2001 (3) TMI 32 - HC - Income Tax

Summary

Issues involved:
The judgment addresses the perfunctory passing of orders by the Department for recovery before March 31, without proper reasons, specifically in the context of a stay petition filed by an assessee and subsequent rejection by the Assessing Officer and the administrative authority.

Assessment Order and Stay Petition:
The Assessing Officer passed an assessment order under section 143(3) for the assessment year 1998-99, issuing a notice of demand of Rs. 12.93 crores including interest under section 156. The assessee filed a stay petition requesting to stay the demand for filing an appeal, which was rejected by the Assessing Officer and subsequently by the administrative authority, citing non-agreement to make part payment as the reason for dismissal.

Lack of Reasons and Consequences:
Both the Assessing Officer and the administrative authority passed orders without providing reasons, leading to the issuance of a garnishee notice to the bank, affecting around 500 workers who were not paid their salaries. The judgment highlights the adverse consequences of passing orders without giving reasons and emphasizes the need for proper parameters to be followed in such cases.

Parameters for Stay Applications:
The judgment lays down parameters to be followed by authorities when considering stay applications pending appeal, including setting out the case of the assessee, evaluating financial difficulties, assessing the need for depositing amounts, and considering the time to prefer an appeal before resorting to coercive measures. Compliance with these parameters would obviate the necessity for further reasoned orders by administrative authorities.

Setting Aside Impugned Order:
The impugned order dismissing the stay petition was set aside, directing the Assessing Officer to dispose of the stay application in accordance with law. Consequently, the garnishee notice was also set aside, and the writ petition was allowed with no order as to costs, with expedited issuance of a certified copy for the parties to act upon.