2023 (6) TMI 1429 - HC - Income Tax

Rejection of Stay of demand - assessee has neither filed ROI in response to the notice u/s. 148 nor furnished any reply / submission. HELD THAT - Admittedly the petitioner filed an appeal against the order in original passed by the first respondent before the third respondent which remained pending and a stay petition dated 01.02.2023 was filed before the first respondent seeking stay of collection of demand. However, the first respondent while entertaining the stay application directed the petitioner to pay 20% of the demand amount, which was passed elaborately on merits keeping in mind the economic condition of the petitioner. The order being a reasoned one and assessing the status and financial condition of the petitioner, as only 20% of the entire demand amount is directed to be deposited, this Court is of the view that the said discretion of the first respondent order is just and reasonable, which cannot be interfered with. Hence, this Court in not inclined to grant any affirmative direction in favour of the petitioner.

Issues:
1. Quashing of letter by the first respondent for Assessment Year 2015-2016 and seeking stay of tax demand pending appeal.
2. Alleged incorrect TDS credits post-amalgamation and change of company name.
3. Issuance of notice u/s. 148 of the Income Tax Act, 1961 for financial transactions during FY 2014-15.
4. Assessment u/s. 147 r/w 144 r.w 144B resulting in a tax demand.
5. Rectification petition filed by the petitioner regarding the assessment tax amount.
6. Rejection of stay petition by the first respondent and the subsequent writ petition challenging the same.

Analysis:
1. The petitioner sought to quash a letter from the first respondent for the Assessment Year 2015-2016 and requested a stay of outstanding tax demand pending appeal. The petitioner's company was amalgamated with another company, leading to confusion in TDS credits. The first respondent rejected the stay petition, directing the petitioner to pay 20% of the demand amount. The court found the first respondent's decision reasonable, considering the petitioner's economic condition, and dismissed the writ petition.
2. The petitioner alleged that incorrect TDS credits were made post-amalgamation and change of company name, causing financial discrepancies. The petitioner's rectification petition regarding the assessment tax amount was partially accepted by the first respondent. The court noted the confusion in TDS credits and the subsequent tax demand issue but upheld the first respondent's decision on the stay petition.
3. A notice u/s. 148 was issued for financial transactions during FY 2014-15, leading to an assessment u/s. 147 r/w 144 r.w 144B and a tax demand. The petitioner contended that the transactions did not belong to their company but to another entity. The court acknowledged the confusion in the transactions but upheld the assessment order, emphasizing the need for proper application of mind in such cases.
4. The assessment u/s. 147 r/w 144 r.w 144B resulted in a tax demand, prompting the petitioner to file a rectification petition. The court noted the discrepancy in the assessment tax amount and the subsequent rectification by the first respondent. Despite the financial implications, the court upheld the assessment order and the first respondent's decision on the stay petition.
5. The petitioner filed a rectification petition regarding the assessment tax amount, which was partially accepted by the first respondent. The court recognized the rectification process but upheld the assessment order and the decision on the stay petition, considering the economic condition of the petitioner.
6. The first respondent rejected the petitioner's stay petition, leading to the filing of a writ petition challenging the decision. The court found the first respondent's decision reasonable and based on the petitioner's financial status, ultimately dismissing the writ petition and closing the connected miscellaneous petition.

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