2019 (9) TMI 1719 - HC - Income Tax

High pitched assessment - Entitlement to waive off the pre-deposit of 20% of the assessed tax liability - as contented assessment was calculated which is 78 times higher - HELD THAT - The perusal of the assessment order would show that the detailed discussion has been made and it is out come after the seizure was made and the various documents were seized. The petitioner contended that the assessment has been made high pitched which is 78 times more. The Assessment Officer justifies the same in the order, which is of course subject matter of adjudication before the first appeal pending before the Commissioner, Income Tax (Appeals). In view of the facts of the case, we are not inclined to allow the application for interim relief. Accordingly, the same is rejected. Petitioner shall be at liberty to make request before the Assessment Officer for relaxation, which the Assessment Officer may decide in the facts situation of this case.

Summary

Issues:
1. Assessment order passed based on past six years assessment
2. Discrepancy in the assessed amount
3. Application of circular by CBDT
4. High pitched assessment challenged
5. Petitioner's request for early appeal decision
6. Opposing arguments by respondent
7. Justification of assessment order
8. Rejection of application for interim relief

Analysis:
1. The assessment order in question was passed based on the past six years assessment, resulting in a significant discrepancy in the assessed amount. The petitioner highlighted that the assessment amount was calculated to be 78 times higher than the declared income of Rs. 1,12,31,353. This discrepancy raised concerns about the validity and accuracy of the assessment.

2. The petitioner contended that the circular issued by the Central Board of Direct Taxes (CBDT) prescribed that in cases like this, the assessee should pay 20% of the assessed amount. However, if the assessment itself is high pitched, the purpose of paying 20% would be defeated. The petitioner argued that even the 20% amount would be disproportionately high compared to the declared income.

3. Reference was made to a circular of CBDT, which was modified to require a 20% deposit in cases of disputed demands. The respondent argued that the assessment was justified based on thorough investigation and seizure of documents. The respondent opposed the petitioner's request for an early appeal decision without making any payment towards the assessed amount.

4. The assessment order was defended by the Assessment Officer, who justified the high pitched assessment in the order. The assessment was made after detailed discussions and examination of seized documents. The order was subject to adjudication before the Commissioner, Income Tax (Appeals), indicating that the matter was still under review.

5. The petitioner sought an early decision on the appeal, emphasizing the need to determine the correctness of the high pitched assessment promptly. However, the court declined to grant interim relief, stating that the petitioner could request relaxation from the Assessment Officer, who would decide based on the circumstances of the case.

6. In conclusion, the court rejected the application for interim relief, allowing the petitioner to seek relaxation from the Assessment Officer. The decision highlighted the ongoing dispute regarding the high pitched assessment and the need for further adjudication before the Commissioner, Income Tax (Appeals).