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TMI Blog2019 (5) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... plication shall be disposed of within two weeks from 02.04.2019, i.e on or before 16.04.2019. It is brought to our attention that, subsequent to the passing of the impugned order, notices under Section 226(3) of the Income Tax Act, 1961 have been issued to Karur Vysya Bank, Valasaravakkam Branch, Axis Bank, Virugambakkam Branch, City Union Bank, Mandaveli Branch, HDFC Bank, Saligramam Branch, Indian Bank, Ayanavaram and Perambur Branches, all dated 06.03.2019 attaching the accounts of the petitioner therein. The attachments will continue, subject to the orders passed by the 2nd respondent in the stay application and the Banks shall not appropriate any balance until orders are passed in the stay application. Status quo, as on date to be maintained in regard to further recovery, till 16.04.2019 or date of order to be passed in the stay application, whichever is earlier. - W.P. Nos.7534 And 7552 of 2019 And W.M.P. Nos.8193, 8198, 8202, 8205 And 8207 of 2019 - - - Dated:- 28-3-2019 - Dr. Justice Anita Sumanth For the Petitioner : Mr.R.Sivaraman for Mr.S.Veeraraghavan in both writ petitions For the Respondents : Mr.A.P.Srinivas Standing Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer is expected, while disposing of a stay application, to go into the existence of a prima facie case, financial stringency faced by the assessee and the balance of convenience in the matter, before coming to a conclusion on the grant of stay on otherwise or the terms to which the assessee is to be put, while granting conditional stay. In the present case, discussion upon the aforesaid factors are conspicuous by their absence. 6. I have had occasion to deal with similar matters, where Assessing Officer have passed cryptic orders while disposing of stay applications and I extract the text of one of my orders in the case of Kannammal v. Income Tax Officer in W.P.No.3849 of 2019, which would be equally applicable to the facts and circumstances of the present case. '7. The parameters to be taken into account in considering the grant of stay of disputed demand are well settled the existence of a prima facie case, financial stringency and the balance of convenience. Financial stringency would include within its ambit the question of 'irreparable injury' and undue hardship as well. It is only upon an application of the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below : A. Responsibility: i. It shall be the responsibility of the Assessing Officer and the TRO to collect every demand that has been raised, except the following: (a) Demand which has not fallen due;(b) Demand which has been stayed by a Court or ITAT or Settlement Commission;(c) Demand for which a proper proposal for write-off has been submitted;(d) Demand stayed in accordance with paras B C below. ii. Where demand in respect of which a recovery certificate has been issued or a statement has been drawn, the primary responsibility for the collection of tax shall rest with the TRO. iii. It would be the responsibility of the supervisory authorities to ensure that the Assessing Officers and the TROs take all such measures as are necessary to collect the demand. It must be understood that mere issue of a show cause notice with no follow-up is not to be regarded as adequate effort to recover taxes. B. Stay Petitions: i. Stay petitions filed with the Assessing Officers must be disposed of within two weeks of the filing of petition by the tax- payer. The assessee must be intimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooperated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; e. reserve a right to adjust refunds arising, if any, against the demand. iii. Payment by instalments may be liberally allowed so as to collect the entire demand within a reasonable period not exceeding 18 months. iv. Since the phrase stay of demand does not occur in section 220(6) of the Income-tax Act, the Assessing Officer should always use in any order passed under section 220(6) [or under section 220(3) or section 220(7)], the expression that occurs in the section viz., that he agrees to treat the assessee as not being default in respect of the amount specified, subject to such conditions as he deems fit to impose. v. While considering an application under section 220(6), the Assessing Officer should consider all relevant factors having a bearing on the demand raised and communicate his decision in the form of a speaking order. D. Miscellaneous: i. Even where recovery of demand has been stayed, the Assessing Officer will continue to review the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.) or, (b) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/ CIT, who after considering all relevant facts shall decide the quantum/ proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand.' 11. Instruction 1914 was further modified by Office Memorandum bearing number F.No.404/72/93 ITCC dated 31.07 2017 as follows: 'OFFICE MEMORANDUM F. No. 404/72/93-ITCC dated 31.07.2017 Subject: Partial modification of Instruction No. 1914 dated 21.3.1996 to provide for guidelines for stay of demand at the first appeal stage. Reference: Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon to remit 20% of the disputed demand, granted ample discretion to the authority to either increase or decrease the quantum demanded based on the three vital factors to be taken into consideration.' 7. In the light of observations in the case of Kannammal as extracted above and seeing as the impugned order in the present case is also bereft of reasoning, I am constrained to set aside the same. 8.The petitioner will appear before the respondent Assessing Officer on 02.04.2019 along with copy of his stay application as well as all materials in support of the request for stay and the application shall be disposed of within two weeks from 02.04.2019, i.e on or before 16.04.2019. It is brought to my attention that, subsequent to the passing of the impugned order, notices under Section 226(3) of the Income Tax Act, 1961 have been issued to Karur Vysya Bank, Valasaravakkam Branch, Axis Bank, Virugambakkam Branch, City Union Bank, Mandaveli Branch, HDFC Bank, Saligramam Branch, Indian Bank, Ayanavaram and Perambur Branches, all dated 06.03.2019 attaching the accounts of the petitioner therein. The attachments will continue, subject to the orders pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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