2020 (4) TMI 55 - HC - Income Tax

Stay of demand - granting a scheme of installment to the petitioner by way of five (5) equated monthly installments of the demand to be paid by the 30th of each month - HELD THAT - Petitioner confirms that no amount has been paid thus far towards the disputed demand. The total demand is for a sum of ₹ 42,43,57,970/-and the tax component comes to a sum of ₹ 25,11,05,384/-. Thereafter, the petitioner is permitted to file a stay application before the Commissioner of Income Tax (Appeals) before whom the appeal is pending, within a period of two (2) weeks from today. Stay of the balance demand till disposal of the stay application by the Commissioner of Income Tax (Appeals), upon a consideration of the matter, the petitioner is directed to remit 10% of the disputed tax of ₹ 25,11,05,384/- forthwith. Such application, if filed within the period as aforesaid and upon compliance of the terms imposed will be taken up and disposed after hearing the petitioner within a period of four (4) weeks from date of filing of the application. If no stay application is, as permitted, filed within the timeline as aforesaid, the order of the Assessing Authority impugned before me will stand revived and the stay granted early stands automatically vacated.

Summary

Issues:
Challenge to re-assessment order for assessment year 2014-15 under the Income Tax Act, 1961.

Analysis:
The petitioner challenged an order of re-assessment for the assessment year 2014-15 under the Income Tax Act, 1961. One of the grounds raised was the absence of a separate speaking order by the Assessing Authority, citing the Supreme Court's judgment in the case of GKN Driveshafts (India) Ltd. vs. Income Tax Officer and Others (259 ITR 19). The petitioner also objected to the flawed basis of the proceedings initiated. Despite this, the petitioner filed a statutory appeal before the Commissioner of Income Tax (Appeals) within the stipulated time. Consequently, the court declined to intervene under Article 226 of the Constitution of India.

The petitioner requested an interim stay of demand, which was considered by the court. An order was issued on 17.02.2020, granting a scheme of installment payment to the petitioner. The installment scheme included five equated monthly installments to be paid by the 30th of each month, starting from February 2020. The petitioner confirmed not having made any payments towards the disputed demand, which amounted to ?42,43,57,970, with a tax component of ?25,11,05,384.

The court permitted the petitioner to file a stay application before the Commissioner of Income Tax (Appeals) within two weeks. It directed the petitioner to remit 10% of the disputed tax amounting to ?25,11,05,384 immediately. The stay application, if filed within the specified timeline and upon compliance with the imposed terms, would be heard and disposed of within four weeks from the date of filing. Failure to file the stay application within the given timeline would result in the revival of the Assessing Authority's order, leading to the automatic vacation of the earlier granted stay.

Consequently, the writ petition was disposed of in the mentioned terms, and connected miscellaneous petitions were closed without any costs being imposed.