INCOME TAX ACT, 1961

Section 220

Recovery of tax - Stay of demand - Revenue did not address the issue raised by assessee - Assessee was directed to pay 20% of demand

Assessee claimed deduction under section 80P(2)(a)(i) which was declined by AO. It preferred appeal before CIT(A) and while the appeal was pending, assessee submitted an application with the plea that entire demand be stayed/kept in abeyance till disposal of appeal by appellate authority. Assessee's contention was that in earlier years, similar orders passed by AO were interfered with by appellate authority holding assessee to be a co-operative society and allowing deduction under section 80P. Assessee's plea was rejected on the ground that mere filing of an appeal was not a sufficient ground for stay of the entire demand and assessee was asked to pay 20% of demand and on such payment, it was mentioned that demand would be stayed. Held: Approach taken by Revenue authorities in not accepting the stay application of assessee and instead directing the petitioner to pay 20% of the demand was not justified. Revenue authorities did not address the issues raised by assessee, namely, that in his own case for earlier assessment years against orders passed by AO on the same issue, first appellate authority had held it to be a co-operative society and entitled to deduction under section 80P(2). It was not the case of assessee that only because it had filed an appeal before the first appellate authority, the entire demand should be stayed. Therefore, demand notice issued by Revenue was liable to be stayed till disposal of the appeal by first appellate authority.

ReliedUnion of India v. Kamlakshi Finance Corporation Ltd. (1991) 55 Excise Law Times 433 (SC) : 1991 TaxPub(EX) 0623 (SC) 2. ICICI Prudential Life Insurance Co. Ltd. v. CIT-6 & Ors. (2014) 226 Taxman 74 (Bom) : 2014 TaxPub(DT) 4273 (Bom-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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