2019 (6) TMI 442 - HC - Income Tax

Stay of demand - already recovered approximately 38% of disputed tax amount - recoveries would not cause undue financial hardship to the petitioner - HELD THAT - Pending appeal the Department has recovered approximately 38% of disputed tax amount. Secondly the appeals are pending since over 2 years by now and lastly this Court has more than one year back passed interim order preventing the Department from carrying out further recoveries pending appeals. Departmental circulars also envisage stay pending appeal before the Commissioner (Appeals) ordinarily upon deposit of 20% of the disputed tax. This requirement has also been fulfilled in the present case. No special circumstances are pointed out to us to permit the Department to carry out full recoveries. We further record as stated by the counsel for the revenue that some of the appeals are already decided by the Commissioner (Appeals) and also by the Income Tax Appellate Tribunal which are in favour of the petitioner-assessee. That being the position pending disposal of remaining appeals we would not permit the Department to carry out any further recoveries.

Summary

Issues:
Protection against further recoveries arising from 17 assessment orders pending appeal before the Appellate Commissioner.

Analysis:
The petitioner sought protection against further recoveries from 17 assessment orders under appeal before the Appellate Commissioner. The Commissioner of Income Tax had previously refused to grant such protection, leading to the filing of this petition. The Division Bench of the Court had earlier granted an ad-interim stay on recoveries pending the petition's consideration. The petitioner highlighted that the Department had already recovered around 38% of the disputed tax amount through various means, a fact not disputed by the respondents. The appeals had been pending for over two years, and the Court had issued an interim order over a year ago preventing further recoveries. The Departmental circulars required a deposit of 20% of the disputed tax for stay pending appeal, a condition fulfilled in this case. Notably, some appeals had already been decided in favor of the petitioner.

The Court noted that given the circumstances, it would not allow the Department to make any further recoveries pending the disposal of remaining appeals. The judgment directed that there should be no additional recovery against the petitioner until the pending appeals were decided. Furthermore, the remaining appeals were instructed to be disposed of preferably within eight weeks from the date of the order. Consequently, the petition was disposed of in accordance with these directions, providing the petitioner with the requested protection against further recoveries during the appeal process.