THE HONBLE SRI JUSTICE G. CHANDRAIAH AND HONBLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 29448 of 2015 23-09-2015 Smt. Kavitha Rajakoti, w/o V.D.Rajakoti,11/645, Srinivasapuram, Santhapeta, SPSR Nellore Petitioner Income Tax Officer, Ward No.IV, 24-2-438 GNT Road, Dargamitta, Nellore and others Respondents !Counsel for petitioner - Mr. S. Dwarakanath ^Counsel for respondents - Mr. B. Narasimha Sharma, Standing Counsel Head Note: ?Citations: HONBLE SRI JUSTICE G. CHANDRAIAH AND HONBLE SRI JUSTICE CHALLA KODANDA RAM WRIT PETITION No. 29448 of 2015 ORDER:- (per Honble Sri Justice Challa Kodanda Ram) This writ petition questions order dated 07.08.2015 passed by 1st respondent rejecting stay of collection of tax, pending appeal before 4th respondent, for Assessment Year 2012-13. 2. Heard Mr. S. Dwarakanath, learned counsel for petitioner, and Mr. B. Narasimha Sharma, learned Standing Counsel for respondents. 3. exemption claimed by petitioner for amount deposited under Capital Gains Account Scheme, under Section 54(2) of Income Tax Act, came to be rejected by 1st respondent/Assessing Officer. Further, petitioners claim for exemption on amount paid after filing of return also came to be rejected. petitioner filed appeal before 4th respondent and same is pending. During pendency of appeal, petitioner filed application before Assessing Officer/1st respondent seeking stay of impugned demand, but same came to be rejected. Incidentally, it is same Assessing Officer who passed Assessment Order. stay petition came to be rejected observing: demand for AY 2012-13 arose on account of wrong claim of deductions u/s 54 of Act and facts were elaborately discussed in assessment order. Hence, I am confident that assessment order will be confirmed by Appellate Authorities.It is pertinent to mention here that filing appeal before CIT(A) does not confer you for stay of collection of appeal. emphasis is ours.) In view of above, your petition for stay of collections is rejected and you are requested to clear off demand immediately, failing which coercive steps will be taken for recovery of demand as deemed fit. 4. perusal of impugned order does not reveal proper appreciation of necessary considerations that are required to be taken into consideration by Assessing Officer when stay application is filed before him. method and manner of considering stay applications by Assessing Officer, pending disposal of appeal, are set out in Central Board of DirectTaxes (CBDT) Instructions No.1914 dated 02.12.1993. relevant portion of said instructions read as under: C. GUIDELINES FOR STAYING DEMAND. (i) demand will be stayed only if there are valid reasons for doing so. Mere filing appeal against assessment order will not be sufficient reason to stay recovery of demand. few illustrative situations where stay could be granted are (a) if demand in dispute relates to issues that have been decided in assessees favour by appellate authority or court earlier; or (b) if demand in dispute has arisen because Assessing officer had adopted interpretation of law in respect of which there exist conflicting decisions of one or more High Courts (not of High Court under whose jurisdiction Assessing Officer is working);or (c) if High Court having jurisdiction has adopted contrary interpretation but Department has not accepted that judgement. It is clarified that in these situations also, stay may be granted only in respect of amount attributable to such disputed points. Further, where it is subsequently found that assesse has not cooperated in early disposal of appeal or where subsequent pronouncement by higher appellate authority or court alters above situation, stay order may be reviewed and modified. above illustrations are, of course, not exhaustive. (ii) In granting stay, Assessing officer may impose such conditions as he may think fit. Thus he may (a) require assessee to offer suitable security to safeguard interest of revenue; (b) require asessee to pay towards disputed taxes reasonable amount in lumpsum or in instalments; (c) require undertaking from assessee that he will cooperate in early disposal of appeal failing which stay order will be cancelled; (d) reserve right to review order passed after expiry of reasonable period, say upto 6 months, or if assessee has not cooperated in early disposal of appeal, or where subsequent pronouncement by higher appellate authority or court alters above situations; (e) reserve right to adjust refunds arising, if any against demand. (iii) Payment by instalments may be liberally allowed so as to collect entire demand within reasonable period not exceeding 18 months. (iv) Since phrase stay of demand does not occur in Section 220(6) of Income-tax Act, Assessing officer should always use in any order passed under Section 220(6) [or under Section 220(3) or Section 220(7)], expression that occurs in section viz, that he agrees to treat assessee as not being in default in respect of amount specified, subject to such conditions as he deems fit to impose. (v) While considering application under Section 220(6), Assessing Officer should consider all relevant factors having bearing on demand raised and communicate his decision in form of speaking order. 5. Apart from this, Assessing Officer is required to act in fair manner and need to consider stay petition independently and pass speaking order stating reasons as to why stay application of petitioner is not required to be considered, as order passed by Assessing Officer may either be upheld or otherwise revised by appellate authority. Learned counsel for petitioner submits that, in similar circumstances, this Court in W.P.No.29198 of 2005 has set aside stay rejection order passed by Assessing Officer and remanded matter back to Assessing Officer for fresh consideration of stay application. In present case, as order passed by Assessing Officer in stay application being non-speaking order, same is liable to be set aside. 6. Accordingly, impugned order is set aside. 1st respondent is directed to consider stay application afresh keeping in view instructions in CBDT Circular No.1914 dated 02.12.1993. petitioner is given liberty to submit further representation and bring additional facts, if any, to notice of Assessing Officer. It is needless to mention that opportunity of hearing may be afforded, if petitioner so desires. 7. Subject to above observations, writ petition is allowed. No costs. Miscellaneous petitions, if any pending, shall stand closed. ____________________ G. CHANDRAIAH, J ___________________________ CHALLA KODANDA RAM, J 23rd September, 2015 Smt. Kavitha Rajakoti v. Income Tax Officer, Ward No.IV