Case Law Details

Case Name : Deloittee Consulting India Pvt.Ltd. Vs The Assistant Commissioner of Income Tax (Bombay High Court)
Appeal Number : Writ Petition (L)no.235 of 2014
Date of Judgement/Order : 12/02/2014
Related Assessment Year :
Courts : All High Courts (4597) Bombay High Court (848)

Having heard the learned counsel for the parties, we find that the impugned order of the Tribunal has been passed in total disregard of the principles laid down in KEC International Ltd. Vs. B.R.Balakrishnan and others {(2001)251-ITR-158 (Bom)} wherein a Division Bench of this Court laid down the following parameters to be observed by the Authorities while considering the stay application :

“5. … … … Parameters :

a. While considering the stay application, the authority concerned will at least briefly set out the case of the assessee;

b. In cases where the assessed income under the impugned order far exceeds returned income, the authority will consider whether the assessee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given by the authority in its order;

c. In cases where the assessee relies upon financial difficulties, the authority concerned can briefly indicate whether the assessee is financially sould and viable to deposit the amount if the authority wants the assessee to so deposit;

d. The authority concerned will also examine whether the time to prefer an appeal has expired. Generally, coercive measures may not be adopted during the period provided by the statue to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is like to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order; and

e. We clarify that if the authority concerned complies with the above parameters while passing orders on the stay application, then the authorities on the administrative side of the Department like respondent no.2 herein need not once again give reasoned order.”

11. Instead of giving some short prima facie reasons recording the Petitioner’s case, the Tribunal has merely observed as under :

“6. … … … The learned counsel for the assessee no doubt has made an attempt to show that the assessee has a good prima facie case to succeed on merit in its appeal filed before the Tribunal. However, this matter can be decided finally only after hearing both the sides while disposing of the appeals of the assessee by the Tribunal. … … …”

Having heard learned counsel for the parties, we find that the Petitioner has a strong prima facie case on merits before the Tribunal. Thus, having regard to the fact that the Petitioner has already paid the full tax amount and also approximately 25% of the penalty amount earlier, the Tribunal ought not to have required the Petitioner to deposit a further sum of Rs.50.00 lakhs. In fact, the Tribunal while passing the impugned order has not only ignored the directions in KEC (supra) but also the observations made by this Court in the order dated 30 January 2013 in the petitioner’s own case.

In view of the above discussion, the writ petition is allowed and the impugned order dated 3 January 2014 passed by the ITAT for the A.Y.2004-05 is set aside only to the extent it directs the petitioner to deposit a further amount of Rs.50 lakhs. The other directions contained in the impugned order dated 3 January 2014 are not disturbed. The writ petition is accordingly allowed to the above extent.

Also View Tribunal Judgment in above case – Rejection of stay application merely because it will not cause any genuine hardship to assessee

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