2024 (11) TMI 174 - HC - Income Tax

Stay of demand - Undertaking by the Petitioner to pay 20% of the amount due for pending appeal proceedings - HELD THAT - Petitioner had approached the authorities under Section 226(6) of the Income Tax Act, 1961 which was rejected vide proceedings dated 24.02.2022. It appears that for the Assessment Year 2018-2019, the Petitioner has paid a paltry amount of Rs. 54,794/- only. The Petitioner cannot expect the appeal to be heard without mandatory pre-deposit of the amount as is required as per the Office Memorandum issued by the Central Board of Direct Taxes issued from time to time. Unless the Petitioner pre-deposits the amount the Petitioner cannot expect any protection from recovery of tax dues confirmed against the Petitioner. Under these circumstances, these Writ Petitions are dismissed. However liberty is given to the Petitioner to move suitable application for waiver in terms of the decision of the Hon'ble Supreme Court in Principal Commissioner of Income Tax 5 and Others vs. M/s.LG Electronics India Private Limited 2018 (7) TMI 1905 - SC ORDER .

Summary

Issues:
1. Assessment order for the Assessment Year 2018-2019 under Section 143(3) of the Income Tax Act, 1961.
2. Adverse Assessment Orders for other Assessment Years and appeals filed.
3. Undertaking by the Petitioner to pay 20% of the amount due for pending appeal proceedings.
4. Rejection of the Petitioner's application under Section 226(6) of the Income Tax Act, 1961.
5. Petitioner's minimal payment for the Assessment Year 2018-2019.
6. Requirement of mandatory pre-deposit for appeal hearing.
7. Dismissal of the Writ Petitions with liberty to apply for waiver.

Analysis:
1. The judgment pertains to two writ petitions concerning an Assessment Order passed for the Assessment Year 2018-2019 under Section 143(3) of the Income Tax Act, 1961. The assessed amount payable by the Petitioner was Rs. 34,92,30,530.

2. The Petitioner had faced adverse Assessment Orders for other Assessment Years as well, namely 2013-2014 and 2014-2015, leading to appeals filed before the CIT (Appeal) or ITAT. The Petitioner provided an undertaking on 24.02.2022 to pay 20% of the outstanding amount as per the Circular of the Central Board of Direct Taxes to halt further proceedings until the appeal's disposal.

3. Despite the Petitioner's application under Section 226(6) of the Income Tax Act, 1961 being rejected on 24.02.2022, the Petitioner made a minimal payment of only Rs. 54,794 for the Assessment Year 2018-2019. The judgment emphasizes the necessity of mandatory pre-deposit as per the Central Board of Direct Taxes' Office Memorandum to secure protection from tax dues recovery.

4. Consequently, the Court dismissed the Writ Petitions due to the Petitioner's failure to comply with the pre-deposit requirement. However, the Petitioner was granted liberty to seek a waiver, citing the decision of the Hon'ble Supreme Court in a specific case. The judgment concluded by closing the connected Miscellaneous Petitions without imposing any costs on the parties involved.