IN THE ITAT HYDERABAD BENCH ‘A’
Capital IQ Information Systems India (P.) Ltd.
versus
Assistant Commissioner of Income-tax, Cir. 1(2), Hyderabad
IT APPEAL NO. 1961 (HYD.) OF 2011
STAY APPLICATION NO. 96 (HYD.) OF 2012
[ASSESSMENT YEAR 2007-08]
JUNE 15, 2012
ORDER
D. Karunakara Rao, Accountant Member
By this application, assessee seeks stay of recovery of outstanding demand pending hearing and disposal of its appeal ITA No. 1961/Hyd/2011 for assessment year 2007-08 by this Tribunal.
2. Briefly stated, facts leading to the filing of the present application are that the assessee is engaged in Information Technology enabled services and business support services to the parent company. Assessment for the year under appeal, was completed invoking the provisions relating to the Transfer Pricing, under S. 143(3) of the Act read with S. 144C of the Act, determining the income of the assessee at Rs. 14.49 crores, as against returned income of Rs. 8.29 crores. The assessing officer raised the demand of Rs. 3,30,51,041 which includes tax component of Rs. 1,97,86,736 and interest segment of Rs. 1,32,74,305.
3. During the proceedings before us, learned counsel for the assessee filed a copy of the notice under S. 226(3) dated 6.6.2012 regarding the attachment of the bank of account of the assessee with Oriental Bank of Commerce, Ameerpet Branch, Hyderabad. Learned counsel mentioned that such attachment made by the assessing officer when the assessee’s application for stay of recovery is still pending, is not proper. Learned counsel attempted to highlight the high handed approach of the officer. Further, learned counsel mentioned that the demand raised is so huge that the assessment order falls in the category of high pitched assessment as the assessed income is almost twice that of the returned income. Learned counsel took us through the instructions of the CBDT, at page 23 of the paper-book, setting out the circumstances in which recovery proceedings cannot be initiated by the assessing officer. He mentioned that when the assessment order is not a speaking one, notwithstanding the financial soundness of the assessee, stay must be granted as per para 2 of the said circular.
4. Assessee’s counsel took objection to the manner in which the provisions of S. 220(6) were invoked in this case, without taking any decision on the stay application of the assessee pending before the assessing officer. It is unfortunate, according to the learned counsel, that the Revenue authorities did not bother to inform the assessee about the fact of attachment on the bank account of the assessee, which in fact, has ultimately been informed to the assessee by the bank.
5. Learned counsel for the assessee relied on a number of decisions, wherein considering the high pitch assessments made determining the income of the concerned assessees have been determined in multiples of the returned incomes, stay of recovery of outstanding demand has been justified, which may be tabulated hereunder-
