TaxTMI 
TaxTMI 
2019 (7) TMI 92
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....o quash and set aside the impugned order dated 11.2.2019 and 10.5.2019 passed by the respondent no.2 as being illegal, invalid, null & void, unjust, unfair and violative of Arts.14 & 19 of the Constitution of India. (c) Your Lordships be pleased to direct the respondent no.1 to forthwith decide the Appeal pending before it without insisting for payment of 20% of demand amount. (d) Your Lordships may be pleased to stay the impugned order dated 26.3.2019 passed by the respondent no.1 and further be pleased to direct the respondent no.1 to decide the appeal filed by the petitioner forthwith without insisting for payment of 20% of the demand amount pending the admission, hearing and final disposal of this petition. (e) Your Lordships be pleased to grant such other and further relief/s, as are deemed fit, in the interest of justice." 2. The writ-applicant had electronically filed his return of income for the Assessment Year 2016-17 on 16th October 2016 declaring the total income of Rs. 9,09,240=00. The case was selected for limited scrutiny through the Computer Aided Scrutiny Selection (for short, 'the CASS') and a notice under Section 143(2) of the....
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....ality of the provisions of sub-section (1), the following income shall be chargeable to income- tax under the head" Income from other sources", namely:- (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 - 1. any immovable property, 1. without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property." In the instant case, the assessee has received the immovable property for Rs. 3,79,92,500/- and there is no liability on the assesee to payable the said consideration. The assessee has received the said property without consideration as clear from the facts mentioned above. Hence, the amount of Rs. 3,79,92,500/- is hereby added to the total income of the assessee under the head income from other sources as per the provisions of S.56(2) of the Act. Penalty proceedings u/s.271(1)(c) of the Act are initiated separately for concealing particulars of income. Subject to the above remarks and on the basis of details available on record, total income of the assessee is computed as u....
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....F.No. 404/72/93-ITCC dated 31.7.2017, you are requested to make payment of 20% of outstanding demand of Rs. 1,73,29,162/- i.e Rs. 34,65,832/-subject to following conditions. (a) you are requested to submit an undertaking that you will co-operate in the early disposal of appeal failing which the stay order will be cancelled. (b) This office reserves the right to review the order passed after expire of reasonable period (i.e. 6 months) or if you have not co-operated in the early disposal of appeal or where a subsequent pronouncement by a higher appellate authority or Court after the above situations. (c) This office reserves the right to adjust refunds arising, if any, against the demand, to the extent of t he amount required for granting stay and subject to the provisions of section 245. (d) In case of failure in making the payment within seven days (07) of receipt of this letter, then this office reserves right to vacate the stay and appropriate recovery measures as per I.T Act. Act, 1961 and I.T rules, 1962 shall be taken, which may kindly be noted." 6. The writ-applicant thereafter preferred an application praying for stay of demand before t....
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....thly installment of Rs. 1,00,000 each. 2. It is submitted that the assessee's financial position is very bad and he is not capable to liquidate the demand of Rs. 34,65,832 at one go. We submit that the business of assessee is passing through a very bad phase which has resulted into financial crisis and it is not possible for the assessee to discharge the demand of Rs. 34,65,832 at one go. Hence, it is requested to your kind office to grant the above installments towards payment of demand of Rs. 34,65,832/-" 8. The Income Tax Officer, Ward-3, Nadiad, vide communication dated 10th May 2019, informed the writapplicant as under : "As discussed with you, installment of Rs. 5,00,000/- instead of Rs. 1,00,000/- vide your above letter is granted till the demand of 20% Rs. 34,65,832/- which commence from May 2019 to November 2019 for Rs. 5,00,000/- each month. Please note that if you failed to do so stay of above demand will be rejected and further action for recovery of demand as per provisions of Income Tax Act, 1961 will be taken. Further, you are requested to pay first installment of Rs. 5,00,000/- today then bank account will be revoke. Please note the above." ....
