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TMI Blog2015 (12) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... r that these are purely prima facie observations and certainly not meant to disturb or dislodge the order of assessment or in any manner influence the appellate proceedings. Nevertheless, we cannot escape the conclusion that the petitioner has made out a strong prima facie case against the order of assessment in which as noted, the sole addition is on the basis of rejection of petitioner's claim for deduction under section 80IB(10) of the Act. Pending appeal before the Commissioner(Appeals) therefore, there shall be stay against further recovery of the tax demand arising out of such order of assessment. However, amount of ₹ 20.05 lacs (rounded off) already recovered by the department would not be returned at this stage, and would be adjusted eventually upon the Commissioner (Appeals) deciding the appeal of the petitioner. - Special Civil Application No. 12831 of 2015 - - - Dated:- 8-12-2015 - Akil Kureshi And Mohinder Pal, JJ. For the Appellant : B S Soparkar, Adv For the Respondent : Sudhir M Mehta, Adv ORDER ( Per : Honourable Mr. Justice Akil Kureshi ) 1. The petitioner assessee has challenged recovery notice dated 30.3.2015 as at AnnexureA t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (rounded off) may not be made till the disposal of the appeal of the assessee by the Commissioner. It was further prayed that if by chance such request is not granted, the assessee may be allowed atleast seven days time before taking any action for recovery of such amount to enable the assessee to approach higher authorities for stay. 6. On 15.6.2015, the Assessing Officer while disposing of such application of the petitioner, required the petitioner to deposit 50% of the outstanding demand by 24.6.2015 upon which the recovery of remaining 50% would stand stayed. The Assessing Officer observed as under : 2. I have perused your application for stay demand till the decision of first appeal. Further, mere filing of appeal or an application for stay in such an appeal will not ipso factor grant stay of furtherer proceedings in a tax recovery mater, as held by the Jurisdictional High Court in the case of Vkrambhai Punjabhai Palkiwala vs. S.M. Ajbani, Recovery Officer (1990) 182 ITR 413 (GUJ). As per Instruction No.1914 dated 02/12/1993, the demand is to be stayed only if there is valid reason for doing so and mere filing of appeal is not a sufficient ground for stay of demand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould operate in which case the assessee had suffered loss during the year under consideration. It was therefore, that originally no claim for deduction under section 80IB(10) of the Act was made. However, only later on when due to revision of the closing stock valuation, need for claiming deduction under section 80IB(10) of the Act arose which was made in the revised returns. He therefore, submitted that exfacie the order of assessment was bad in law. In view of such strong prima facie case in favour of the petitioner, the entire demand should have been stayed pending appeal. The Assessing Officer having rejected the request for stay by a non speaking order, proceeded to carry out coercive recovery through attachment of the bank account of the petitioner even before the Joint Commissioner had decided the stay petition of the assessee. Counsel relied on the following decision to contend that in view of such wholesale additions and mechanical manner of rejection of stay petition by the Assessing Officer, entire demand be stayed pending appeal and amount of recovery already made be refunded : 1) Lalit Wadhwa v. Commissioner of Incometax, Gurgaon reported in (2013) 29 taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. Firstly, it was requested that in view of the discrepancies in the assessment order, entire recovery be stayed. Second prayer was that if this was not possible, the assessee may be given seven days time to appeal to higher authorities for such stay. The Assessing Officer disposed of such request by insisting that the Page 7 of 11 HC-NIC Page 7 of 11 Created On Fri Dec 11 14:26:42 IST 2015 petitioner must deposit 50% of the tax dues to be able to avoid recovery of remaining 50%. 13. If one peruses the order of assessment in question, in the original return that the petitioner filed for the assessment year 20122013, the closing stock was valued at ₹ 10.91 crores and the assessee had shown loss of ₹ 2.05 lacs. The assessee however, filed a revised return on 30.3.2015 and as noted, made three significant changes. Namely, closing stock was now valued at ₹ 30.30 crores, profit was disclosed at ₹ 19.33 corres and deduction under section 80IB(10) which was previously not claimed was now introduced. This return the Assessing Officer processed and questioned the method of valuation of closing stock on account of which such valuation jumped to ₹ 30.30 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim for deduction under section 80IB(10) of the Act interalia on the ground that only to avoid minimum alternative tax liability for the later years, such claim is being advanced. In isolation, perhaps this assessment of the Assessing Officer of the situation may have been justified but when the Assessing Officer rejected the very valuation of the closing stock, we wonder whether it was even open for her to process the assessee's claim for deduction under section 80IB(10) of the Act. Prima facie, these aspects are incongruent. We make it however, clear that these are purely prima facie observations and certainly not meant to disturb or dislodge the order of assessment or in any manner influence the appellate proceedings. 15. Nevertheless, we cannot escape the conclusion that the petitioner has made out a strong prima facie case against the order of assessment in which as noted, the sole addition is on the basis of rejection of petitioner's claim for deduction under section 80IB(10) of the Act. 16. Pending appeal before the Commissioner(Appeals) therefore, there shall be stay against further recovery of the tax demand arising out of such order of assessment. However, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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