petition for stay of collection of disputed demand in the case of Shri.R.K.Venkataraman - ACPPV4708D - AYs 2016-17 & 2017-18 - disposal of - Reg. Ref : 1.Your letter dated NIL received on 11.02.2019. **** Please refer to the above. 2.On consideration of your stay petition dated NIL referred to above, it is informed that your stay petition is rejected and you are requested to pay 20% of the disputed demand in terms of the CBDT's Office Memorandum dated 31.07.2017 in F.No.404/72/93 - ITCC, since the appeals filed by you before the CIT(Appeal) are pending. On payment of 20% of the disputed demands of Rs. 3,79,21,487 for A.Y.2016-17 & Rs. 2,28,72,512 for A.Y.2017-18 respectively and on furnishing proof for payment of the same, balance demands will be considered for grant of stay subj....
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....termined 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 appeal provided there were no lapses on the part of the assessees." 3. The Board desire that the above observations may be brought to the notice of all the Income-tax Officers working under you and the powers of stay of recovery in such cases up to the stage of first appeal may be exercised by the Inspecting Assistant Commissioner/Commissioner of Income-tax.' 9. Thereafter, Instruction No.1914 was issued by the CBDT on 21.03.1996 and states as follows: 1. Recovery of outstanding tax demands [Instruction No. 1914 F. No. 404/72/93 ITCC dated 2-12-1993 from CBDT] The Board has felt the need for a comprehensive instruction on the subject of recovery of tax demand in order to streamline recovery procedures. This instruction is accordingly being issued in supersession of all earlier instructions on the subject and reiterates the existing Circulars on the subject. 2. The Board is of the view that, as a matter of principle, every demand should be recovered as soon as it becomes....
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....ew illustrative situations where stay could be granted are: It is clarified that in these situations also, stay may be granted only in respect of the amount attributable to such disputed points. Further where it is subsequently found that the assessee has not co-operated in the early disposal of appeal or where a subsequent pronouncement by a higher appellate authority or court alters the above situation, the stay order may be reviewed and modified. The above illustrations are, of course, not exhaustive. ii. In granting stay, the Assessing Officer may impose such conditions as he may think fit. Thus he may - a. require the assessee to offer suitable security to safeguard the interest of revenue; b. require the assessee to pay towards the disputed taxes a reasonable amount in lump sum or in instalments; c. require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled. d. reserve the right to review the order passed after expiry of a reasonable period, say up to 6 months, or if the assessee has not cooperated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate a....
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....ignificant portions of the disputed demand prior to grant of stay resulting in extreme hardship for tax payers. Thus, in order to streamline the grant of stay and standardize the procedure, modified guidelines were issued which are as follows: '....... (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer 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 discussed in pars (B) hereunder. (B) In a situation where, (a) 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 higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court /or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.) or, (b) 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 (e.....
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.... notice of all officers working in your jurisdiction for proper compliance.' 12. The Circulars and Instructions as extracted above are in the nature of guidelines issued to assist the assessing authorities in the matter of grant of stay and cannot substitute or override the basic tenets to be followed in the consideration and disposal of stay petitions. The existence of a prima facie case for which some illustrations have been provided in the Circulars themselves, the financial stringency faced by an assessee and the balance of convenience in the matter constitute the 'trinity', so to say, and are indispensable in consideration of a stay petition by the authority. The Board has, while stating generally that the assessee shall be called upon to remit 20% of the disputed demand, granted ample discretion to the authority to either increase or decrease the quantum demanded based on the three vital factors to be taken into consideration.' 7. In the light of observations in the case of Kannammal as extracted above and seeing as the impugned order in the present case is also bereft of reasoning, I am constrained to set aside the same. 8.The petitioner will appear before the ....