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TMI Blog2024 (5) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... that the OM applies only upto the stage of the appeal pending before the CIT(A) and being of little significance when it comes to the ITAT. Though some of the decisions noticed by us hereinabove pertained to pre-deposit prescriptions placed by a statute, the principles enunciated therein would clearly be of relevance while examining the extent of the power that stands placed in the hands of the AO in terms of Section 220(6) of the Act. In our considered opinion, the respondents have clearly erred in proceeding on the assumption that the application for consideration of outstanding demands being placed in abeyance could not have even been entertained without a 20% pre-deposit. The aforesaid stand as taken is thoroughly misconceived and wholly untenable in law. Thus we find no merit in the challenge which stands raised. - HON'BLE MR. JUSTICE YASHWANT VARMA And HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV For the Petitioner : Mr. Rohit Sharma, Mr. Nikhil Purohit and Mr. Jatin Lalwani, Advs For the Respondent : Mr. Abhishek Maratha, Sr.SC with Mr. Nupur Sharma, Mr. Parth Semwal and Mr. Apoorv Agarwal, Advs ORDER 1. This writ petition is directed again the order dated 05 Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,275/- without any provision of services. Then to explain the incongruency, Assessee has made this story that his brother gave services. It is not understandable that how come, payments need to be made to a completely different person. Further, it is pertinent to mention here that the assessee has even deducted Taxes at Source in the name of Sh. Anup Chakraborty and not in the name of Sh. Amit Chakraborty who has (according to the argument of the Assessee) provided services to them. Further, the circumstantial evidences also do not corroborate the argument of the assessee. The person in question is living in a metro and it is not the case of a migrant labor/poor person where the payment may be made to his family living in a remote area or inaccessible area with the perspective of access to Banking services or for some other issue. Accordingly, the argument of Assessee is rejected 10. Accordingly, the writ petition is dismissed. However, this Court clarifies that the findings given by this Court are only in the context of the present writ proceedings and shall not prejudice either of the parties at the stage of the appellate proceedings. 4. Learned counsel appearing for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded in Paragraph 8 as follows:- 8. Keeping in view the aforesaid findings, this Court is of the view that the petitioner has not been able to make out a prima facie case in its favour. To put it mildly, the petitioner has a 'lot to answer' in the appeal . 29. The question of financial stringency was also examined by the Hon'ble High Court and the financials of the Applicant were not found to be inspiring confidence. As a matter of fact, the findings of the learned Assessing Officer now stand sustained and further reasoned by the Order of the learned CIT(A) in the first appellate proceedings. 30. Since there is no prima facie case, the balance of convenience in no way comes to assist the applicant assessee. On the contrary, when substantial receipts are from the Foreign Body only, and assessee is no having any other source of prospective earnings to ensure payments of demands if being unsuccessful, here, the Revenue is justified in initiating recovery proceedings. We find no malice in the action of the ld. AO in that regard. 31. Considering the entirety of facts and circumstances, we do not find any justification to interefere with the impugned recovery proceedings. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has argued before us that the administrative circular will not operate as a fetter on the Commissioner since it is a quasi-judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal. 3. The appeal is disposed of accordingly. Pending application, if any, shall stand disposed of. 14. As is manifest from the order passed by the Supreme Court in Principal Commissioner of Income Tax Ors. vs LG Electronics India Pvt. Ltd., it had been emphasized that the administrative circular would not operate as a fetter upon the power otherwise conferred on a quasi-judicial authority and that it would be wholly incorrect to view the OM as mandating the deposit of 20%, irrespective of the facts of an individual case. This would also flow from the clear and express language employed in sub-section (6) of Section 220 which speaks of the Assessing Officer being empowered in his discretion and subject to such conditions as he may think fit to impose in the circumstances of the case . The discretion thus vested in the hands of the AO is one which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fering or consenting to deposit 20% of the outstanding liability. Ultimately, it is for the authorities to