2016 (9) TMI 1192 - HC - Income Tax

Grant of interim orders - grant of stay - Held that - The Officer, while considering the Stay Application, should consider the three factors pointed out above, should see as to whether the assessee has made out a case for grant of unconditional interim order/conditional interim order, or for rejecting the application for stay, in toto. Therefore, to do such exercise, reasons have to be recorded, and there is no such reasons assigned in the impugned order presumably, because, the first respondent, being a Subordinate Officer, would be bound by the circulars issued CBDT. Considering the fact that, in respect of two cases, pertaining to the two assessment years 2007-08 and 2008-09, the petitioner has succeeded before ITAT, and other Appeals are also pending, and those Appeals should also be heard by the Commissioner of Income Tax Appeals -11. So far as the assessment order, dated 06.09.2016, for the years 2010-11 to 2012-13 is concerned, it is submitted by the learned counsel appearing for the petitioner that the certified copy of the order is yet to be received by them, and they would challenge the same before the Tribunal. Thus the Appeals filed by the petitioner for the assessment years 2010-11 to 2012-13, have already been disposed of, and the impugned assessment is relating to the year 2013-14, it would be suffice to direct the fourth respondent-Commissioner of Income Tax (Appeals)-11 to consider the Appeal Petition filed by the petitioner on merits and in accordance with law, as expeditiously as possible, preferably, within a period of eight weeks from the date of receipt of a copy of this order. Until the disposal of the Appeal, no action for recovery shall be initiated by the respondents.

Summary

Issues:
Challenge to order directing remittance of tax demand for assessment year 2013-14 based on Income Tax Act, 1961.

Analysis:
The petitioner, a Tamil Nadu State Marketing Corporation Limited, challenged an order directing remittance of 15% of tax demand for the assessment year 2013-14 under Section 143(3) of the Income Tax Act, 1961. The petitioner filed a Stay Petition elaborating on various facts and referring to earlier successful appeals before the Income Tax Appellate Tribunal for the years 2007-08 and 2008-09. The petitioner sought a stay on the demand and requested the Appeal to be heard by the Commissioner of Income Tax (Appeals) - 11.

The Court granted an interim stay on the recovery action based on similar orders passed in the petitioner's previous cases. The Court highlighted the importance of considering three factors - prima facie case, balance of convenience, and irreparable hardship - while granting interim orders. The Court emphasized that circulars issued by the Central Board of Direct Taxes (CBDT) should only guide the Officer and not restrict their discretion in granting interim orders. It noted the lack of reasons in the impugned order, possibly due to the Officer being bound by CBDT circulars.

Considering the petitioner's success in previous appeals and pending appeals for other years, the Court directed the Commissioner of Income Tax (Appeals) - 11 to expeditiously consider the Appeal for the year 2013-14 within eight weeks. The Court ordered no recovery action to be initiated by the respondents until the Appeal is disposed of. The Writ Petition was disposed of with no costs, and the connected Miscellaneous Petition was closed.