2022 (12) TMI 400 - HC - Income Tax

Stay of demand - AO directing the appellant to deposit 20% of the tax as determined in the order of assessment - HELD THAT - Admittedly, the assessments are high pitched assessments and when such high pitched assessments are appealed against and an order of stay is sought for either before the assessing officer by filing an application under Section 220(6) of the Income Tax Act, orders are passed by the assessing officer either keeping the notice of recovery in abeyance and not treating the assessee as an assessee in default till the appeal is disposed of. There are yet another set of cases where the assessing officer for reasons to be recorded imposes certain conditions as a condition for grant of stay. The appellant s case falls under the second category where the assessing officer has directed 20% of the demand to be paid by the assessee for being entitled to grant of stay. It is an undisputed fact that as against the impugned assessment order, appeal has been filed before the Commissioner of Income Tax (Appeals), second respondent on 25th January, 2018. It is not clear as to why the appeal is pending before the Commissioner (Appeals) for more than two years. The appeals are allowed and the order passed in the writ petitions is set aside with a direction to keep the recovery notices issued by the assessing officer kept in abeyance and direct the Commissioner of Income Tax (Appeals), the appellate authority, to disposed of the appeals on merits and in accordance with law after affording an opportunity of personal hearing to the authorised representative of the assessee as expeditiously as possible preferably within a period of 45 days from the date of receipt of the server copy of this judgment and order.

Summary

Issues Involved:
1. Application to condone delay in filing the appeal.
2. Challenge to an order passed by the assessing officer regarding tax deposit.
3. Appeal against the dismissal of writ petitions due to lack of pleading hardship.
4. Stay of recovery proceedings pending appeal before the Commissioner of Income Tax (Appeals).

Issue 1: Application to Condone Delay in Filing the Appeal
The Court considered an application to condone a delay of 469 days in filing the appeal. After hearing counsels for both parties, the Court was satisfied with the reasons provided in the affidavit supporting the application. Consequently, the delay was condoned, and the application was allowed with no order as to costs.

Issue 2: Challenge to Order by Assessing Officer on Tax Deposit
The appeal was against an order by the assessing officer directing the appellant to deposit 20% of the tax determined in the assessment order. The appellant raised various grounds challenging this order, including lack of reasons provided by the assessing officer. The Single Bench had dismissed the writ petitions due to the appellant's failure to plead hardship. The Court noted that the assessments were high-pitched and discussed different scenarios where stay orders are granted pending appeal, emphasizing the need for reasons in such orders.

Issue 3: Appeal Against Dismissal of Writ Petitions
The appellant had filed writ petitions challenging the assessing officer's order but faced dismissal for not pleading hardship. The Court observed that the appellant's return was a loss return, yet the assessing officer made a high-pitched assessment. The appeal before the Commissioner of Income Tax (Appeals) had been pending for over two years. Citing precedents from the High Court of Delhi, the Court directed the appellate authority to dispose of the appeal promptly and keep recovery proceedings in abeyance until then.

Issue 4: Stay of Recovery Proceedings Pending Appeal
Considering the peculiar circumstances of the case, the Court allowed the appeals, setting aside the orders in the writ petitions. Recovery notices were to be kept in abeyance, and the Commissioner of Income Tax (Appeals) was directed to decide on the appeals expeditiously, preferably within 45 days. The Court clarified that it did not delve into the merits of the case, leaving the appellant free to present all factual and legal issues before the appellate authority. No costs were awarded, and parties were to receive certified copies of the order promptly upon formalities' completion.

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