TaxTMI 
TaxTMI 
2024 (4) TMI 198
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....al), Delhi -2 , disposing of stay applications filed by the petitioner for outstanding demands pertaining to Assessment Years [AYs] 2010-11 to 2020-21 being kept in abeyance during the pendency of its statutory appeals before the Commissioner of Income Tax (Appeals) [CIT(A)]. 4. The record would reflect that a search and seizure action under Section 132 of the Income Tax Act, 1961 [Act] was conducted upon the petitioner on 02 January 2020. Thereafter, notices under Section 153A of the Act for AYs' 2010-11 to 2019-20 came to be issued and on culmination of proceedings so drawn, assessment orders came to be framed on 30 September 2021 raising a cumulative demand of INR 1,85,62,19,390/- vide demand notices issued under Section 156 of the Act for AYs' 2010-11 to 2020-21. 5. Aggrieved by the aforesaid assessment orders, the petitioner filed appeals before the CIT(A) on 30 October 2021 and which are stated to be pending. Seeking interim protection against the enforcement of the outstanding demand for AYs' 2010-11 to 2019-20, the petitioner moved the second respondent by way of a stay application referable to Section 220(6) of the Act on 15 November 2021. The said application, howev....
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.... issued on 16.09.2023 requiring you to pay the outstanding demand and to produce the challan as proof of payment. Further, you were asked to provide stay of demand application filed before the PCIT (Central)-2, Delhi or Addl. CIT, Central Range-4, Delhi, if any. In response to the said notice, under referred letter has been filed by you. On perusal of the said letter, it is noticed that you have not provided any details with regard to payment of the said outstanding demand. Further, you have not provided any details regarding your pending stay of demand applications. Further, arguments have been made by you with regard to concluded assessment proceedings in your case. In this regard, it is to state that the assessment proceedings in your case were completed with due diligence and contention with the content of the assessment order or the observations made therein cannot be entertained at this juncture. As the matter is under appeal, as intimated by you, these grounds may be taken at the appellate forum by the assessee. Hence, based on the above facts, no further action is pending with this office as stay application filed by you has already been disposed ....
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....6) of the Act. Insofar as prima facie merits are concerned, Mr. Singh drew our attention to the fact that an addition of approximately INR 284 crores has been made on the basis of documents and pen drives tendered by one Mr. Tanmaya Saxena to the Enforcement Directorate [ED] and on the basis of the statement of Mr. Rajiv Saxena, neither of which was material gathered in the course of search. It was in the aforesaid context that Mr. Singh sought to draw sustenance from the decision of the Supreme Court in Abhisar Buildwell. 12. Learned senior counsel also drew our attention to the judgment passed by our Court in the matter of Sanjay Jain vs. Enforcement Directorate 2024 SCC Online Del 1656, where the Court had observed that the documents tendered by Mr. Rajeev Saxena were not even capable of being classified as evidence and therefore, the addition in the present case on the basis of his statement was untenable. Mr. Singh also referred to the fact that the assessment orders itself had created a demand nearly 98 times over the Returned Income. Despite all of the above, Mr. Singh submitted that the respondents have woefully failed to accord due consideration on the aforesaid aspects....
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....3. Insofar as the aforesaid Office Memorandum is concerned, suffice it to note that while considering its ambit the Supreme Court in Principal Commissioner of Income Tax and Others vs. LG Electronics India Private Limited had held as follows:- "1. Delay condoned. Leave Granted. 2. Having heard Shri Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving credence to the fact that he has argued before us that the administrative circular will not operate as a fetter on the Commissioner since it is a quasi-judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal. 3. The appeal is disposed of accordingly. Pending application, if any, shall stand disposed of." 14. As is manifest from the order passed by the Supreme Court in Principal Commissioner of Income Tax & Ors. vs LG Electronics India Pvt. Ltd., it had been emphasized that the administrative circular would not operate as a fetter upon the power otherwise conferred on a quasi-judicial authority and that it would be....
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....ove, it becomes pertinent to observe that the 20% deposit which is spoken of in the OM dated 31 July 2017 is not liable to be viewed as a condition etched in stone or one which is inviolable. The OM merely seeks to provide guidance to the authorities to bear in mind certain aspects while considering applications for stay of demand pending an appeals remedy being pursued. The OM is not liable to be read as conferring an indefeasible right upon the assessee to claim a stay of a tax liability by merely offering or consenting to deposit 20% of the outstanding liability. Ultimately, it is for the authorities to examine and consider what amount would be sufficient to securitise the interest of the Revenue and thus a just balance being struck. The quantum of the deposit that would be required to be made would ultimately depend upon the facts and circumstances of each case. ............ 23. The position which thus emerges is that while 20% is not liable to be viewed as an entrenched or inflexible rule, there could be circumstances where the respondents may be justified in seeking a deposit in excess of the above dependent upon the facts and circumstances that may obtain. This woul....
