2019 (7) TMI 994 - HC - Income Tax

Stay of demand - ACIT requiring the Petitioner to deposit 20% of the outstanding demand on or before 22nd February, 2019 as a condition for stay of the demand - HELD THAT - What would constitute as being unreasonably high-pitched , obviously differs from case to case. In the facts and circumstances of the present case, the Petitioner had to necessarily demonstrate that the Petitioner was suffering genuine hardship in complying with the requirement of depositing 20% of the demand created as a result of the high-pitched assessment. The Petitioner has failed to do so. The question whether the assessment is in fact unreasonably high-pitched, would obviously have to await the decision in the appeal pending before the CIT (A). Since the Petitioner has failed to make out a case of genuine hardship for stay of the demand, the Court finds no reason to interfere with the impugned order. The petition is accordingly dismissed. The pending application is also disposed of. No costs.

Summary

Issues:
Challenge to rejection of stay of demand by Income Tax Officer and requirement to deposit 20% of outstanding demand pending appeal before CIT(A).

Analysis:
The petitioner challenged the order rejecting the stay of demand of ?5,00,04,435/- by the Income Tax Officer and the requirement to deposit 20% of the outstanding demand as a condition for stay. The appeal against the assessment order was pending before the Commissioner of Income Tax (Appeals). The Additional Commissioner Income Tax, in the order dated 18th February, 2019, mandated the petitioner to deposit ?1 crore, being 20% of the outstanding demand, citing relevant instructions. The court noted that the petitioner failed to demonstrate genuine hardship in meeting the deposit condition.

The petitioner sought reliance on previous judgments highlighting that the Assessing Officer's discretion could be interfered with only in exceptional circumstances, such as unreasonably high-pitched assessment or genuine hardship to the assessee. The court emphasized that the determination of what constitutes "unreasonably high-pitched" assessment varies case by case. In this case, the petitioner needed to establish genuine hardship in complying with the deposit requirement resulting from the assessment. However, the petitioner failed to show such hardship, and the question of the assessment being unreasonably high-pitched would be addressed in the pending appeal before the CIT(A).

As the petitioner did not prove genuine hardship for the stay of demand, the court found no reason to interfere with the impugned order. Consequently, the petition was dismissed, and the pending application was disposed of without any costs being awarded.