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TMI Blog2014 (5) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... sus BR. Balakrishnan And Others [2001 (3) TMI 32 - BOMBAY High Court] – the matter is required to be remitted back to the CIT to pass a speaking and reasoned order – Demand arising out of the order of the penalty order of the FAA, is stayed - Decided in favour of Assessee. - S. A. No. 132/Mum/2014-Arising out of ITA No. 1239/Mum/2014 - - - Dated:- 9-5-2014 - Sh. Vijay Pal Rao And Rajendra,JJ. For the Appellant : Shri Bharat M. Pathak For the Respondent : Smt. Parminder Kaur ORDER Per Rajendra, A. M. Vide its application dated 16. 04. 2014 assessee-firm has requested for staying the demand of Rs. 46. 72 lakhs out of which Rs. 2. 50 lakhs have already been paid. Application of the assessee is accompanied by an af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee under the head foreign exchange forward contract cancellation charges , that he enhanced the income of the assessee by Rs. 1, 37, 48, 098/-(Rs. 2, 00, 60, 098/-less Rs. 63, 22, 000/-)on the reasoning that the loss claimed was on account of cancellation of forward contract in foreign exchange during the year was not for the regular business or for hedging the loss against fluctuation, that he treated the business loss as Speculation loss, that FAA also initiated penalty proceedings u/s. 271(1)(c)of the Act, that vide his order dated 13. 01. 2014, he levied penalty of Rs 46, 72, 978/-, that the assessee has challenged the order of the FAA imposing penalty before the Tribuanl, that the assessee approached the CIT-16 Mumbai for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at AO had made addition/disallowances while computing the income of the assessee and both were deleted by the FAA, that FAA enhanced the income of the assessee after issuing notice u/s. 251(2)of the Act, that FAA also levied penalty u/s. 271(1)(c)of the Act, that the assessee approached the CIT-16 for staying the demand that had arisen because of the penalty order of the FAA, that the request made by the assessee was rejected by the CIT. We find that the CIT did not entertain the petition of the assessee as he was of the opinion that the petitioner s first appeal had been disposed off by the CIT(A) and the matter was pending in appeal before ITAT. He further mentioned that he did not have legal authority u/s 220(6) to entertain the stay pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had filed an appeal against the assessment order(emphasis supplied) was against the spirit of the statute. Similarly, in the matter of KEC International Ltd. (251ITR158)Hon ble Bombay High Court has laid down the following parameters, to be complied with by the authorities while passing orders on stay applications filed pending appeals to the first appellate authority : (i) The authority has to at least set out the case of the assessee briefly. (ii) If the assessed income is higher than the returned income the authority has to consider whether the assessee has made out a case for unconditional stay. If not whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited, for which rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case as to whether the demand is to be stayed or whether and what condition is to be imposed. Such a question can be decided only after opportunity is given to the assessee, who will be affected by any order that might be passed under section 220(6). Therefore, the giving of opportunity is implicit under the said provision. We find that order of the CIT-16 is silent about the opportunity given to the assessee, before an adverse view was taken against it. Even if he had heard the assessee the fact is not apparent from the order. Courts are of the opinion that while deciding the stay applications adjudicating authorities should consider whether the case of the assessee is prima facie sustainable or not. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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