2019 (7) TMI 608 - HC - Income Tax

Stay petition - stay of recovery - Deduction u/s.80P disallowance - condition of depositing 20% of the tax demanded in five equal installments - HELD THAT - Ext.P4 does not warrant interference of this Court in exercise of its power of review under Article 226 of the Constitution of India and hence the first ground against Ext.P4 fails. The next submission of Sri. Harisankar. V. Menon is that the petitioner may be permitted to comply with the order by starting the payment of the installments on or before 30th of July, 2019. To meet the ends of justice this prayer could be considered and accordingly accepted. The issue involves the claim of deduction u/s.80P disallowance. In the totality of the facts, deem it proper to stay 80% of the demand till disposal of appeal or 6 months whichever is earlier. 20% of the balance demand in five equal monthly installments starting from on or before the 30th day of July, 2019 should be paid. AO shall monitor the payment of demand and report and default on part of the appellant. Any default on part of appellant to pay demand will invite revocation of stay granted.

Summary

Issues Involved:
1. Challenge to the condition of depositing 20% in a stay petition.
2. Request for extension of time to make the first installment.

Analysis:

Issue 1: Challenge to the condition of depositing 20% in a stay petition
The petitioner, a Co-operative Bank, challenged the condition imposed in Ext.P4, which required depositing 20% of the tax demanded in five equal installments. The petitioner argued that the condition was onerous and not aligned with the merits of their appeal. However, the Court noted that Ext.P4 was made by the 2nd respondent considering the directions from the CBDT and the merits of the case. The Court found that there was adequate consideration and application of mind by the 2nd respondent in granting the stay order. Consequently, the Court held that there was no justification for interference under Article 226 of the Constitution of India, and the challenge against Ext.P4 failed.

Issue 2: Request for extension of time to make the first installment
Additionally, the petitioner requested an extension of time to commence the payment of installments, proposing to start the first installment on or before the 30th day of July, 2019. The Court, in the interest of justice, accepted this request. The modified order now required the payment of 20% of the balance demand in five equal monthly installments, with the first installment due on or before the specified date. The Assessing Officer was tasked with monitoring the payment and reporting any defaults by the appellant, warning that failure to pay would result in the revocation of the stay granted. This modification was made to accommodate the petitioner's request and ensure compliance with the payment schedule.

In conclusion, the Court disposed of the Writ Petition accordingly, upholding the condition of depositing 20% in installments but allowing an extension for the commencement of payments to meet the ends of justice.