2020 (6) TMI 271 - HC - Income Tax

Stay petition - HELD THAT - On instructions of ACIT, states that on 04th June, 2020, the Assessing Officer has referred the stay application to Principal Commissioner of Income Tax- 6, Delhi for consideration. He states, on instructions, that the impugned order dated 19th February, 2020 shall not be acted upon till the Principal Commissioner of Income Tax-6, Delhi, decides the petitioner s stay application. The statements/undertakings given by Mr. Ruchir Bhatia, learned counsel on instructions, are accepted by this Court and the respondents are held bound by the same. Statements/undertakings, the present writ petition and application are disposed of with a direction to the Principal Commissioner of Income Tax-6, Delhi, to decide the stay application within two months. It is clarified that till the said application is decided by the Principal Commissioner of Income Tax-6, Delhi, no coercive action shall be taken against the petitioner on the basis of the impugned order dated 19th February, 2020.

Issues:
Challenge to order requiring payment of disputed tax amount, compliance with CBDT guidelines, authority to pass order demanding tax deposit, stay application referral to Commissioner of Income Tax, no coercive action till stay application decision.

Challenge to Order Requiring Payment of Disputed Tax Amount:
The petitioner challenged an order demanding payment of twenty percent of the disputed tax amount, arguing that most of the demanded sum had been decided in their favor in previous assessments, and a portion was under a pending rectification application. The petitioner contended that the order was unreasoned and violated CBDT guidelines. The respondent, through counsel, informed that the Assessing Officer had referred the stay application to the Principal Commissioner of Income Tax-6 for consideration, and assured that the impugned order would not be enforced until the stay application decision. The court accepted this assurance and directed the Principal Commissioner to decide on the stay application within two months, prohibiting coercive action until a decision is made.

Compliance with CBDT Guidelines:
The petitioner argued that the impugned order demanding a tax deposit was not in line with the guidelines set by the CBDT. The respondent, represented by counsel, assured the court that the order would not be enforced until the Principal Commissioner decided on the stay application. The court accepted this assurance and directed the Principal Commissioner to decide on the stay application within two months, with a prohibition on coercive action until a decision is reached.

Authority to Pass Order Demanding Tax Deposit:
The petitioner contended that the first respondent did not have the authority to pass an order demanding a tax deposit and then refer the matter to the Commissioner of Income Tax, stating that the first respondent had to choose between passing an order or referring the matter. The respondent's counsel informed the court that the Assessing Officer had referred the stay application to the Principal Commissioner for consideration and assured that the impugned order would not be enforced until the stay application decision. The court accepted this assurance and directed the Principal Commissioner to decide on the stay application within two months, prohibiting coercive action until a decision is made.

Stay Application Referral to Commissioner of Income Tax:
The respondent's counsel stated that the Assessing Officer had referred the stay application to the Principal Commissioner of Income Tax-6 for consideration. The court accepted the assurance that the impugned order would not be enforced until the Principal Commissioner decided on the stay application. The court directed the Principal Commissioner to decide on the stay application within two months, with a prohibition on coercive action until a decision is reached.

No Coercive Action Till Stay Application Decision:
In light of the statements made by the respondent's counsel, the court directed that no coercive action should be taken against the petitioner based on the impugned order until the Principal Commissioner of Income Tax-6 decides on the stay application. The court ordered the Principal Commissioner to make a decision within two months and instructed that the order be uploaded on the website immediately, with a copy forwarded to the petitioner's counsel via email.

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