2017 (11) TMI 1087 - HC - Income Tax

Stay petition - attachment orders - As learned counsel for the petitioner would submit that the stay petitions dated 15.03.2017 presented before the first respondent on 21.03.2017 do not contain full details and seeks leave of this Court to file additional grounds to the stay petitions and pursue the matter before the first respondent - Held that - Considering the above factual position, the writ petition is disposed of by directing the petitioner to raise additional grounds before the first respondent in support of their stay petitions dated 15.03.2017 received on 21.03.2017 in the office of the Deputy Commissioner of Income Tax, Central Circle-I, Coimbatore, within a period of one week from the date of receipt of a copy of this order. On receipt of such additional grounds, the first respondent shall afford an opportunity of personal hearing to the authorized representative of the petitioner and pass orders on merits and in accordance with law on the stay petitions as expeditiously as possible, preferably within a period of three weeks from the date, on which, personal hearing is concluded

Summary

Issues:
Impugned communication by Tax Recovery Officer regarding stay of demand, jurisdiction of Tax Recovery Officer, guidelines for stay of demand at first appellate stage, attachment of properties under Income Tax Act, application of modified instructions of Central Board of Direct Taxes, discretion of Assessing Officer in granting stay, additional grounds in stay petitions.

Analysis:
The petitioner challenged a communication from the Tax Recovery Officer regarding the stay of demand raised for assessment years 2009-2010 to 2015-16 until the disposal of first appeals before the Commissioner of Income Tax (Appeals) 18. The communication cited modified CBDT instruction No.1914, requiring the petitioner to pay 20% of the disputed demand and file a stay petition before the Assessing Officer. The Tax Recovery Officer clarified that he cannot consider the petitioner's request for stay, as he lacks the authority to grant such relief.

The High Court noted that the Tax Recovery Officer does not have the power to grant stay of assessment orders, and the appropriate recourse for the petitioner is to approach the Assessing Officer or the First Appellate Authority. The petitioner had submitted stay petitions before the Assessing Officer, which were still pending, and therefore, the petitioner should pursue these petitions rather than seeking similar relief from the Tax Recovery Officer.

The petitioner contended that properties had been attached under the Income Tax Act to secure the Revenue's interests during the appeal process. The petitioner argued that the modified instructions of the CBDT should not apply since the stay petitions were filed earlier. However, the Court refrained from making a determination on this issue, as it was pending before the Assessing Officer.

The Court highlighted the guidelines issued by the Central Board of Direct Taxes for granting stay of demand, emphasizing that the Assessing Officer must consider each case on its merits rather than mechanically following the guidelines. The petitioner sought to file additional grounds in the stay petitions before the Assessing Officer to provide more details and requested the Court's permission to do so.

In conclusion, the Court directed the petitioner to raise additional grounds in the stay petitions before the Assessing Officer within a week and instructed the Assessing Officer to conduct a personal hearing and decide on the stay petitions promptly, preferably within three weeks of the hearing. The respondents were barred from taking coercive action against the petitioner during this period, and no costs were awarded.