TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 734
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....d findings, this Court is of the view that the petitioner has not been able to make out a prima facie case in its favour. To put it mildly, the petitioner has a "lot to answer" in the appeal. 9. The petitioner"s plea of financial stringency based on its balance-sheet also inspires no confidence as according to the Assessing Officer, the accounts have not been properly maintained. One of the instance given by the Assessing Officer in the assessment order is reproduced hereinbelow:- 7.1 ....In one case of Sh. Anup Chakraborty, who has received salary/business receipts of Rs.13,90,275/- from assessee categorically denied having provided any services to PPK News Click in lieu of receipts...... 7.2 When the same finding was show caused to assessee, vide reply dated 26.12.2022, it has been argued by Assessee that the expenses made to this party is only 2.57% of the total expenditure.........Besides, Assessee contended that this payment to Sh. Anup Chaudhary were made pursuant to a family arrangement between him and his brother Sh. Amit Chakraborty. Assessee has claimed that the actual services were rendered by Sh. Amit Chakraborty on the account of his brother Sh. Anup Chaudhary. ....
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....e transaction as a whole is questioned as a 'farce' , provisions of section 68 of the Act could not have been invoked with regard to the receipts shown in the nature of income. We find that the tax authorities have examined the whole transaction on that aspect only and at this stage, based on our discussion above, there is no reason to differ from the same. The provisions of Section 68 of the Act rests initial burden on the assessee to explain the genuineness of the transaction. It being a deeming income provision, the burden needs to be sufficiently discharged, at least on the preponderance of probability. Here before us there are concurrent findings of two quasi- judicial authorities against the assessee by raising valid concerns about the genuineness of the transaction. Before us also, the same set of arguments and explanations have been raised , which, we also find prima facie lacking the strength to stand on its own legs. Thus, we have no hesitation to hold that the assessee has no prima facie case to contend that as for the purpose of section 68 of the Act, it had prima facie discharged its burden or that provisions of section 68 of the Act have been patently wrongly ....
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....n stone. We bear in mind in this regard the following observations as rendered in National Association of Software and Services Companies (NASSCOM) v. Deputy Commissioner of Income Tax (Exemption) Circle 2(1), New Delhi [2024:DHC:2078-DB]:- "12. It must at the outset be noted that the two OMs" noticed above neither prescribe nor mandate 15% or 20% of the outstanding demand as the case may be, being deposited as a pre-condition for grant of stay. The OM dated 29 February 2016 specifically spoke of a discretion vesting in the AO to grant stay subject to a deposit at a rate higher or lower than 15% dependent upon the facts of a particular case. The subsequent OM merely amended the rate to be 20%. In fact, while the subsequent OM chose to describe the 20% deposit to be the "standard rate", the same would clearly not sustain in light of the discussion which ensues. 13. We note that while dealing with an identical question, we had in Avantha Realty Ltd. vs The Principal Commissioner of Income Tax Central Delhi & Anr. observed as under:- "2. We note that the impugned orders are principally based on the instructions of the Central Board of Direct Tax ["CBDT"] as encapsulated in the O....
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....of the view that the requirement of payment of twenty percent of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases. The said pre- condition of deposit of twenty percent of the demand can be relaxed in appropriate cases. Even the Office Memorandum dated 29 February, 2016 gives instances like where addition on the same issue has been deleted by the appellate authorities in earlier years or where the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee. xxxx xxxx xxxx 8. In the present case, the impugned order is non- reasoned. The three basic principles i.e. the prima facie case, balance of convenience and irreparable injury have not been considered while deciding the stay application." 16. More recently in Indian National Congress vs Deputy Commissioner of Income Tax Central - 19 & Ors. we had an occasion to examine the scope of the power conferred by Section 220(6) of the Act and which was explained in the following terms: "22. However, as we read the order impugned, the matter does not appear to have proceeded along those lines before the ITAT. The tone and tenor of sub....
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....me Court in Benara Valves Ltd. & Ors. Vs Commissioner of Central Excise & Anr. had elucidated the legal position in the following words: "6. Principles relating to grant of stay pending disposal of the matters before the forums concerned have been considered in several cases. It is to be noted that in such matters though discretion is available, the same has to be exercised judicially. 7. The applicable principles have been set out succinctly in Silliguri Municipality v. Amalendu Das and Samarias Trading Co. (P) Ltd. v. S. Samuel and CCE v. Dunlop India Ltd. 8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because t....
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....e assessee relating to undue hardship and also to stipulate condition as required to safeguard the interest of the Revenue." The aforesaid principles were reaffirmed by the Supreme Court in Monotosh Saha vs Special Director, Enforcement Directorate & Anr. 18. We find a lucid explanation of the legal position with respect to pre-deposit and the grant of stay in a decision rendered by a Division Bench of the Allahabad High Court in ITC Ltd v. Commissioner (Appeals), Customs & Central Excise where the Court had held as follows: "18. In Income-tax Officer v. M.K. Mohammad Kunhi, AIR 1969 SC 430, the Apex Court held that stay should be granted if a strong prima facie case has been made out and in the most deserving and appropriate cases where entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue, during the pendency of the appeal. 19. In B.P.L. Sanyo Utilities and Appliances Ltd. v. Union of India, 1999 (108) E.L.T. 621, the Karnataka High Court held that in the matter of grant of waiver of pre-deposit, each case has to be examined on its own merit and no hard and fast rule can be formulated. xxxx xxxx xxxx 21. ....
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.... fortified in view of that fact that every power is coupled with a duty to act reasonably and the Court/Tribunal/Authority has to proceed having strict adherence to the provisions of law. [Vide Julius v. Lord Bishop of Oxford, (1880) 5 Appeal Cases 214; Commissioner of Police, Bombay v. Gordhandas Bhanji,1951 SCC 1088 : AIR 1952 SC 16; K.S. Srinivasan v. Union of India, AIR 1958 SC 419; Yogeshwar Jaiswal v. State Transport Appellate Tribunal, (1985) 1 SCC 725 : AIR 1985 SC 516; Ambica Quarry Works etc. v. State of Gujarat, (1987) 1 SCC 213 : AIR 1987 SC 1073]. xxxx xxxx xxxx 26. In Bongaigaon Refinery & Petrochem Ltd. v. Collector of Central Excise (A), 1994 (69) E.L.T. 193 (Cal.), the Calcutta High Court, while examining a similar issue and placed reliance upon a large number of judgments and held that the phrase "undue hardship" would cover a case where the appellant has a strong prima facie case. The phrase also covers a situation where there is an arguable case in the appeal. If the Appellate Authority forms the opinion that appellant has a strong prima facie case, it should dispense with the pre-deposit condition altogether. However, where it is of the opinion that the ap....
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....till insist upon the deposit of duty and penalty levied would certainly cause undue hardship to the assessee. Absence of the financial hardship in such a case would be no ground to decline the dispensation of pre-deposit under the proviso to Section 35F. The power to dispense with such deposit is conferred under the authorities has to be exercised precisely in cases like this type and if it is not exercised under such circumstances then this Court will require it to be exercised. Such like cases where two views are not possible then the condition of pre-deposit before the appeal is heard on merits, can be dispensed with. In case two views are possible on interpretation, based on conflicting judgments of the Tribunal or different High Courts in the absence of the judgment of the jurisdictional High Court then the authorities may pass the order under proviso to Section 35F of the Act keeping in view the facts of the case in hand." xxxx xxxx xxxx 35. In view of the above, the aforesaid authorities make it clear that the Court should not grant interim relief/stay of the recovery merely by asking of a party. It has to maintain a balance between the rights of an individual and the St....