2020 (11) TMI 655 - HC - Income Tax

Stay of penalty demand subject to payment of 20% of the said amount - Petitioner also sought to restrain the respondents from initiating recovery of any demand of penalty imposed on the petitioner for the relevant assessment years - HELD THAT - This Court is of the opinion that even if the present writ petition(s) are dismissed at this stage, the maximum amount that the petitioners can be directed to deposit pursuant to the impugned orders and circulars issued by the CBDT would be 20% of the remaining demand which can only be ₹ 1,71,03,416/-. Keeping in view the aforesaid factual scenario, this Court is of the view that there is no reasonable ground for the revenue to hold the excess amount i.e. ₹ 8,28,96,584/- and the same is directed to be released to the petitioners within four weeks. With these directions, present writ petitions and pending applications stand disposed of.

Summary

Issues:
Challenging penalty demands for assessment years 2006-07 to 2010-11, Stay on penalty demands subject to payment of 20%, Refrain from initiating recovery of penalty, Refund of excess amount, Pending appeals before Commissioner of Income Tax (Appeals) and ITAT, Deletion of penalty for assessment year 2011-12.

Analysis:
The petitions challenged penalty demands for assessment years 2006-07 to 2010-11, seeking a stay on the demands subject to payment of 20% and to prevent the initiation of recovery. A previous order required a deposit of ?10 crores, and subsequent developments led to the dropping of penalty amounts for 2009-10, 2010-11, and 2011-12. The remaining penalty amount for 2006-07, 2007-08, and 2008-09 was ?8,55,17,078, with 20% amounting to ?1,71,03,416, requesting a refund of the balance. The respondents acknowledged pending appeals on merit before the ITAT, suggesting a potential reemergence of demands if decided in favor of the Revenue.

The Court noted that even if the petitions were dismissed, the petitioners could only be directed to deposit 20% of the remaining demand, totaling ?1,71,03,416. Considering this, the Court found no reasonable ground for the Revenue to retain the excess amount of ?8,28,96,584, directing its release to the petitioners within four weeks. The order disposed of the present writ petitions and pending applications, with instructions for immediate website upload and email forwarding to the counsel.

In conclusion, the judgment addressed the challenged penalty demands for specific assessment years, the stay on demands, refund of excess amounts, and the potential impact of pending appeals on the penalty situation. The Court's decision focused on the proportionate deposit requirement and the release of the surplus amount to the petitioners, ensuring a fair resolution based on the circumstances presented during the proceedings.