2015 (10) TMI 1619 - AT - Income Tax

Stay petition - 60% of demand u/s 201(1)/201(1A) for obtaining a stay of demand - Held that - Considering the fact that the issue on merits is yet to be decided by the CIT(A) and being of the view that the findings arrived at in para 5 have not taken into consideration the relevant criteria for deciding the issue namely the existence of prima facie arguable case in favour of assessee or not; irreparable loss if any and the financial position of the assessee etc. as no reference to these settled legal parameters is found mentioned in the order. It also seen that the merits of the order of the Assessing Officer till date have not been tested by any Appellate Authority. Thus, in these peculiar facts and circumstances, we direct the Revenue authorities from refraining to take any co-ercive action against the assessee till the passing of the order of the CIT(A) on merits. In view of the same, the Ld. CIT(A) is directed to pass a speaking order in the appeals on merit after giving the assessee a reasonable opportunity of being heard. The Ld. Sr. DR on the above view being expressed by the Bench insisted that a direction to the assessee be included mandating that the assessee should cooperate in ensuring that the hearing takes place. In the fact of the insistence of the Ld. Sr. Dr, Ld. AR, Mr. Piyush Kaushik gave an oral undertaking on behalf of his client by stating that the assessee shall fully participate in the proceedings. - Decided in favour of assessee for statistical purposes.

Issues:
1. Stay of demand under section 201(1)/201(1A) directed by CIT(A).
2. Consideration of financial hardship and prima facie case by CIT(A).
3. Direction for payment of remaining demand by the appellant.
4. Coercive action by Revenue authorities against the assessee.
5. Direction to CIT(A) to pass a speaking order on merits.
6. Timeframe for passing a speaking order by CIT(A).

Issue 1 - Stay of Demand under Section 201(1)/201(1A):
The appellant challenged the CIT(A)'s order directing the deposit of 60% of the demand under section 201(1)/201(1A) for obtaining a stay of demand. The CIT(A) considered the interest component as a necessary charge and granted a stay of 40% of the total demand until a specified date or disposal of the appeals, whichever is earlier. The remaining balance was to be paid in installments. The Tribunal noted that the interest component cannot be granted a stay and upheld the CIT(A)'s decision regarding the stay of 40% of the demand.

Issue 2 - Financial Hardship and Prima Facie Case Consideration:
The appellant contended that the CIT(A) erred in not appreciating the strong prima facie case, balance of convenience, and financial hardship. The Tribunal observed that the CIT(A) did not consider relevant criteria for deciding the issue, such as the existence of a prima facie arguable case, irreparable loss, and the financial position of the assessee. The Tribunal directed the Revenue authorities not to take coercive action against the assessee until the CIT(A) passes a speaking order on merits.

Issue 3 - Payment of Remaining Demand:
The CIT(A) directed the appellant to pay the remaining balance of the demand in installments. The Tribunal upheld this direction, emphasizing the importance of the appellant complying with the payment schedule to avoid being deemed an assessee in default.

Issue 4 - Coercive Action by Revenue Authorities:
The Tribunal directed the Revenue authorities to refrain from taking coercive action against the assessee until the CIT(A) passes an order on merits. The appellant undertook to cooperate in the proceedings, and the Tribunal set an outer limit of three months for the Revenue to pass a speaking order after hearing the assessee.

Issue 5 - Direction to CIT(A) to Pass a Speaking Order on Merits:
The Tribunal directed the CIT(A) to pass a speaking order on merits after giving the assessee a reasonable opportunity to be heard. The Tribunal emphasized the importance of considering settled legal parameters and testing the merits of the Assessing Officer's order.

Issue 6 - Timeframe for Passing a Speaking Order by CIT(A):
The Tribunal set an outer limit of three months for the Revenue to pass a speaking order after hearing the assessee. This timeframe was considered reasonable for the CIT(A) to make a decision on the merits of the case.

In conclusion, the Tribunal allowed the appeals filed by the assessee for statistical purposes, setting aside the impugned order and providing detailed directions for further proceedings in the case.

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