Veisa Technologies v. The Assistant Commissioner of Income-tax, Trichy-1, Trichy / The Assistant Commissioner of Income-tax, (A), Trichy1, Trichy/ The CIT(A), Trichy-1, Trichy
[Citation -2019-LL-0227-46]

Citation 2019-LL-0227-46
Appellant Name Veisa Technologies
Respondent Name The Assistant Commissioner of Income-tax, Trichy-1, Trichy / The Assistant Commissioner of Income-tax, (A), Trichy1, Trichy/ The CIT(A), Trichy-1, Trichy
Court HIGH COURT OF MADRAS AT MADURAI
Relevant Act Income-tax
Date of Order 27/02/2019
Judgment View Judgment
Keyword Tags outstanding demand • lump sum payment • survey operation • stay of demand
Bot Summary: Along with the assessment order dated 27.12.2018, passed by the first respondent, the impugned demand on the same date was sent by the first respondent, demanding a sum of Rs.3,01,58,680/- as income tax. Mr.N.Dilip Kumar, learned standing counsel appearing for the respondents brought to the notice of this Court, the Office Memorandum dated 31.07.2017, issued by the Ministry of Finance, Government of India, which reads as follows:- Instruction No.1914 dated 21.03.1996 contains guidelines issued by the Board regarding procedure to be followed for recovery of outstanding demand, including procedure for grant of stay of demand. As seen from the Official Memorandum, once 20 of the disputed demand is paid, the Assessing Officer shall grant stay of the demand till disposal of the Appeal, unless the case falls under the category discussed in paragraph. In 5 In a situation where, the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15 is warranted or, the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15 is warranted the assessing officer shall refer the matter to the administrative Pr.CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. Since the condition has now been relaxed as seen from the Official Memorandum dated 31.07.2017 read with paragraph of the official memorandum dated 29.02.2016, issued by the Government of India, Ministry of Finance, Central Board of Direct Taxes whereby the petitioner can obtain an order of stay of the demand dated 27.12.2018, by paying 20 of the disputed demand of tax. Learned counsel for the petitioner has also conceded that in view of the Official Memorandum referred to supra, the petitioner will approach the Assessing Officer, by paying 20 of the disputed demand and seek stay of the impugned demand, by filing an application under section 220 and 220 of the Income Tax Act. In 7 official memorandum dated 29.02.2016, issued by the Government of India, Ministry of Finance, Central Board of Direct Taxes, by paying 20 of the disputed demand and seek stay of the impugned demand dated 27.12.2018 by filing an application under Section 220 or 220 of the Income Tax Act, as the case may be.


1 BEFORE MADURAI BENCH OF MADRAS HIGH COURT DATED: 27.02.2019 CORAM HONOURABLE MR.JUSTICE ABDUL QUDDHOSE W.P.(MD).4527 of 2019 and W.M.P.(MD).Nos.3608 & 3609 of 2019 M/s Veisa Technologies, Represented by its partner, K.K.Saravanan, S/o Krishnamoorthi, No.33, 1st floor, KRT Complex, Bharathidasan Salai,Trichy 1, Trichy District. ... Petitioner -vs- 1. Assistant Commissioner of Income Tax, Office of Assistant Commissioner of Income Tax, Circle 3(1), Cantonment, Trichy -1, Trichy District. 2. Commissioner of Income Tax, (A), Office of Commissioner of Income Tax, Cantonment, Trichy 1, Trichy District. ... Respondents PRAYER: Writ Petition filed under Article 226 of Constitution of India for issuance of Writ of Certiorarified Mandamus calling for records relating to 1st respondent proceedings made in Notice No. ITBA/AST/S/156/2018-2019/1014609697(1) dated on 27.12.2018 quash same and further direct 2nd respondent to consider objections raised by petitioner's firm dated on 21.12.2018. http://www.judis.nic.in 2 For Petitioner : Mr.R.Sundar For Respondents : Mr.N.Dilip Kumar, Senior Panel Counsel ORDER instant writ petition has been filed challenging demand made by first respondent in notice No. ITBA/AST/S/156/ 2018-19/1014609697(1) dated 27.12.2018. 2. It is case of petitioner that first respondent passed assessment order dated 27.12.2018 under Section 143(3) of Income Tax Act directing petitioner to pay sum of Rs. 3,01,58,680/- (Rupees Three Crores and One Lakh Fifty Eight Thousand Six Hundred and Eighty only) as income tax for assessment year 2016-17. Aggrieved by assessment order dated 27.12.2018, passed by first respondent, petitioner preferred appeal before second respondent under section 246(A) of Income Tax Act on 27.01.2019. Along with assessment order dated 27.12.2018, passed by first respondent, impugned demand on same date was sent by first respondent, demanding sum of Rs.3,01,58,680/- as income tax. petitioner has now challenged impugned demand made by first respondent in this Writ Petition, pending appeal before first http://www.judis.nic.in 3 respondent on ground that objections raised by petitioner were not considered by first respondent in assessment order dated 27.12.2018. 