2019 (4) TMI 1134 - HC - Income Tax

Recovery proceedings - need for condition for granting interim stay - HELD THAT - The assessee/petitioner is a beneficiary of certain orders of the Tribunal for Assessment Years 2004-2005 and 2011-2012. The copies of these orders are at Exhibits-A1 to A4. Thereafter, even the AO exercising his power, in assessment under the Income Tax Act, 1961 gave effect to the Tribunal's order reducing the entire demand. That was done on 30th March, 2016 vide Exhibits-B1 to B7. Then the statements under Section 200(3) of the Income Tax Act, 1961 were filed by the petitioner, copies of which are at Exhibits- C1 to C8. Still the petitioner was served with a demand notice and thereafter the petitioner preferred appeals and also applications for rectification. Fearing that there would be a coercive recovery, even application for stay has been filed. It is contended that the concerned authority rejected the petitioner's application without applying its mind. This writ petition was kept pending because on merits, an identical issue as raised in the instant petition was considered in a batch of appeals at the instance of the Revenue and in the case of the same assessee by a Division Bench of this Court comprising one of us (S.C.Dharmadhikari, J). On 26th February, 2019, this Court passed its order and the Revenue's Appeals have been dismissed. Now, let the petitioner make an application and invoke the guidelines also, which have been issued by the Central Board of Direct Taxes, New Delhi dated 29th February, 2016 guiding the Commissioner of Income Tax (Appeals). It is not necessary that the Income Tax Appellate Authority will insist on a deposit of certain percentage of the amount and make that as a condition for granting interim stay. In the event the petitioner approaches him and now with the reliance on the Division Bench judgment referred by us hereinabove, we have no doubt in our mind that the Income Tax Appellate Authority and in this case, the Commissioner of Income Tax would definitely apply his mind and consider the changed circumstances. He will not be influenced by the earlier actions and orders and pass a fresh order and communicate the same to the petitioner. Let the petitioner seek intervention once again and raise all pleas and also rely upon the Division Bench judgment. In the event, such an application is made, the Commissioner of Income Tax to dispose of it in the light of the Division Bench judgment and in accordance with law within a period of two weeks from the date of its receipt.

Summary

Issues Involved:
- Petitioner seeking relief from recovery of disputed demand for A.Y. 2012-13 until appeal disposal.
- Allegation of coercive recovery by the concerned authority without proper consideration.
- Pending writ petition due to similar issue consideration in a batch of appeals.
- Dismissal of Revenue's Appeals by the Court on 26th February, 2019.
- Directions to petitioner to apply guidelines issued by Central Board of Direct Taxes for invoking relief.
- Commissioner of Income Tax directed to consider changed circumstances without influence from earlier actions.

Analysis:
1. The petitioner sought relief from the recovery of any part of the disputed demand for Assessment Year 2012-13 until the disposal of their pending appeal. The petitioner contended that they were a beneficiary of Tribunal orders for Assessment Years 2004-2005 and 2011-2012, which reduced the entire demand. Despite filing necessary statements under the Income Tax Act, a demand notice was served, leading to appeals, rectification applications, and a stay application fearing coercive recovery.

2. The writ petition was kept pending due to a similar issue being addressed in a batch of appeals concerning the same assessee. On 26th February 2019, the Court dismissed the Revenue's Appeals, providing a basis for the petitioner to seek relief. The Court directed the petitioner to make an application following the guidelines issued by the Central Board of Direct Taxes, ensuring that the Income Tax Appellate Authority considers the changed circumstances and does not insist on a deposit for granting interim stay.

3. The Court emphasized that the Commissioner of Income Tax should not be influenced by previous actions and orders but should pass a fresh order in light of the Division Bench judgment. The Commissioner was instructed to dispose of the petitioner's application within two weeks from its receipt, considering all pleas and relying on the Division Bench judgment. The Revenue's representative agreed to inform the Commissioner about the Court's order for necessary action.

4. Ultimately, the Court disposed of the writ petition, providing clear directions for the petitioner to seek relief in accordance with the guidelines and ensuring that the Commissioner of Income Tax considers the changed circumstances and acts accordingly without being influenced by past decisions.