TaxTMI 
TaxTMI 
2024 (5) TMI 1023
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....mpugned order reads thus: "Sir/ Madam/ M/s, Subject: Online service of Orders - Letter REF: Recovery of Demand in the case of Mis Centre for Policy Research (PAN:AAATC0180H) for AY 2022-23 - reg. Kindly refer to your stay of demand application dated 18.04.2024 on the above mentioned case received in this office on 19.04.2024 requesting to stay the recovery proceedings till the disposal of First Appeal. It is hereby informed to you that the CBDT's Instruction No 1914 dated 21.03.1996 read with CBDT O.M. dated 29.02.2016 & OM No. 404n2/93-ITCC dated 31.07.2017 overrides all earlier instructions/Circulars in respect of recovery of outstanding tax demands. In view of the above instruction & memorandum, to get a stay against the demand, an assessee is required to deposit at least 20% of the outstanding disputed demand and file appeal before the CIT(A). I have gone through the contents of your reply and it is to inform you that I am unable to accede to your request of keeping the outstanding demand in abeyance. After consideration your submission, your request for stay of demand is rejected as you have not submitted proof for making the requisite payment Merely filin....
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....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 Office Memorandum dated 31 July 2017 and which had while dealing with the manner in which the power under Section 220(6) of the Act is liable to be exercised had held that assessees' may be accorded interim protection subject to deposit of 20% of the total outstanding demand failing which they would be treated as an "assessee in default". 3. Insofar as the aforesaid Office Memorandum is concerned, suffice it to ....
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.... 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 submissions clearly appear to have been concentrated upon the merits of the assessment order. Although the issue of payment of 20% of the outstanding demand appears to have been raised, the same came to be summarily rejected by the ITAT in cryptic terms. Notwithstanding the above, 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 ....
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....licable 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 this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public 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 ....
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....sion 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. In Mehsana District Cooperative Milk P.U. Ltd. v. Union of India, 2003 (154) E.L.T. 347 (S.C.), the Hon'ble Supreme Court considered the case of dispensation 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 conside....
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.... 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 appellant has no arguable case, the Appellate Authority must safeguard the interest of the Revenue, as the same 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....
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....nd 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 State so far as the recovery of sovereign dues is concerned. While 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 whet....