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....blic mischief, grave irreparable private injury or shake a citizen's faith in the impartiality of public administration, interim relief can be given. 9. It has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri Municipality and Dunlop India cases without analysing factual scenario involved in a particular case. xxxx xxxx xxxx 11. Two significant expressions used in the provisions are "undue hardship to such person" and "safeguard the interests of Revenue". Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka that under Indian conditions expression "undue hardship" is normally related to economic hardship. "....
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....ispensation of pre-deposit condition and held that the Appellate Authority must address to itself to the prima facie merits of the appellant's case and upon being satisfied of the same, determine the quantum of deposit taking into consideration the financial hardship and other such related factors. xxxx xxxx xxxx 23. In J.N. Chemicals Pvt. Ltd. v. CEGAT, 1991 (53) E.L.T. 543, the Calcutta High Court while considering the provisions of pre-deposit of duty and penalty, observed that where the authority concerned comes to the conclusion that the appellant has a good prima facie case so as to justify the dispensation of requirement of pre-deposit of the disputed amount on duty and penalty, the authority must exercise its discretion to dispense with such requirement particularly in a case where the appellant satisfies the authority concerned that its case is squarely covered by the decision of a competent Court binding on it. In such an eventuality, asking the appellant to deposit the duty demanded and penalty levied would undoubtedly cause undue hardship to the appellant. While deciding the said case, Calcutta High Court placed reliance upon the judgment of the Ho....
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....also cannot be jeopardised. 27. In Sri Krishna v. Union of India, 1998 (104) E.L.T. 305, Delhi High Court considered the issue of dispensation of pre-deposit condition and the concept of undue hardship while considering the provisions of Section 129E of the Customs Act, 1962 and Section 35 of the Act and held that the Court while considering the case of the appellant should examine as to whether the Appellate Authority or Tribunal have dealt with the plea raised by the appellant before it and have considered as to whether the appellant has a prima facie case on merit. In case the appellant has a strong prima facie case, as is most likely to exonerate him from liability and the Appellate Authority/Tribunal insists on the deposit of the amount, it would amount to undue hardship. 28. In Hoogly Mills Co. Ltd. v. Union of India, 1999 (108) E.L.T. 637, the Calcutta High Court again reiterated the view that if the appellant has a strong prima facie case, he is entitled of waiving the pre-deposit condition and in case the Appellate Authority insists to deposit the amount so assessed or penalty so levied, it will cause undue hardship to the assessee. While considering the ....
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....e considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. In case it is covered by the judgment of a Court/Tribunal binding upon the Appellate Authority, it should apply its mind as to whether in view of the said judgment, the appellant is likely to succeed on merit. If an appellant having strong prima facie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant running in a good financial condition. The arguments that appellant is in a position to deposit or if he succeeds in appeal, he will be entitled to get the refund, are not the considerations for deciding the application. The order of the Appellate Authority itself must show that it had applied its mind to the issue raised by the appellant and it has been considered in accordance with the law. The expression "undue hardship" has a wider connotation as it takes within its ambit the case where the assessee is asked to deposit the amount even if he is likely to exonerate from th....
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....even greater prejudice to the writ petitioner by requiring it to deposit 40% of the outstanding demand. The petitioner had moved the first respondent in terms of the provisions made in the OM dated 29 February 2016 and which reads thus: - "OFFICE MEMORANDUM [F.NO. 404/72/93-ITCC] SECTION 220 OF THE INCOME-TAX ACT, 1961 - COLLECTION AND RECOVERY OF TAX - WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT - AMENDMENT OF INSTRUCTION NO.1914, DATED 21-3-1996 TO PROVIDE FOR GUIDELINES FOR STAY OF DEMAND AT FIRST APPEAL STAGE OFFICE MEMORANDUM [F.NO.404/72/93-ITCC], DATED 29-2-2016 Instruction No. 1914 dated 21-3-1996 contains guidelines issued by the Board regarding procedure to be followed for recovery of outstanding demand, including procedure for grant of stay of demand. 2. In part 'C' of the Instruction, it has been prescribed that a demand will be stayed only if there are valid reasons for doing so and that mere filing of an appeal against the assessment order will not be a sufficient reason to stay the recovery of demand. It has been further prescribed that while granting stay, the field officers may require the assessee to offer....
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.... (D) The assessing officer shall dispose of a stay petition within 2 weeks of filing of the petition. If a reference has been made to Pr. CIT/CIT under para 4 (B) above or a review petition has been filed by the assessee under para 4 (C) above, the same shall also be disposed of by the Pr. CIT/CIT within 2 weeks of the assessing officer making such reference or the assessee filing such review, as the case may be. (E) In granting stay, the Assessing Officer may impose such conditions as he may think fit. He may, inter alia,- (i) require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled; (ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if 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 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. 5. These ins....