2019 (11) TMI 314 - HC - Income Tax

Stay of demand u/s 220 - Deduction u/s 80P - Addition u/s 68 - HELD THAT - Writ petition by directing the 2nd respondent to consider and pass final orders on Ext.P3 appeal pending before him, within an outer time limit of four months from the date of receipt of a copy of this judgment, after hearing the petitioner. It is made clear that till such time as orders are passed by the 2nd respondent in the appeal as directed, and the order communicated to the petitioner, further proceedings including those pursuant to Exts.P4, P7, P9 and P12 communications, for recovery of amounts confirmed against the petitioner shall be kept in abeyance on condition that the petitioner pays an amount equivalent to 1% of the tax demanded on the additions made in the assessment order u/s 68 within one month from today. It is made clear that the attachment over the accounts of the petitioner, as contemplated in Ext.P9 notice, shall stand lifted forthwith on the petitioner depositing the aforementioned 1% amount with the respondents.

Summary

Issues:
1. Stay application and demand under Income Tax Act
2. Appeal process and orders passed by authorities
3. Impugned orders based on previous judgments
4. Relief sought in the writ petition

Issue 1: Stay application and demand under Income Tax Act
The petitioner filed an appeal against assessment orders under the Income Tax Act and requested a stay on the demand confirmed against them. The Appellate Authority directed the petitioner to pay the demand under Section 68 of the Income Tax Act as a condition for the stay of the demand related to the disallowance of deduction under Section 80P.

Issue 2: Appeal process and orders passed by authorities
The petitioner, dissatisfied with the Appellate Authority's order, approached the Assessing Authority and the Principal Commissioner under Section 220(6) of the Income Tax Act. Orders were issued directing the petitioner to pay 20% of the disputed demand within a specified timeframe. The petitioner challenged these orders in the writ petition.

Issue 3: Impugned orders based on previous judgments
The petitioner contested the orders, citing a decision of the Court in a similar matter regarding the deduction claimed under Section 80P of the Income Tax Act. The petitioner argued that, based on previous directions, only 1% of the tax amount confirmed under Section 68 of the Income Tax Act needed to be deposited pending the appeal's disposal.

Issue 4: Relief sought in the writ petition
The Court directed the Appellate Authority to consider and pass final orders on the pending appeal within four months. Until then, further recovery proceedings were stayed on the condition that the petitioner pays 1% of the tax demanded under Section 68 of the Income Tax Act within one month. The attachment over the petitioner's accounts was to be lifted upon depositing the specified amount.

This judgment provides relief to the petitioner by setting conditions for the stay of the demand and directing timely consideration of the appeal by the Appellate Authority. The decision is based on the specific circumstances of the case and aims to balance the interests of the taxpayer and the tax authorities.