2024 (3) TMI 1210 - HC - Income Tax

Rejection of request for exemption from pre-deposit - basis of imposing the liability of the petitioner - HELD THAT - Taking into consideration the notification, Instruction No.1914 issued u/s 220 of the Income Tax Act as read with OM F. No.404/72/93-ITCC , we deem it appropriate to direct the first Appellate Authority CIT (appeals) to decide the appeal within a period of three months, without insisting on the recovery of the demand. Till the pendency of the appeal, the demand shall be deemed to be stayed without depositing the pre-deposits 20%.

Summary

Issues Involved:
The issues involved in the judgment are the wrongful rejection of exemption from pre-deposit by the authority and the imposition of liability on the petitioner without jurisdiction, which was challenged in the appeal.

Issue 1: Wrongful Rejection of Exemption from Pre-deposit
The learned counsel for the petitioner argued that the authority had wrongfully rejected their request for exemption from pre-deposit, despite submitting documents that were ignored. The Court considered this submission and directed the first Appellate Authority CIT (appeals) to decide the appeal within three months without insisting on the recovery of the demand. It was further stated that during the pendency of the appeal, the demand shall be deemed to be stayed without depositing the pre-deposits 20%.

Issue 2: Imposition of Liability Without Jurisdiction
The petitioner's counsel contended that the basis of imposing liability on the petitioner was without jurisdiction, which was challenged in the appeal. The Court acknowledged this argument and, based on the notification and Instruction No.1914 issued under Section 220 of the Income Tax Act, directed the CIT (appeals) to decide the appeal expeditiously without pressing for the pre-deposit.

The High Court, comprising Hon'ble Mr. Justice Sanjeev Prakash Sharma and Hon'ble Mrs. Justice Sudeepti Sharma, heard the case where the petitioner sought exemption from pre-deposit, which was wrongfully rejected by the authority. The Court, considering the submissions and relevant legal provisions, directed the first Appellate Authority CIT (appeals) to decide the appeal within three months without insisting on the recovery of the demand. Additionally, the Court stated that during the appeal's pendency, the demand would be stayed without the need for pre-deposits. The writ petition was disposed of accordingly.