2019 (2) TMI 912 - HC - Income Tax

Revision petition - recovery proceeding initiated - Held that - We do not accept the stand of the Respondents that revision petitions do not survive. These revision petitions were filed way back in 2007. Counsel for the Petitioner had stated before us that the Petitioner had not asked for any adjournment in such revision petitions. Hearing of these revision petitions is thus not delayed due to the assessee. Several years later, we would not permit the department to recover the taxes arising out of the orders which are subject matter of such revision petitions. Stay petition - recovery proceeding - requirement of depositing 20% of tax pending appeals - Held that - This court cannot reduce the requirement of depositing 20% of tax pending appeals. Firstly, these instructions themselves recognise exceptions and areas where the demand can be reduced by the revenue authorities; secondly, the instructions of CBDT to the revenue authorities aim to bringing about uniformity in an administrative action and cannot govern the discretionary powers of the High Court in the writ jurisdiction. We, therefore, cursorily looked at the nature of additions, nature of materials collected by the Assessing Officer and the ground of challenge by the assessee. It would prima facie appear that the assessee Petitioner would have arguable points against many of the additions made by the Assessing Officer. The nature of additions concern the finding of bogus purchases and inflated premium and share application money besides others. The Petitioner would deposit 5% of the principal tax demand arising out the assessment orders for the Assessment Years 2009-10, 2010-11 and 2011-12. This may be done within a period of four weeks from today. Till four weeks from today, there shall be no further coercive recovery against the Petitioner. If the Petitioner deposits the amount as directed, such stay shall continue till final disposal of the appeals by the Commissioner.

Summary

Issues:
Challenge to refusal of unconditional stay against recoveries in favor of the Petitioner arising out of assessments of earlier years.

Analysis:

1. Revision Petitions and Stay against Recoveries:
The Petitioner challenged orders refusing unconditional stay against recoveries from assessments of previous years. The revision petitions filed in 2007 remained pending without fault of the Petitioner. The authorities contended that after one year from filing, the petitions would not survive, citing Section 264 of the Income-tax Act. However, the statute does not provide for academic dismissal or abatement of revisional proceedings. The Petitioner argued for stay until final disposal of appeals, highlighting delays and vulnerabilities in the assessment orders. The Court rejected the authorities' stand on dismissal of revision petitions, emphasizing that delay was not attributable to the Petitioner.

2. Appeals and Deposit Requirements:
Regarding appeals for Assessment Years 2008-09, 2009-10, 2010-11, and 2011-12, the Petitioner faced challenges due to the bulky nature of assessment records. The Court declined to impose a rigid timeframe on the Appellate Commissioner for disposal of appeals, considering the complexity of the cases. The Court also disagreed with the Respondent's contention that the CBDT instructions mandated a 20% tax deposit during appeals, stating that such instructions do not restrict the Court's discretionary powers. The Court assessed the nature of additions made by the Assessing Officer and directed the Petitioner to deposit 5% of the principal tax demand for specific assessment years within four weeks.

3. Stay Order and Future Proceedings:
The Court ordered a 5% deposit by the Petitioner within four weeks to prevent further coercive recovery, with a continued stay until final appeal disposal. The Commissioner was urged to expedite the appeal process, aiming for completion within three months from the order date. The decision balanced the Petitioner's financial obligations with the need for fair and efficient resolution of tax disputes, ensuring a reasonable deposit amount and a timeline for appeal resolution.

This detailed analysis covers the issues raised in the judgment, providing insights into the legal reasoning and outcomes of the Bombay High Court's decision.