9911796707
TMI Blog2013 (2) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... .2.05 crores and an order dated 2 January 2013 of the Commissioner of Income Tax-2, Mumbai rejecting an application for stay of demand pending disposal of the appeal. 2. These proceedings relate to A.Y.2004-05 in respect of which a penalty has been imposed by the Assessing Officer under Section 271(1) (c) of the Income Tax Act, 1961 in the amount of Rs.2.05 crores by an order dated 30 March 2012. 3. Briefly stated, the Petitioner is a joint venture company between Mastek Limited and Deloitte Consulting LLP in pursuance of a joint venture agreement dated 18 July 2001. During the previous year relevant to A.Y.2004-05, the Petitioner claims to have rendered software development and IT related services to Deloitte, for which a consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3)(iii) determining a total income of Rs.6.41 crores after making an adjustment in terms of the findings of TPO, in the amount of Rs.5.86 crores to the the total income returned by the Petitioner. Following this, a notice was issued under section 271(1) (c) on 15 December 2006. 5. The Petitioner filed an appeal before the Commissioner of Income Tax (Appeals). The appeal was dismissed on 24 January 2011. Following a fresh notice under section 271(1)(c), an order was passed on 30 March 2012 imposing a penalty of Rs.2.05 crores. The quantum appeal was in the meantime also dismissed by the Tribunal on 30 March 2012. Against the order of the Tribunal, the Petitioner has filed an appeal before this Court which is pending admission. 6. An appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantum proceedings, would not justify the imposition of a penalty unless the requirements of Section 271(1)(c) are fulfilled; (iii) Neither of the orders disposing of the application for stay of demand contains a prima facie evaluation of the merits of the case. The assessing officer under Section 220(6) is duty bound while exercising his discretion to apply his mind prima facie before deciding whether to grant a stay of demand and if so subject to such conditions as may be prescribed. Similarly, it was submitted that the CIT (2) has also failed to even prima facie evaluate the case. 8. On the other hand, it was urged on behalf of Revenue that the fact that the Petitioner had filed a revised return of income tax, withdrawing the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to impose in the circumstances of the case to treat the assessee as not being default in respect of the amount in dispute in the appeal. When the statute confers a discretion on the assessing officer, that is a discretion which is wielded in the exercise of a quasi-judicial function. Assessing officers, as the Court repeatedly finds in several cases, reject stay applications in a cavalier fashion by making a bald statement to the effect that 'looking to the facts and circumstances of the case', no case for stay has been made out. This, in our view, does not amount to a valid or proper exercise of discretion. What is expected of an assessing officer is at least a brief statement in the order of the reasons on the basis of which he formed h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate order for partial deposit of the penalty would be necessitated. An order for the deposit of the entire penalty is clearly not justified having regard, prima facie to the nature of the issues and the submissions which have been urged. We are refraining from making anything more than a prima facie observation at this stage so as to not to foreclose the determination of the appeal by the appellate authority against the order of penalty. 12. Accordingly, we dispose of the petition by directing that the Petitioner shall deposit an amount of Rs. Fifty lakhs in two installments each of Rs. Twenty five lakhs to be paid on or before 28 February 2013 and 31 March 2013. Conditional on the aforesaid payments, there shall be a stay of recover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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