2013 (12) TMI 367 - HC - Income Tax

Stay of recovery - Held that - The stay application has not yet been disposed of by the Commissioner of Income Tax (Appeals) - More than two months have gone by now - Object of filing of the stay application is to get instant relief - If the department authority has not taken care to disposed of the stay application, this Court is left with no option but to grant an interim protection to the petitioner, till the appeal is finally adjudicated upon - An aggrieved person should not be left remedyless. Non consideration of stay application and pressing the demand is arbitrary exercise of power - The stay application may be heard and disposed of preferably within a period of four weeks and till the disposal of the stay application, the recovery shall be kept in abeyance - Decided in favour of petitioner.

Issues: Petitioner sought a Writ of Certiorari to quash an order by the Income Tax Officer regarding additions made to the income tax return for the assessment year 2009-2010. The petitioner filed an appeal and a stay application, both pending consideration. The respondent dismissed the stay application, leading to the present writ petition.

Analysis:
The petitioner approached the High Court seeking a Writ of Certiorari to challenge the order passed by the Income Tax Officer, which made certain additions to the petitioner's income tax return for the assessment year 2009-2010. The petitioner had also filed an appeal before the Commissioner of Income Tax (Appeals) along with a stay application to halt the demand during the appeal process. The appeal and stay application were submitted on 21.1.2012 and are still pending before the Appellate Authority. Additionally, the petitioner filed an application before the Tax Recovery Officer to stay the recovery proceedings in response to the assessment order. The impugned order dismissed the stay application, citing low chances of success in the appeal and the petitioner's sufficient funds in hand. Consequently, the petitioner filed the present writ petition challenging the order.

During the proceedings, the Department argued against granting any interim relief, citing precedents that discourage granting stays in tax matters unless under exceptional circumstances. However, the Court found these precedents inapplicable to the present case as the stay application was still pending before the Commissioner of Income Tax (Appeals) since its filing in January 2012. The Court noted that the purpose of filing a stay application is to obtain immediate relief, and the delay in disposing of the application left the petitioner without a remedy. Therefore, the Court decided to grant interim protection to the petitioner until the appeal was finally decided, criticizing the arbitrary exercise of power in not considering the stay application and pressing for recovery.

In light of the pending stay application before the Commissioner of Income Tax (Appeals), the Court disposed of the writ petition by directing that the stay application be heard and decided within four weeks. Additionally, the recovery proceedings were ordered to be put on hold until the stay application was resolved. The Court further instructed the Appellate Authority to consider the feasibility of deciding the appeal itself on its merits within the specified period. Ultimately, the writ petition was disposed of with these observations, ensuring the petitioner's right to a fair consideration of the pending applications and appeal.

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