Flipkart India (P.) Ltd. v. Asstt. CIT

INCOME TAX ACT, 1961

--Recovery--Stay of demandPlea of financial hardship----Since Principal Commissioner had failed to consider the issue whether the assessment order suffers from being 'unreasonably highpitched', or whether 'any genuine hardship would be caused to the assessee' who was required to deposit 15 per cent of the disputed demand amount said order passed was legally unsustainable.--Assessee entered into the E-Commerce sector. It incurred losses from inception of its business till current assessment year as it was selling the goods at prices lower than the purchase price in order to enter and secure a market. In scrutiny assessment, AO made certain additions and raised tax demand. Assessee disputed said tax demand and for keeping the demand in abeyance and with the plea of financial hardship it filed application before Assistant Commissioner who although directed to deposit 15% of disputed demand. It filed review petition before Principal Commissioner, which was rejected.Held: Since assessee had been constantly claiming that it has suffered loss from the very inception of its business, AO was required to do was to elaborately discuss as to whether 'genuine hardship' would be caused to the assessee in case it was directed to pay 15 per cent of the disputed demand amount or not? Yet AO had failed to do so therefore, this part of the order, naturally, suffers from being a non-speaking order. Hence, was legally unsustainable. Further, Principal Commissioner had failed to consider the issue whether the assessment order suffers from being 'unreasonably highpitched', or whether 'any genuine hardship would be caused to the assessee' in case the assessee were required to deposit 15 per cent of the disputed demand amount or not?. Hence, impugned order passed was legally unsustainable.