2019 (4) TMI 1314 - HC - Income Tax

Stay of Demand - HELD THAT - It would be in overall interest of all the parties that the CIT(A) who is in seisin of all the appeals for the concerned assessment years, should complete the hearing and pass final orders within six weeks from today. AO who is present in the Court submits that the CIT(A) had sought remand report on certain aspects which would furnish within a week. In these circumstances, the CIT(A) is directed to complete the hearing and pass final orders, within the time indicated i.e. six weeks. As far as the question of stay of demand is concerned, the Court is of the opinion that Principal Commissioner of Income Tax (PCIT) should first decide the application pending under Section 220(6) within ten days. During that time, the notices under Section 226(3) in question shall not be proceeded with and no coercive action shall be taken.

Summary

Issues:
1. Financial constraints leading to inability to satisfy demands under Section 221 of the Income Tax Act for various assessment years.
2. Pending appeals and application under Section 220(6) before the Principal Commissioner.
3. Issuance of notices under Section 226(3) of the Act to trade debtors.
4. Direction for completion of hearing and final orders by the CIT(A) within six weeks.
5. Decision on stay of demand by Principal Commissioner of Income Tax (PCIT) within ten days.

Analysis:

1. The petitioner, facing financial constraints, is unable to meet the demands under Section 221 of the Income Tax Act for multiple assessment years. The petitioner has been depositing funds in a Trust and Retention Account (TRA) under strict supervision due to its financial situation. The petitioner's appeals for the concerned years are pending, and the application under Section 220(6) before the Principal Commissioner for a stay of demand is also awaiting a decision. Additionally, notices under Section 226(3) have been issued to trade debtors and others.

2. The Court, after hearing both parties, emphasizes the importance of expeditiously resolving the pending appeals. It directs the CIT(A) to conclude the hearings and issue final orders within six weeks. The Assessing Officer (AO) assures the Court of providing the required remand report promptly to facilitate the CIT(A)'s decision-making process.

3. Regarding the stay of demand, the Court instructs the Principal Commissioner of Income Tax (PCIT) to decide on the pending application under Section 220(6) within ten days. Until a decision is made, the notices issued under Section 226(3) are to be put on hold, and no coercive actions should be taken during this period.

4. In conclusion, the writ petition is disposed of with the Court's directives for timely resolution of the pending matters. The order is to be provided promptly under the Court Master's signatures for necessary action.