Case Law Details
Shri Dalpatsinh Ukabhai Vasava Vs Pr. CIT (Gujarat High Court)
While praying for stay of demand raised pursuant to the order under Section 143(3) of the Act, the writ-applicant contended that the case was one of high pitched assessment. The writ-applicant also pointed out his poor financial condition. The writ-applicant submitted before the Income Tax Officer that even the deposit of 20% of the total amount was beyond his financial capacity.
On the other hand, this petition has been vehemently opposed by Mr.Varun Patel, the learned counsel appearing for the Revenue. Mr.Patel submitted that no error, not to speak of any error of law, could be said to have been committed by the authority in asking the writ-applicant to deposit 20% of the assessed amount. The impugned order is discretionary in nature and, therefore, this Court may not disturb the same in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India.
The issue of granting stay pending appeal is governed principally by the two circulars issued by the CBDT. The first circular was issued way back on 2nd February 1993 being instructions no.1914. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in super-session of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof. The preamble of these instructions provide that in order to streamline the process of grant of stay of standardization of quantum of lump-sum payment to be made as a pre-condition for stay of demand of dispute before the Commissioner of Income Tax (Appeals), such modified guidelines were being issued.
This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly.
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