2015 (10) TMI 2185 - HC - Income Tax

Stay of disputed outstanding demand seeked - Held that - Since the regular appeal is not yet disposed of and since by the order passed under Section 220(6), the Assessing Officer was likely to review the conditional order, the appellant apprehends that some more levy may be imposed. The above grievance of the appellant could easily be redressed. As against the original assessment completed on 28.5.2014, the appellant did not go on appeal. They have accepted all the disallowances. Now, what is pending in appeal is only the question of penalty. The total penalty levied was ₹ 10 Crores. Out of the said amount, a sum of ₹ 5 Crores has already been deposited. Therefore, this is a fit case where the appellant is entitled to have stay till the disposal of the appeal. Thus grant the benefit of stay to the appellant till the disposal of the appeal.

Summary

Issues:
1. Mandamus to direct the Department of Income Tax to stay disputed demand of Rs. 10 crores.
2. Challenge of order under Section 220(6) without filing statutory appeal.
3. Apprehension of further levy due to pending appeal on penalty.
4. Grievance regarding adverse remarks made by the learned Judge.

Analysis:
1. The appellant sought a Mandamus to direct the Department of Income Tax to stay the disputed outstanding demand of Rs. 10 crores following an order under Section 220(6) of the Income Tax Act, 1961. The appellant had accepted certain disallowances made during assessment without filing an appeal, leading to penalty proceedings and the demand in question.

2. The appellant, without challenging the order under Section 220(6) by filing a statutory appeal, filed a writ petition seeking a Mandamus to stay the demand. The Judge noted the failure to challenge the conditional order and dismissed the writ petition, leading to the current appeal.

3. The appellant expressed concern over potential additional levies due to the pending appeal on penalty. The Court observed that since the appellant had accepted all disallowances in the original assessment and had already deposited Rs. 5 crores out of the Rs. 10 crores penalty, it was a suitable case for granting a stay till the appeal's disposal.

4. The appellant raised a grievance regarding adverse remarks made by the learned Judge in the order. However, the Court opined that these observations would not significantly impact the appeal's outcome before the Appellate Authority. Consequently, the Court directed the Appellate Authority to grant a stay until the appeal's disposal and instructed not to consider the observations made by the Court or the learned Judge while deciding the appeal.