2017 (1) TMI 1392 - HC - Income Tax

Stay of demand - pre-deposit - Held that - There appears no justification in taking a different view as taken by the Division Bench. Learned Additional Commissioner Income Tax while deciding the application for stay of demand under Section 220 (6) of Income Tax Act has directed the assessee to pay the entire demand in respect of additions in respect of land premium in five equal installments starting from the month of November 2016 and the payment has to be done by 15.03.2017. So far as other payment s relating to other issues are concerned the assessee has been directed to pay 15% of the said demand in five equal installments starting from the month of November 2016 and total 15% amount has to be paid upto 05.03.2017 Additional Commissioner Income Tax Range-3 has rightly exercised his discretion and passed the impugned order. The impugned order does not suffer from any illegality or perversity and the appeal has to be decided on merits therefore without commenting upon the subject matter of the appeal so far as the order dated 08.11.2016 is concerned no interference is warranted in the matter.

Summary

Issues:
1. Stay of demand under Section 220(6) of the Income Tax Act.
2. Applicability of CBDT circulars for waiver of predeposit.
3. Discretion of the Additional Commissioner, Income Tax, Range-3 in passing the impugned order.

Analysis:
1. Stay of demand under Section 220(6) of the Income Tax Act:
The case involved a writ petition filed by a company against the order disposing of applications for stay of demand under Section 220(6) of the Income Tax Act. The petitioner, a company registered under the Companies Act, had developed an industrial area and preferred an appeal against an assessment order for certain years. The Additional Commissioner directed the petitioner to pay the entire demand in installments, which the court found to be in line with the provisions of Section 220(6) of the Income Tax Act. The court held that the Additional Commissioner rightly exercised discretion in passing the order, and no interference was warranted.

2. Applicability of CBDT circulars for waiver of predeposit:
The petitioner relied on CBDT circulars to argue for the waiver of predeposit conditions due to the pending appeal. However, the court did not find merit in this argument and upheld the decision of the Additional Commissioner to require payment in installments. The court emphasized that the appeal should be decided on its merits and declined to interfere with the impugned order.

3. Discretion of the Additional Commissioner, Income Tax, Range-3 in passing the impugned order:
The court compared the present case with a previous judgment where a similar issue was addressed by a Division Bench. In the previous case, the petitioner was directed to deposit a specific amount, and the court found no justification to deviate from that decision. The court directed the Income Tax Appellate Tribunal to expedite the hearing of the stay application filed by the petitioner. The court emphasized the importance of timely payment to avoid coercive measures for recovery of the demand.

In conclusion, the court dismissed the admission and held that the impugned order passed by the Additional Commissioner, Income Tax, Range-3 was valid and in accordance with the law. The judgment provided clarity on the application of Section 220(6) of the Income Tax Act and the discretion of tax authorities in dealing with demands and appeals.