INCOME TAX ACT, 1961

Section 226

Recovery - Stay on demand - Assessee had already paid his entire tax liability - Considering COVID-19 pandemic situation, stay grated for interest and consequencial levies

Assessee was engaged as a civil contractor and builder. Its assessment was reopened and on account of bogus purchases, AO made additions. During pendency of appeals all bank accounts and debtors of assessee were attached. Held: As all of us are traversing through one of toughest patch of time, facing Covid-19 pandemic and poorer sections of society are hardest hit, it is all more necessary for every employer company to take care of its employees. Current situation calls for Tribunal's interference in instant matter. Total demand was of Rs. 6.48 crore, and assessee already paid Rs. 3.57 crore being more than tax component of Rs. 3.48 crore. Balance demand represented interest and penalty only. Since assessee had already paid his entire tax liability, legitimate interests of revenue cannot be prejudiced by grant of stay on remaining outstanding dues, which were primarily on account of levy of interest, and consequential levies. A stay on collection/recovery of outstanding demands of Rs. 2.91 crore was to be granted till disposal of appeal/end of stipulated period (six months). Any amount available to assessee was to be used firstly for making payments of overdue and current wages/salaries payable to labourers/employees and balance amount was to be used for purpose of carrying out construction activity as necessary for providing quarantine facilities as ordered by Collector.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

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