2000 (7) TMI 238 - AT - Income Tax

Summary

Issues:
1. Stay petitions filed by the assessee seeking to stay outstanding demands for block period 1988-89 to 1997-98.
2. Contention regarding additions made without incriminating documents during search.
3. Discrepancy between declared undisclosed income and assessed income.
4. Financial position of the assessee and ability to meet the outstanding demand.
5. Interpretation of CBDT's Instruction No. 96 and its applicability to the case.
6. Distinction between appeals under sections 246 and 253 of the IT Act.
7. Consideration of the decision of the Hon'ble jurisdictional High Court in a similar case.
8. Decision on staying the recovery of outstanding demands till the disposal of appeals.

Analysis:
The Appellate Tribunal ITAT JODHPUR addressed two stay petitions filed by the assessee concerning outstanding demands for the block period 1988-89 to 1997-98. The assessee argued that additions in block assessments were made without incriminating documents found during the search, contending that such additions should be considered in regular assessment, not under special assessment. The declared undisclosed income by the assessee significantly differed from the assessed income, leading to a request for a stay on tax recovery. The Tribunal considered the financial position of the assessee and cited a judicial pronouncement stating that tax collection should be held in abeyance when the assessed income is substantially higher than the returned income.

The Tribunal deliberated on the applicability of CBDT's Instruction No. 96, emphasizing the need for a stay of recovery during the appeal process. It differentiated between appeals under sections 246 and 253 of the IT Act, highlighting that the current appeals were under section 253 and pending before the Tribunal, not invoking section 220(6) or the mentioned circular. The Tribunal also referenced a decision from the Hon'ble jurisdictional High Court and another case supporting the view that the stay provision should be granted in such circumstances.

A member of the Tribunal added observations to the order, clarifying the purpose of CBDT's Instruction No. 96 and its relevance to cases involving section 220(6). The member emphasized that the current appeals falling under section 253 did not align with the provisions mentioned in the circular. The member also noted the absence of representation from the Revenue in a previous case, suggesting a possibility of vital aspects not being brought to the Hon'ble High Court's notice. Ultimately, both members of the Tribunal agreed to stay the recovery of outstanding demands until the appeals were disposed of, following the decision of the Hon'ble jurisdictional High Court and considering the specific circumstances of the case.