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Issues Involved:
1. Whether the Income-tax Appellate Tribunal (ITAT) has the power to direct the Revenue to refund or return the amount of tax already collected. 2. Prima facie case. 3. Balance of convenience. 4. Financial status of the assessee. 5. Interest of the Revenue. Issue-wise Detailed Analysis: 1. Power of ITAT to Direct Refund of Collected Tax: The Tribunal examined its powers under sections 254(1), 255(6), and 131(1) of the Income-tax Act. It concluded that the ITAT has wide powers similar to those of a Civil Court, including the ability to pass orders necessary to maintain judicial balance. The Tribunal cited several judgments, including Hukumchand Mills Ltd v. CIT and New India Life Insurance Co. Ltd. v. CIT, which affirmed that the ITAT can issue mandatory directions to the Revenue, including ordering the refund of amounts collected during the pendency of an appeal. The Tribunal emphasized that its powers are intended to ensure justice and fairness in the proceedings. 2. Prima Facie Case: The Tribunal noted that the assessee had a valid appeal pending before it, challenging the rejection of its books of account and the application of a 15% gross profit rate by the CIT (Appeals). The Tribunal referenced its previous decisions where similar issues were remanded for reconsideration, suggesting that the assessee had a prima facie case. The significant increase in assessed income from Rs. 1.35 crores to Rs. 40.15 crores further supported the assessee's argument. 3. Balance of Convenience: The Tribunal found that the balance of convenience favored the assessee. The assessee's financial difficulties and the arbitrary and hasty actions of the Assessing Officer, who did not comply with the mandatory provisions of section 220(1), justified the need for relief. The Tribunal also noted that the Assessing Officer had already attached the assessee's fixed deposits and adjusted refunds from other years. 4. Financial Status of the Assessee: The Tribunal considered the assessee's financial status, noting that the assessee had filed a return showing a loss and was facing liquidity issues. The Tribunal accepted the assessee's claim of financial difficulties, supported by evidence such as the bank's restriction on the overdraft limit and the filing of a loss return for the subsequent year. The Tribunal concluded that the assessee was unable to pay the outstanding amount in a lump sum. 5. Interest of the Revenue: The Tribunal balanced the interest of the Revenue by directing the assessee to pay Rs. 50 lakhs in a lump sum and an additional Rs. 1 lakh per month during the pendency of the appeal. This arrangement aimed to protect the Revenue's interest while providing relief to the assessee. The Tribunal also directed the Revenue to refund Rs. 1,25,99,062 to the assessee forthwith. Conclusion: The Tribunal allowed the stay petitions, directing the Revenue to refund Rs. 1,25,99,062 to the assessee and to retain Rs. 50 lakhs as tax deposited. The assessee was instructed to deposit Rs. 1 lakh per month during the pendency of the appeal. Further recovery actions were stayed, and the appeal was scheduled for an expedited hearing. The Tribunal's order aimed to ensure fairness and compliance with legal provisions while addressing the financial difficulties faced by the assessee.
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