examine and consider what amount would be sufficient to securitise the interest of the Revenue and thus a just balance being struck. The quantum of the deposit that would be required to be made would ultimately depend upon the facts and circumstances of each case. 23. The position which thus emerges is that while 20% is not liable to be viewed as an entrenched or inflexible rule, there could be circumstances where the respondents may be justified in seeking a deposit in excess of the above dependent upon the facts and circumstances that may obtain. This would have to necessarily be left to the sound exercise of discretion by the respondents based upon a consideration of issues such as prima facie, financial hardship and the likelihood of success. This observation we render being conscious of the indisputable position that the OM applies only upto the stage of the appeal pending before the CIT(A) and being of little significance when it comes to the ITAT. 17. As explained in Indian National Congress, the 20% which is spoken of in the OM cannot possibly be viewed as being an inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be 'undue' it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. 15. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority must exercise its discretion to dispense with such requirement particularly in a case where the appellant satisfies the authority concerned that its case is squarely covered by the decision of a competent Court binding on it. In such an eventuality, asking the appellant to deposit the duty demanded and penalty levied would undoubtedly cause undue hardship to the appellant. While deciding the said case, Calcutta High Court placed reliance upon the judgment of the Hon'ble Apex Court in L. Hirday Narain v. Income-Tax Officer, Bareilly, (1970) 2 SCC 355 : AIR 1971 SC 33, wherein the Court observed as under:- If a statute invests a public officer with authority to do an act in a specified set of circumstances, it is imperative upon him to exercise his authority in a manner appropriate to the case when a party interested and having a right to apply moved in that behalf and circumstances for exercise of authority are shown to exist. Even if the words used in the statute prima facie enabling, the courts will readily infer a duty to exercise power which is invested in aid of enforcement of a right-public or private-of a citizen. 24. Thus, even where enabling or discretionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to undue hardship. 28. In Hoogly Mills Co. Ltd. v. Union of India, 1999 (108) E.L.T. 637, the Calcutta High Court again reiterated the view that if the appellant has a strong prima facie case, he is entitled of waiving the pre-deposit condition and in case the Appellate Authority insists to deposit the amount so assessed or penalty so levied, it will cause undue hardship to the assessee. While considering the said case, the Court placed reliance upon the large number of judgments including Tata Iron Steel Co. Ltd. v. Commissioner (Appeals), Central Excise, 1998 (98) E.L.T. 50; Hari Fertilizer v. Union of India, 1985 (22) E.L.T. 301 (All.); Re. American Refrigeration Co. Ltd., 1986 (23) E.L.T. 74; and V.I.T. Sea Foods v. Collector of Customs, 1989 (42) E.L.T. 220 (Ker.), wherein the Courts had expressed the similar view. 29. In I.T.C. Ltd. v. Commissioner of Central Excise and Customs (Appeals)ILR 2000 KAR 25, while examining the issue of pre- deposit under Section 35 of the Act, after considering a large number of judgments of the Apex Court and various High Courts, it was held as under: While considering the case of undue hardship , the authority is required to examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application. The order of the Appellate Authority itself must show that it had applied its mind to the issue raised by the appellant and it has been considered in accordance with the law. The expression undue hardship has a wider connotation as it takes within its ambit the case where the assessee is asked to deposit the amount even if he is likely to exonerate from the total liability on disposal of his appeal. Dispensation of deposit should also be allowed where two views are possible. While considering the application for interim relief, the Court must examine all pros and cons involved in the case and further examine that in case recovery is not stayed, the right of appeal conferred by the legislature and refusal to exercise the discretionary power by the authority to stay/waive the predeposit condition, would be reduced to nugatory/illusory. Undoubtedly, the interest of the Revenue cannot be jeopardized but that does not mean that in order to protect the interest of the Revenue, the Court or authority should exercise its duty under the law to take into consideration the rights and interest of an individual. It is also clear that before any goods could be subjected to duty, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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