2019 (8) TMI 621 - HC - Income Tax

Stay of demand - Pr. CIT directed to deposit approximately 14% of outstanding demand - Instruction No. 1914 dated 2nd February, 1993 issued by the CBDT - HELD THAT - As far as the issue regarding the prima facie case in favour of the Petitioners is concerned, the Court notes that by the impugned order, the PCIT has not mechanically required the Petitioners to pay 20% of the total demand, but has used the discretion, and passed a reasoned order, determining the amount payable at around 14% of the total demand. Having considered the submissions in light of the documents placed on record, and without expressing any opinion whatsoever on the merits of the above contentions on behalf of the Petitioners, the Court is of the view that the impugned order cannot said to be unreasonable warranting interference by this Court. - petitions are dismissed

Summary

Issues:
1. Correctness of the order passed by the Principal Commissioner of Income Tax directing payment in instalments.
2. Validity of demands raised against the Petitioners.
3. Sustainability of assessments under Section 153A read with Section 153C of the Income Tax Act.
4. Reasonableness of the impugned order in determining the amount payable by the Petitioners.

Analysis:

1. The petitions raised a common issue challenging the order passed by the Principal Commissioner of Income Tax directing the Petitioners, who belong to a group of companies, to pay a specified amount in instalments pending the disposal of their appeals before the Commissioner of Income Tax (Appeals) against assessment orders for certain assessment years.

2. The Court extensively considered the submissions presented by the Senior Counsel for the Petitioners, highlighting the demands raised against each Petitioner and the legal basis for challenging these demands. It was argued that some demands were unsustainable in law due to residency status and validity concerns regarding assessment proceedings under Section 153A read with Section 153C of the Act.

3. Despite the arguments raised, the Court refrained from delving into the merits of the submissions as they were pending consideration in the appeals before the Commissioner of Income Tax (Appeals). The Court noted that the impugned order showed discretion in determining the amount payable by the Petitioners, which was around 14% of the total demand, and deemed the order reasonable without warranting interference.

4. The Court emphasized that the Petitioners were free to present all contentions before the Commissioner of Income Tax (Appeals) for unbiased consideration, unaffected by the observations made in the present order. Consequently, the petitions were dismissed with a modification allowing the payment of the upcoming instalment by a revised deadline, and all pending applications were disposed of accordingly.