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2020 (2) TMI 1696 - HC - Income TaxStay Application - recovery proceedings - disposing a stay application filed by the petitioner in respect of a disputed demand in respect of assessment year (AY) 2017-18 - HELD THAT - A perusal of the order reveal that there has been no application of mind by the Assessing Officer in considering the trifolds aspects of (i) prima facie case (ii) financial stringency and (iii) balance of convenience prior to disposal of the application. See MRS. KANNAMMAL VERSUS INCOME TAX OFFICER WARD 1 (1) TIRUPUR 2019 (3) TMI 1 - MADRAS HIGH COURT The impugned order is set aside. The petitioner will appear before the Assessing Officer on Tuesday the 3rd of March at 10 30 a.m. without expecting any further notice in this regard. The stay application shall be disposed within two weeks thereafter i.e. on or before 17.03.2020. Status quo of recovery be maintained till 17.03.2020.
Issues Involved:
1. Whether the Assessing Officer applied the correct legal principles while disposing of the stay application. 2. Whether the Assessing Officer provided a speaking order considering the relevant factors for granting a stay. 3. Whether the CBDT Circulars and Instructions were adhered to in the process of considering the stay application. 4. The necessity of a de novo consideration of the stay application by the Assessing Officer. Issue-Wise Detailed Analysis: 1. Application of Legal Principles by Assessing Officer: The petitioner challenged the order dated 07.02.2020, which disposed of a stay application related to a disputed tax demand for the assessment year 2017-18. The court noted that the Assessing Officer failed to consider the trifolds aspects: prima facie case, financial stringency, and balance of convenience. These aspects are essential for the proper exercise of discretion in granting or rejecting a stay of the disputed demand. 2. Provision of a Speaking Order: The court observed that the Assessing Officer's order was non-speaking and did not address the critical factors necessary for the grant of a stay. The impugned order simply stated that the stay petition was rejected because the petitioner had not paid 20% of the disputed demand as per the CBDT circulars. The court emphasized that a speaking order is required, which should reflect the application of mind to the relevant factors. 3. Adherence to CBDT Circulars and Instructions: The court referenced several CBDT Circulars and Instructions, including Instruction No. 1914 and its modifications, which provide guidelines for the disposal of stay petitions. These guidelines mandate that the Assessing Officer must consider the existence of a prima facie case, financial stringency, and balance of convenience. The court highlighted that these guidelines are meant to assist assessing authorities and cannot override the basic principles for considering stay petitions. The court found that the Assessing Officer did not adhere to these guidelines in the present case. 4. Necessity of De Novo Consideration: Given the deficiencies in the Assessing Officer's order, the court set aside the impugned order and directed the Assessing Officer to pass a new order de novo on the stay application. The court instructed that this should be done after hearing the petitioner and considering the relevant factors discussed in the judgment. The court also maintained the status quo of recovery until 17.03.2020, providing a specific timeline for the disposal of the stay application. Conclusion: The court concluded that the impugned order was flawed due to the lack of consideration of essential factors and the failure to provide a speaking order. The Assessing Officer was directed to re-evaluate the stay application in light of the guidelines and principles discussed, ensuring a fair and reasoned decision. The writ petition was disposed of with these directions, and the connected miscellaneous petitions were closed without costs.
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