2014 (8) TMI 560 - HC - Income Tax

Stay of recovery proceedings - tribunal has already rejected the stay application Held that - The petitioner was granted sufficient installments - the application for stay of recovery proceedings has been rejected by the Tribunal - The installments initially granted contemplated full payment between October 2013 and February 2014 - the petitioner is granted liberty to pay an amount of ₹ 20.00 lacs, which is for the defaults for the months of April, May, June and July 2014, no later than within a period of one week from today if the assessee shows his bona fides by complying with the directions, he shall thereafter have a further opportunity to strictly abide by the time schedule for depositing the remaining installments as fixed in the order - on depositing an amount of ₹ 20.00 lacs within a period of one week from today, the prohibitory order which has been issued by the Department, shall remain suspended so long as the petitioner abides by the time schedule fixed for making payment of the outstanding dues Decided in favour of Assessee.

Issues:
1. Appeal before the Income Tax Appellate Tribunal for Assessment Years 2007-08 and 2008-09.
2. Rejection of application for stay of recovery proceedings.
3. Grant of installments by the Assistant Commissioner of Income Tax.
4. Default in payment of installments.
5. Court's decision on compliance and further opportunities for the petitioner.

Analysis:
1. The petitioner filed three appeals before the Income Tax Appellate Tribunal for Assessment Years 2007-08 and 2008-09, along with an appeal for Assessment Year 2008-09 regarding a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The Tribunal rejected the application for stay of recovery proceedings, leading to subsequent actions by the Assistant Commissioner of Income Tax.

2. The Assistant Commissioner granted installments to the petitioner after assessing the outstanding dues. Despite being granted installments payable between specific periods, the petitioner defaulted in making payments as per the agreed schedule. This led to the cancellation of the installment facility and subsequent rejection of the petitioner's application for stay of recovery proceedings.

3. The High Court noted that the petitioner had paid a total sum of a certain amount against the outstanding dues but had defaulted on subsequent installments. The Court, considering the ends of justice, granted the petitioner an opportunity to rectify the defaults by directing specific payments to be made within stipulated timelines.

4. The Court directed the petitioner to pay a specified amount for the defaults within a week and another due amount by a certain date. The petitioner was given a final chance to comply with the directions, with a warning that failure to do so would lead to the Revenue taking recovery steps. The Court emphasized strict adherence to the payment schedule without further extensions.

5. Upon compliance with the specified payments, the prohibitory order issued by the Department would remain suspended as long as the petitioner followed the payment schedule for outstanding dues. The Court disposed of the petition with no order as to costs, subject to the decision of the Tribunal in the pending appeals. The judgment aimed to balance the interests of justice with the petitioner's obligations under the Income Tax Act.

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