2018 (11) TMI 1558 - HC - Income Tax

Demand notice - stay petition is pending - Held that - It is for the second respondent/First Appellate Authority to consider the stay petition and pass orders on the same on merits and in accordance with law, without loss of further time. Accordingly, this writ petition is disposed of in the following terms (a) The second respondent shall take up the stay petition filed on 05.10.2018 and pass orders on the same on merits and in accordance with law, within a period of three weeks from the date of receipt of a copy of this order. (b) Till an order is passed by the second respondent as stated supra, the impugned demand shall be kept in abeyance. (c) It is made clear that this Court is not expressing any view on the merits of the matter, as it is for the second respondent to consider and decide.

Summary

Issues:
1. Petitioner aggrieved against demand of tax with interest despite pending appeal.
2. Justification of issuing demand before decision on stay petition.
3. Jurisdiction of First Appellate Authority and Assessing Officer.

Analysis:
Issue 1: The petitioner challenged the demand of tax with interest imposed by the first respondent while the appeal process was ongoing. The Tribunal had remitted the matter back to the Assessing Officer for re-examination, leading to a subsequent order of assessment and dismissal of the rectification petition. The petitioner had also filed a stay petition before the Second Appellate Authority, which was pending at the time the impugned demand was issued.

Issue 2: The petitioner contended that the first respondent was not justified in demanding payment without awaiting the decision on the stay petition by the Second Appellate Authority. The Court acknowledged the pendency of the stay petition and emphasized that the Second Appellate Authority should evaluate and decide on the stay petition promptly and in accordance with the law.

Issue 3: The Court clarified that the Second Appellate Authority, being the First Appellate Authority in this case, had the responsibility to review the stay petition and make a decision based on the merits and legal considerations without any further delay. The Court directed the Second Appellate Authority to resolve the stay petition within three weeks from the date of the Court's order. Until a decision was made on the stay petition, the impugned demand was to be put on hold.

In conclusion, the Court disposed of the writ petition by instructing the Second Appellate Authority to address the pending stay petition promptly and independently. The Court refrained from expressing any opinion on the case's merits, leaving it to the Second Appellate Authority to evaluate and decide. No costs were awarded, and the connected miscellaneous petition was closed as a result of the judgment.