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2019 (4) TMI 53 - HC - Income TaxStay of demand - Recovery proceedings - Non speaking order - HELD THAT - In the light of my observations in the matter M/S. SHRIRAM FINANCE VERSUS THE PRINCIPAL COMMISSIONER OF INCOME TAX-1, THE INCOME TAX OFFICER, THE COMMISSIONER OF INCOME TAX (APPEALS) 2019 (3) TMI 1478 - MADRAS HIGH COURT as equally applicable to the facts and circumstances of the present case, the petitioner is directed to appear before the Assessing authority on 15.03.2019 at 2.30 pm. Appropriate orders on the application for stay shall be passed by the assessing authority after hearing the petitioner and considering the materials placed by the petitioner in support of the request for stay, within a period of two weeks thereafter (i.e.,) on or before 29.03.2019. There shall be an order of interim stay of recovery, till then.
Issues Involved:
1. Validity of the impugned order dated 06.02.2019. 2. Compliance with CBDT Circulars and Instructions. 3. Procedure for the disposal of stay petitions. 4. Interim relief and status quo maintenance. Issue-wise Detailed Analysis: 1. Validity of the Impugned Order Dated 06.02.2019: The petitioner challenges the impugned order dated 06.02.2019, which directed the petitioner to remit 20% of the disputed demand by 11/02/2019. The court found the impugned order to be "cryptic and non-speaking," lacking detailed reasoning or consideration of the petitioner's circumstances. The court emphasized that the manner of disposal of the stay petition was inadequate and required a more detailed and reasoned approach. 2. Compliance with CBDT Circulars and Instructions: The court referred to various CBDT Circulars and Instructions, including Instruction No.1914 and its subsequent modifications, which provide guidelines for the disposal of stay petitions. These guidelines stress the importance of considering factors such as financial stringency, irreparable injury, and undue hardship. The court noted that the assessing officer failed to adhere to these guidelines, as the impugned order did not reflect any consideration of these factors. 3. Procedure for the Disposal of Stay Petitions: The court highlighted the procedural requirements for disposing of stay petitions, as outlined in the CBDT Circulars. The assessing officer is required to pass a speaking order, considering all relevant factors and providing detailed reasoning. The court criticized the assessing officer's rejection of the stay petition as mechanical and lacking application of mind. The court reiterated that the assessing officer must examine the existence of a prima facie case, financial stringency, and balance of convenience before deciding on a stay petition. 4. Interim Relief and Status Quo Maintenance: The court granted an interim stay of recovery proceedings until the disposal of the stay application. The petitioner was directed to appear before the assessing authority on 15.03.2019, and the assessing authority was instructed to pass a reasoned and speaking order within two weeks thereafter. The court ordered that the status quo regarding recovery should be maintained until the disposal of the stay application. Conclusion: The court set aside the impugned order dated 06.02.2019, directing the assessing officer to reconsider the stay petition in accordance with the guidelines and principles outlined in the CBDT Circulars. The court emphasized the need for a detailed and reasoned approach in disposing of stay petitions, considering factors such as financial stringency and balance of convenience. The writ petition was disposed of with the direction to maintain the status quo regarding recovery until the stay application is decided.
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