2022 (4) TMI 638 - HC - Income Tax

Stay of demand - condition of deposit of 20% as a pre-condition for grant of stay - appeal filed by the petitioner before the first Appellate Authority is pending and thus the Appellate Authority be directed to dispose of the said appeal expeditiously without directing the petitioner to deposit the amount of 20% of the tax demand - HELD THAT - Perusal of the order passed by the Assessing Officer on 24.5.2019 clearly indicates that the Assessing Officer has dealt with all the issues raised by the petitioner as to why the Assessing Officer shall exercise his discretion not to impose any condition of deposit of 20% as a pre-condition for grant of stay. The petitioner was not satisfied with the order passed by the Assessing Officer and filed Review Petition, which also came to be rejected by the learned Commissioner of Income Tax by passing a detailed reasoned order dated 26.8.2019. Assessing Officer was justified in not exercising the discretion to grant unconditional stay or stay on payment of lesser amount than 20% of the tax demand. The Assessing Officer while rejecting the said case of the petitioner has recorded reasons in great detail. The Commissioner of Income Tax while rejecting the Review Application has recorded reasons as to why the order passed by the Assessing Officer shall not be interfered with. We do not find any infirmity in the order passing by the Assessing Officer as well as by the Commissioner of Income Tax while rejecting the request of the petitioner for granting unconditional stay during the pendency of the appeal filed by the petitioner. We are not inclined to accept the submission of the petitioner that since the appeal is pending for quite some time, instead of directing the petitioner to comply with the order passed by the Assessing Officer which is not recalled by the order passed by the Commissioner of Income Tax, the Appellate Authority shall be directed to dispose of the appeal expeditiously. The Appellate Authority has not fixed any date for hearing of the appeal in view of the petitioner not having complied with the conditional order passed by the Assessing Officer. Though this petition was filed by the petitioner on 26.9.2020, no interim relief has been granted by this Court in favour of the petitioner. In our view, the petition is devoid of merit and is accordingly dismissed. Time to deposit 20% of the tax demand is extended by four weeks from today.

Issues:
1. Impugning order rejecting review application for stay
2. Assessment order for the Assessment Year 2015-16
3. Direction to deposit 20% of tax demand for stay
4. Quashing and setting aside of order
5. Review application rejection
6. Pending appeal before the first Appellate Authority
7. Compliance with deposit of 20% of tax demand
8. Justification of Assessing Officer's decision
9. Direction to dispose of appeal expeditiously
10. Comparison with judgment in another case

Analysis:
1. The petitioner challenged the order rejecting the review application for stay, passed by the Principal Commissioner of Income Tax-2, Aurangabad, through a petition under Article 226 of the Constitution of India. The petitioner had already filed an appeal against the Assessment Order for the Assessment Year 2015-16 on grounds of assessing a specific income amount and final demand. The Assessing Authority directed the petitioner to deposit 20% of the tax demand for stay, leading to a series of legal actions and judgments.

2. The Division Bench of the Court observed that the case put forth by the petitioner was not adequately considered while passing the impugned order. Consequently, the order was quashed, and the proceedings were remanded for a fresh decision. Despite this, a subsequent order was passed directing the petitioner to deposit 20% of the tax demand, which led to a review petition being filed and rejected by the Commissioner of Income Tax.

3. The petitioner argued for the disposal of the pending appeal without complying with the deposit condition, citing a previous judgment where a similar directive was given. However, the Revenue contended that the substantial amount demanded justified the conditions imposed. The Assessing Officer and the Commissioner of Income Tax both provided detailed reasons for upholding the deposit requirement and denying unconditional stay during the appeal.

4. The Court found that the Assessing Officer's decision to not grant unconditional stay or allow a lesser deposit than 20% was justified. The detailed reasons provided by the Assessing Officer and the Commissioner of Income Tax were deemed sufficient, and no interference with their orders was warranted. The petitioner's argument regarding the pending appeal and compliance with the deposit condition was not accepted by the Court.

5. The Court distinguished a previous judgment cited by the petitioner, emphasizing that the facts of that case were different and not applicable to the present situation. The petitioner's case was deemed distinct, and the judgment in the cited case did not advance the petitioner's arguments. Ultimately, the petition was dismissed, with a four-week extension granted for depositing 20% of the tax demand, failing which the appeal would stand dismissed without further reference to the Court.

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