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....ill recover the amount by coercive means. It is in these circumstances, this letter was addressed and we have carefully perused that letter. That records that the subject matter of tax is in dispute. The Assessment Order is challenged. The Appeal under Section 246-A of the Income Tax Act 1961 challenging the Assessment Order dated 30th December 2017, received on 1st August 2018 is pending. The request of the petitioner/assessee is that the demand be kept in abeyance till the disposal of this Appeal. 4. With marginal difference in the figures, the issue raised in the second petition No.2160 of 2018 is also identical. Both petitions are taken up together. It is not disputed before us that in terms of Chapter XX styled as Appeals and Revision, the order of the Assessment Officer is appealable under section 246 subsection (1). Once it is an appealable order and the Appeal has been filed, it is pending, then, the petitioner/appellant should have been given either an opportunity to seek a stay during the pendency of the appeal, which power is also conferred admittedly in the Commissioner or this Deputy Commissioner should have held the demand in abeyance as prayed by the petitio....
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....b the same in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. 13. Mr.Patel laid much emphasis on the following averments made in the affidavit-in-reply : "3. It is further submitted that the petitioner-assessee is engaged in the trading of Petrol, Diesel and oil through its firm called M/s. Kilraj Petroleum. In the present case, the petitioner-assessee had filed his Income Tax Return for the A.Y. 2016-17 declaring total income of Rs. 9,09,240/-. Thereafter, the case of the petitioner-assessee was selected for limited scrutiny though computer Aid scrutiny Selection (CASS). During the assessment proceedings under section 143(3) of the Income Tax Act (hereinafter referred to as "the Act), the assessing Officer noticed that the assessee had purchased agriculture land in District Bharuch for Rs. 3,97,92,500/-. After scrutinizing the said transaction of purchase of land by the petitioner-assessee in detail, the assessing officer int he assessment order had observed that the said transaction is a sham transaction done by the assessee in connivance with Shri Melabhai Vasava, the seller and Shri Narendrasinh Parmar. The assessing office....
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....her application to the assessing officer seeking complete stay of demand by his letter dated 3.5.2019. It is submitted that in view of the aforesaid orders of the assessing officer and PCIT with respect to stay of demand, another application for stay of demand made by the assessee to the assessing officer is not maintainable in law. The assessing officer has then, issued the orders under section 226(3) of the Act upon the bankers of the petitioner (Annexure M, pages 55 and 57) for payments towards the aforesaid outstanding demand against the assessee from his bank accounts. The petitioner assessee had then, made another application dated 10.5.2019 whereby the petitioner has agreed to pay 20% of the outstanding demand i.e Rs. 34,65,832/- of Rs. 5,00,000/- as first monthly installments and thereafter each installment of Rs. 1,00,000/-. The assessing officer by his letter dated 10.5.2019 had partially accepted the said proposal of he petitioner by directing him to pay all the monthly installment of Rs. 5,00,000/- each instead of Rs. 1,00,000/-. The petitioner-assessee had thereafter, paid first installment of Rs. 5,00,000/- each instead of Rs. 1,00,000/-. The petitioner-assessee had t....
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....that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in super-session of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof. The preamble of these instructions provide that in order to streamline the process of grant of stay of standardization of quantum of lump-sum payment to be made as a pre-condition for stay of demand of dispute before the Commissioner of Income Tax (Appeals), such modified guidelines were being issued. The relevant portion of these instructions read as under: "4. In order to streamline the process of grant of stay and standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition for stay of demand disputed before CIT(A), the following modified guidelines are being issued in partial modification of Instruction No.1914: (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposa....
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....s not co-operated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section 245." 15. This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly. 16. Ordinarily, the court would be slow in interfering with such discretionary exercise of powers by the authority concerned. However, in the present case, the total tax demand is quite high. The issues are at the first appeal stage. Even 20% of the disputed tax dues would run into few lakhs ....