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2019 (6) TMI 610 - HC - Income TaxStay of demand - directing petitioner to pay 80% of the demand for each financial year without considering the Office Memorandum issued by the Government of India, Ministry of Finance dated 31st July, 2017 which categorically states that when the matters are before the Commissioner (Appeals) if the assessee pays 20% of the disputed demand, the rest will be stayed - HELD THAT - We direct the petitioner to pay 20% of the disputed demand for all the financial years within seven days and in the event, the petitioner deposits such amount, the CIT (Appeals) XXIV is requested to conclude the hearing within two months from the date of communication of this order to the Commissioner (Appeals). If 20% of the disputed amount is deposited by the petitioner company within seven days, the Assistant Commissioner of Income Tax being the respondent no.1 will not take any coercive measure till the disposal of the appeals by the Commissioner of Income Tax (Appeals) XXIV.
Issues:
1. Stay of demand under section 201(1)/201(1A) of the Income Tax Act. 2. Interpretation of the Office Memorandum dated 31st July, 2017. 3. Payment of disputed demand by the petitioner. 4. Early hearing of appeals by the Commissioner of Income Tax (Appeals). Stay of Demand under Section 201(1)/201(1A) of the Income Tax Act: The petitioner, a company, filed appeals against orders passed under section 201(1)/201(1A) of the Income Tax Act before the Commissioner of Income Tax (Appeals) - XXIV, Kolkata. The petitioner sought a stay of demand till the appeals were disposed of. The respondent, Assistant Commissioner of Income Tax, directed the petitioner to pay 80% of the demand for each financial year without considering the Government's Office Memorandum of 31st July, 2017, which stated that paying 20% of the disputed demand would suffice for a stay during the pendency of appeals. The Court, after hearing both parties, directed the petitioner to pay 20% of the disputed demand within seven days. If the petitioner complied, the Commissioner of Income Tax (Appeals) was instructed to conclude the hearing within two months from the date of the order. Interpretation of the Office Memorandum dated 31st July, 2017: The key issue revolved around the interpretation of the Office Memorandum issued by the Government of India, Ministry of Finance on 31st July, 2017. The petitioner argued that the Memorandum stipulated that paying 20% of the disputed demand would suffice for a stay on the remaining amount during the pendency of appeals. However, the respondent demanded 80% payment, disregarding the Memorandum's provisions. The Court upheld the petitioner's interpretation and directed the petitioner to pay only 20% of the disputed demand within seven days for a stay on the remaining amount. Payment of Disputed Demand by the Petitioner: The petitioner company agreed to pay 20% of the disputed demand within a week from the date of the order. The Court accepted this commitment and directed the petitioner to fulfill the payment within the stipulated time frame. Compliance with this payment would ensure that no coercive measures would be taken by the Assistant Commissioner of Income Tax until the appeals were disposed of by the Commissioner of Income Tax (Appeals) - XXIV. Early Hearing of Appeals by the Commissioner of Income Tax (Appeals): Both parties agreed to expedite the hearing of appeals by the Commissioner of Income Tax (Appeals). The Court, considering the petitioner's commitment to pay 20% of the disputed demand within seven days, requested the Commissioner of Income Tax (Appeals) - XXIV to conclude the hearing within two months from the date of communication of the Court's order. This directive aimed to ensure a timely resolution of the pending appeals. In conclusion, the judgment resolved the issues related to the stay of demand under the Income Tax Act, interpretation of the Office Memorandum, payment of the disputed demand by the petitioner, and the early hearing of appeals by the Commissioner of Income Tax (Appeals). The Court's decision emphasized compliance with the Memorandum's provisions, directing the petitioner to pay 20% of the disputed demand within seven days and ensuring an expedited hearing process for the pending appeals.
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