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2018 (3) TMI 1361 - HC - Income TaxStay of a demand u/s 220(6) - recovery of dues - non payment of pre deposit i.e. 20% - Held that - The petitioner seeks extension of time to fulfill its above undertaking to the Principal Commissioner of Income Tax. In support, the affidavit of Mr. P.A. Gaikwad, the Chief Administrative Officer, dated 23rd March, 2018 has been tendered in Court on behalf of the petitioner. The same is taken on record. In the affidavit it is stated that out of ₹ 1,16,05,939/( being 20% of penalty of ₹ 5,80,29,698/), the petitioner has already paid a sum of ₹ 10 lakhs. The affidavit undertakes to pay sum of ₹ 25 lakhs on or before 26th March, 2018 and the balance amount of ₹ 81,05,939/would be paid on or before 15th April, 2018. Mr. P.A. Gaikwad, the deponent of the affidavit is in Court and the statement made by him in the affidavit is accepted. The respondents are directed not to adopt any coercive action till 16th April, 2016 for recovery of its dues. It is made clear to the petitioner that no further extension of time to honour its commitment to the Revenue will be granted.
Issues:
Challenge to order of Deputy Commissioner of Income Tax partially rejecting application for stay of demand under Section 220(6) of the Income Tax Act, 1961. Analysis: The High Court of Bombay heard a petition challenging an order by the Deputy Commissioner of Income Tax dated 19th February, 2018. The order partially rejected the petitioner's application for stay of a demand amounting to ?5,80,29,696 under Section 220(6) of the Income Tax Act, 1961. The order required the petitioner to deposit 20% of the demand, which would result in a stay of the balance amount of penalty imposed under Section 271(1)(c) of the Act for Assessment Year 2014-15. The petitioner was directed to deposit ?1,16,05,939, representing 20% of the total demand. The petitioner, through its Managing Director, had given an undertaking to the Principal Commissioner of Income Tax to make the required payment by a specific date. However, the petitioner failed to honor this commitment. Subsequently, the petitioner sought an extension of time to fulfill the undertaking. An affidavit by the Chief Administrative Officer was submitted, stating that a partial payment of ?10 lakhs had already been made out of the required amount. The affidavit further committed to paying ?25 lakhs by a specified date and the remaining balance by a later date. The Court accepted the statements made in the affidavit and directed the respondents not to take coercive action for recovery until a certain date. The Court made it clear that no further extension would be granted beyond the specified dates for payment. Consequently, the petition was disposed of based on the terms mentioned above, with no order as to costs. The Court's decision emphasized the importance of honoring commitments to the Revenue and the consequences of failing to comply with agreed-upon payment schedules.
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