2014 (11) TMI 799 - HC - Income Tax

Stay application Direction to pay the demand in installments by Tribunal Held that - The order of the Tribunal may not have been placed before the second respondent - it could be true that it was placed, but he did not take note of it - In either case, the order is vitiated either for non-application of mind or for not having the benefit of the order of the Appellate Tribunal the order is set aside and the matter is remanded back to the revenue for a fresh consideration of the stay application revenue shall take note of Instruction No.1914 dated 02.12.1993, issued by the Central Board of Direct Taxes Stay granted.

Summary

Issues:
Challenge to order rejecting application for stay after success before Income Tax Appellate Tribunal.

Analysis:
The petitioner challenged an order passed by the Commissioner of Income Tax -II rejecting an application for stay after succeeding before the Income Tax Appellate Tribunal. The petitioner contended that despite the Tribunal's decision, the Commissioner confirmed the direction to pay the demand in instalments. The key argument was that the Tribunal's order was not brought to the notice of the Commissioner, leading to the impugned order being vitiated either due to non-application of mind or lack of awareness of the Tribunal's decision. The Court acknowledged the possibility that the Tribunal's order might not have been presented to the Commissioner or that it was overlooked. Consequently, the Court held that the impugned order should be set aside and the matter remanded back to the Commissioner for a fresh consideration of the stay application.

Upon reviewing the case, the Court directed the Commissioner to reconsider the application for stay, emphasizing the importance of following Instruction No.1914 dated 02.12.1993 issued by the Central Board of Direct Taxes. Specifically, the Commissioner was instructed to consider Para 2-C(a) and (b) of the guidelines for staying demand. These guidelines highlight situations where a demand should be stayed, such as when issues have been decided in the assessee's favor by an appellate authority or court, or when there are conflicting decisions of one or more High Courts regarding the interpretation of law adopted by the Assessing Officer. The Court's decision to remand the matter back to the Commissioner for fresh consideration aimed to ensure that the Tribunal's decision was duly taken into account and that the application for stay was reviewed in accordance with the relevant guidelines.

In conclusion, the writ petition was allowed, the impugned order was set aside, and the case was remanded to the Commissioner for a fresh examination of the stay application. The Court's decision underscored the importance of considering relevant legal guidelines and ensuring that decisions are made with full awareness of all pertinent factors, including previous appellate rulings.