2018 (7) TMI 1629 - HC - Income Tax

Stay of demand - recovery proceedings - Held that - Fix a lumpsum amount to be paid by the petitioner in installments and thereafter permit the petitioner to prosecute the appeal pending before the CITA. This court is of the view that if the petitioner is permitted to file another fresh stay application before the CITA, it will unnecessarily result in another round of litigation, which will have impact in disposal of the appeal. Therefore this court deems it fit to fix an amount of ₹ 35,00,00,000/- (Rupees Thirty Five Crores only) to be paid by the petitioner company in 12 equal monthly installments as a condition to stay the recovery proceedings and keep it in abeyance till the disposal of the appeal pending before the CIT-A.

Summary

Issues:
Challenging common order in writ appeals against assessment orders under Income Tax Act, 1961.

Analysis:
1. Background: The petitioner filed returns for assessment years 2011-2012 to 2016-17, which were processed under section 143(1) of the Income Tax Act. Subsequently, assessments were completed under section 143(3) after a search was conducted on the petitioner's premises.
2. Stay Petitions: The petitioner filed stay petitions before assessing officer and Principal Commissioner of Income Tax to avoid tax collection pending appeal against assessment orders. Various orders were passed directing the petitioner to pay percentages of disputed amounts as a condition for stay of tax collection.
3. Writ Petitions: Writ petitions were filed challenging the orders passed by assessing officer and Principal Commissioner of Income Tax. The Single Judge directed the petitioner to pay 5% of the tax demanded for each assessment year within a specified period.
4. Submissions: The Senior Counsel for the petitioner argued against high-pitched assessments and financial constraints due to frozen bank accounts. The Standing Counsel for the respondents argued that the petitioner failed to show bonafide by not making any payments towards tax dues and engaging in dilatory tactics.
5. Court's Discussion: The Court observed that the petitioner had been filing multiple stay petitions without pleading undue hardship or providing relevant facts. The Single Judge considered the petitioner's lack of seriousness in complying with orders and directed payment of 5% of tax demanded for each assessment year.
6. Conclusion: The Court modified the Single Judge's order, directing the petitioner to pay a lump sum amount in installments to stay recovery proceedings until the appeal is disposed of. The petitioner was given specific directions for payment and compliance, with a warning of automatic vacation of stay in case of default.

This detailed judgment by the Madras High Court addresses the legal complexities surrounding challenges to assessment orders under the Income Tax Act and the conditions for staying tax collection pending appeal. The Court's analysis of the petitioner's actions, submissions by counsels, and the ultimate decision to fix a lump sum amount for payment in installments provide a comprehensive overview of the case.