INCOME TAX ACT, 1961

Article 226 Section 68 Section 220

Writ - Recovery - Loan depositors alleged not genuine -

Petitioner states that respondents had failed to appreciate that assessment Order, dated 29-12-2019 had been made on a 'high pitched basis' and therefore, recovery and collection of tax had to be held in abeyance till the disposal of appeal against the assessment order. Assessee argued that respondents No. 2 and 4 erroneously assumed that the pre-deposit of twenty per cent of the outstanding amount was mandatorily required in view of the instructions and office memorandum issued by CBDT, dated 2-12-1993, modified by Office Memorandum (OM), dated 29-2-2016 and 31-7-2017. In view of financial stringency faced by an assessee and the balance of convenience in the matter constitute trinity and are indispensable consideration for adjudicating stay applications.Held: This Court was of the view that the present case involves interpretation of section 68. The present matter was not a case of mechanical reliance on circulars/office memorandums. It was a case where proof of identity of the loan depositors, capacity of the creditors to advance loans and genuineness of transaction was in serious dispute. Further, this Court finds that the stay application had been decided on merits and all the submissions made by the petitioner had been considered by the statutory authorities below. Undoubtedly, as held by the Supreme Court in LG Electronics (India) Pvt. Ltd., it is open to the statutory authorities to grant relief to deposit an amount lesser than twenty per cent if the facts of the case so warrant. However, on the facts of the present case, as determined by the AO, a prima facie case was not made out and such a relief was not warranted. Consequently, the present writ petition and application being bereft of merits were dismissed.

Relied:Pr. CIT v. L.G. Electronics (India) (P) Ltd. [Civil Appeal No. 6850/(2018) : 2018 TAxPub(DT) 5102 (SC).

REFERRED :

FAVOUR : Against the petitioner.

A.Y. :

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