2023 (4) TMI 396 - HC - Income Tax

Stay of demand - petitioner has been directed to pay 20% of the demand - petitioner has approached this Court seeking direction to the Appellate Authority to consider and pass orders on the appeal without insisting on the payment as directed by the Assessment Officer - HELD THAT - In the case on hand, the returned income was only Rs.6,93,940/- and the amount which has been arrived at is Rs.4,94,18,803/-. It is almost 71 times and going by the yardstick followed by the Division Bench of the Delhi High Court 2009 (2) TMI 410 - DELHI HIGH COURT , it definitely comes under the nomenclature of high pitched. It is in the above circumstances petitioner submits that it is a case where the Appellate Authority should be directed to hear the appeal and dispose it of without insisting on payment. The counsel for the Department submitted that the appeal can be directed to be disposed of but however, it may be on the basis of a condition on payment of a portion of the tax. It is seen that the appeal had been preferred in April, 2022. It will be onerous to burden the petitioner with a condition of paying a portion of a tax in a case which necessarily has to be categorised under the high pitched category going by the decisions referred to above, particularly since the appeal has been pending for almost nine months. Writ petition is disposed of directing the petitioner to approach the concerned Assessing Authority for opening the portal for preferring a stay application and a stay application shall be preferred within two weeks from today.

Summary

Issues:
1. Challenge to assessment order and demand for payment
2. Best judgment assessment and high pitched income determination
3. Direction to Appellate Authority regarding appeal and payment

Analysis:
1. The petitioner challenged an assessment order and demand for payment by filing an appeal and a stay application. The petitioner sought direction for the Appellate Authority to consider the appeal without insisting on the payment directed by the Assessment Officer. The petitioner argued that the assessment resulted in a significant increase in income, which was deemed high pitched, citing legal precedents to support the contention.

2. The Court considered the substantial difference between the returned income and the assessed income, which was 71 times higher. Referring to the Delhi High Court's guidelines, the Court agreed that the assessment fell under the category of high pitched income. The petitioner's counsel emphasized that the Appellate Authority should hear the appeal without requiring immediate payment, while the Department suggested a conditional disposal based on partial tax payment.

3. After evaluating the arguments, the Court noted the prolonged pendency of the appeal since April 2022 and the burden it would impose on the petitioner to make a partial tax payment given the high pitched nature of the assessment. Consequently, the Court directed the petitioner to file a stay application within two weeks, and the Appellate Authority was instructed to consider the appeal and stay application promptly. The Court mandated that coercive measures be suspended until the Appellate Authority made a decision in line with the legal principles discussed during the case.

In conclusion, the Court disposed of the writ petition by providing specific directions to the petitioner and the Appellate Authority regarding the stay application, appeal consideration, and the assessment of high pitched income, ensuring a fair and just process in light of the legal precedents cited during the proceedings.