Expeditors International of Washingtion Vs ACIT (Delhi High Court)
The writ petition challenged an order dated 14 July 2022 passed under Section 254 of the Income Tax Act directing the petitioner to deposit ₹5 crore against outstanding demand for Assessment Year 2018-19. The petitioner argued that the direction was arbitrary because the underlying additions had already been decided in its favour by the Tribunal in the preceding seven assessment years. The Respondents contended that grant of stay requires not only a prima facie case but also satisfaction regarding balance of convenience and irreparable loss, relying on the Supreme Court’s decision in Dunlop India Ltd.
The Court noted that it was undisputed that the additions in question had been consistently decided in favour of the petitioner for several years. It also referred to CBDT Instruction No. 1914 dated 2 February 1993, which provides that complete stay may be granted when the disputed demand relates to issues previously decided in favour of the assessee. The Court further observed that its earlier decisions have held that recovery of demand on issues already settled in favour of an assessee is unwarranted.
Accordingly, the Court set aside the requirement to deposit ₹5 crore and directed the Tribunal to hear the matter expeditiously. The writ petition was disposed of.
