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2019 (5) TMI 636 - HC - Income TaxStay petition - first respondent has summarily rejected the stay application on the ground that the petitioner has not complied with the CBDT's modified guidelines, vide Instruction No.1914 dated 29.02.2016 by making a pre-deposit of 20% of the demand - HELD THAT - As relying on PRINCIPAL COMMISSIONER OF INCOME TAX 5 ORS. VERSUS M/S. LG ELECTRONICS INDIA PVT. LTD. 2018 (7) TMI 1905 - SC ORDER and UTHANGARAI SRI VIDYA MANDIR EDUCATIONAL AND SOCIAL WELFARE TRUST 2019 (3) TMI 1552 - MADRAS HIGH COURT the impugned order has been passed by total non-application of mind and is bad in law and it has to be quashed. In the result, the impugned order dated 15.03.2019 passed by the first respondent in his proceedings PAN AABCT6418R is hereby quashed. The first respondent is directed to dispose the Appeal filed by the petitioner as against the Assessment order dated 29.12.2018 for the Assessment year 2011-12 within a period of four months from the date of receipt of a copy of this order and till the disposal of the Appeal, this Court grants stay of recovery of the demand amount of ₹ 1,91,31,620/- against the petitioner, as per the assessment order dated 29.12.2018 for the assessment year 2011-12.
Issues: Challenge to dismissal of stay application against assessment order for the Assessment year 2011-12 due to non-compliance with CBDT guidelines.
Analysis: 1. The petitioner challenged the dismissal of the stay application based on non-compliance with the CBDT's modified guidelines, requiring a pre-deposit of 20% of the demanded amount. The senior counsel argued that the first respondent rejected the application solely on this ground, citing the CBDT's Instruction No.1914 dated 29.02.2016. 2. The petitioner's counsel referred to a Supreme Court judgment where it was clarified that administrative circulars do not restrict the Commissioner's authority, emphasizing that conditions for granting stay can vary based on individual cases. The court highlighted the power of the appellate authority to pass conditional orders for a lesser amount than the stipulated 20% in the CBDT circular. 3. Additionally, the petitioner's counsel pointed out a Single Bench judgment where it was held that the requirement to remit 20% of disputed tax is not mandatory but more of a guideline. The judgment emphasized the importance of considering prima facie case, financial stringency, and balance of convenience in granting stay applications. 4. The impugned order summarily rejected the stay application without independent consideration, solely based on non-compliance with the CBDT guidelines. Citing the Supreme Court's decision and the Single Judge's judgment, the court found the order to be passed without proper application of mind and declared it as bad in law, warranting its quashing. 5. Consequently, the court quashed the impugned order and directed the first respondent to dispose of the appeal against the assessment order within four months. Until the appeal's disposal, the court granted a stay on the recovery of the demanded amount against the petitioner. The writ petition was disposed of without costs, and the connected application was closed.
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