TaxTMI 
TaxTMI 
2022 (12) TMI 804
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....n 28th July, 2017 declaring a total income of Rs.68,33,07,135/- and exempt income of Rs.39,75,96,305/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 ("the Act') and a demand of Rs.175,52,26,440/- raised. Subsequently the case was selected for scrutiny assessment under CASS on the identified issue of "expenses incurred for earning exempt income". Notice under Section 142(1) of the Act alongwith questionnaire were issued and among others, the Petitioner was asked to provide details of exempt income and expenditure incurred to earn exempt income. The Petitioner submitted its response stating that it had earned income in the nature of interest on fixed deposits, which had been duly offered to tax. It was also stated....
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....ent dated 29th December, 2019 under Section 143(3) of the Act as also the notice of demand under Section 156 of the Act, and with a view to seek a stay on the recovery notice under Section 220 of the Act issued by Respondent No. 1, the Petitioner claims that a stay application was fled with Respondent No. 1 on 03rd March, 2020 and appeal also came to be preferred before the CIT(A) under Section 246A of the Act against the said order of assessment. 3. The Respondent No. 1 by virtue of order dated 24th June, 2020 granted a blanket stay on the demand for a period of six months up to 31st December, 2020, or the disposal of the appeal by the CIT(A), whichever was earlier. According to learned Counsel for the Petitioner, this was possible when....
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.... expiring on 31^st December, 2020. This was followed by another email on 04^th December, 2020. 6. On 06th December, 2020 the Petitioner claims that an application for extension of stay was fled with the A.O. Respondent No. 1 seeking extension of stay as the appeal had not been heard by the CIT(A), however, it appears that this application for extension of stay was rejected vide the order dated 18th December, 2020, not only this, Respondent No. 1, directed that an amount of 20% of the demand be paid in terms of Office Memorandum [F.No.404/72/93-ITCC] dated 29^th February, 2016 and amended Instruction dated 31st July, 2017, failing which the Petitioner was informed that coercive action would be considered for recovering the demand. 7. O....
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....dance with law by passing a speaking order, inasmuch as the Petitioner had in the meantime also filed an application for stay before the CIT(A). 9. It is pursuant to the order dated 31st December, 2020 that the CIT(A) has passed the order dated 30th November, 2022 under Section 220(6) of the Act, which is impugned in the present petition. The CIT(A) in the order impugned rejected the contention of the Petitioner in reference to CBDT Instruction No. 96 dated 21 August, 1969, which was pressed by the Petitioner to support and buttress the proposition that if the assessed income was substantially higher than the returned income, the collection of tax in dispute ought to be held in abeyance. 10. It was held that the circular would be appl....
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....ed by the A.O. on 24th June, 2020 and further that since there was no change in the circumstances between 24th June, 2020, as also the date when the A.O. rejected the application for extension of stay on 18th December, 2020, the rejection of the prayer of the Petitioner for extension of stay was illegal and unjustified. It was urged that CIT(A) ought to have appreciated the said fact and granted stay of the demand on that basis alone. The second point urged was that since the demand was high pitched, the same ought to have been stayed in terms of the circulars and instructions discussed hereinabove. Reliance was placed upon Valvoline Cummins Ltd. V/s. Dy. CIT [2008] 171 Taxman 241 (Delhi). and Soul V/s. Dy. CIT (2008) 173 Taxman 468 (Delhi)....
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....isage as under: "(iii) The decision in the matter of stay of demand should normally be taken by Assessing Officer/TRO and his immediate superior. A higher superior authority should interfere with the decision of the AO/TRO only in exceptional circumstances e.g. where the assessment order appears to be unreasonably high pitched or where genuine hardship is likely to be caused to the assessee. The higher authorities should discourage the assessee from fling review petitions before them as a matter of routine or in a frivolous manner to gain time for withholding payment of taxes. 15. It, therefore, transpires that the proviso contained in paragraph 2 of the Instruction No. 96 dated 21st August, 1969, which envisages that there shou....