3. Heard Mr.R.Sundar, learned counsel for petitioner and Mr.N.Dilip Kumar, learned standing counsel appearing on behalf of respondents. 4. Mr.N.Dilip Kumar, learned standing counsel appearing for respondents brought to notice of this Court, Office Memorandum dated 31.07.2017, issued by Ministry of Finance, Government of India, which reads as follows:- Instruction No.1914 dated 21.03.1996 contains guidelines issued by Board regarding procedure to be followed for recovery of outstanding demand, including procedure for grant of stay of demand. Vide O.M.No.404/72/93-ITCC dated 29.02.2016, revised guidelines were issued in partial modification of Instrumentation No.1914, wherein, inter alia, vide para 4(A) it had been laid down that in case where outstanding demand is disputed before CIT(A), Assessing Officer shall grant stay of demand till disposal of first appeal on payment of 15% of disputed demand unless case falls in category http://www.judis.nic.in 4 discussed in para (B) thereunder. Similar reference to standard rate of 15% have also been made in succeeding paragraphs therein. matter has been reviewed by Board in light of feedback received from field authorities. In view of Board's efforts to contain over pitched assessments through several measures resulting in fairer and more reasonable assessment orders, standard rate of 15% of disputed demand is found to be on lower side. Accordingly, it has been decided that standard rate prescribed in O.M. dated 29.02.2016 be revised to 20% of disputed demand, where demand is contested before CIT(A). Thus, all reference to 15% of disputed demand in aforesaid O.M. dated 29.02.2016 hereby stand modified to 20% of disputed demand. Other guidelines contained in O.M. dated 29.02.2016 shall remain unchanged. 5. As seen from Official Memorandum, once 20% of disputed demand is paid, Assessing Officer shall grant stay of demand till disposal of Appeal, unless case falls under category discussed in paragraph (B). Paragraph (B) as found in official memorandum dated 29.02.2016 issued by Government of India, Ministry of Finance, Central Board of Direct Taxes (CBDT) reads as follows: http://www.judis.nic.in 5 (B) In situation where, (a) assessing officer is of view that nature of addition resulting in disputed demand is such that payment of lump sum amount higher than 15% is warranted (e.g., in case where addition on same issue has been confirmed by appellate authorities in earlier years or decision of Supreme Court or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in search or survey operation, etc.,) or, (b) assessing officer is of view that nature of addition resulting in disputed demand is such that payment of lump sum amount lower than 15% is warranted (eg., in case where addition on same issue has been deleted by appellate authorities in earlier years or decision of Supreme Court of jurisdictional High Court is in favour of assessee, etc.) assessing officer shall refer matter to administrative Pr.CIT/CIT, who after considering all relevant facts shall decide quantum/proportion of demand to be paid by assessee as lump sum payment for granting stay of balance demand. 6. In instant case, petitioner has already filed Appeal against demand dated 27.12.2018 before second respondent on 27.01.2019, raising identical grounds as raised in instant writ petition. As seen from averments in affidavit filed in support http://www.judis.nic.in 6 of writ petition, it is apprehension of petitioner that condition for grant of stay before second respondent is onerous. Since condition has now been relaxed as seen from Official Memorandum dated 31.07.2017 read with paragraph (B) of official memorandum dated 29.02.2016, issued by Government of India, Ministry of Finance, Central Board of Direct Taxes (CBDT) whereby petitioner can obtain order of stay of demand dated 27.12.2018, by paying 20% of disputed demand of tax. Therefore, apprehension of petitioner that for obtaining stay, conditions imposed will be onerous are no more applicable. 7. Learned counsel for petitioner has also conceded that in view of Official Memorandum referred to supra, petitioner will approach Assessing Officer, by paying 20% of disputed demand and seek stay of impugned demand, by filing application under section 220 (3) and 220 (6) of Income Tax Act. 8. In light of above observations and after hearing submissions of both learned Counsels, petitioner is granted liberty to approach Assessing Officer as per Office Memorandum dated 31.07.2017 read with paragraph (B) of http://www.judis.nic.in 7 official memorandum dated 29.02.2016, issued by Government of India, Ministry of Finance, Central Board of Direct Taxes (CBDT), by paying 20% of disputed demand and seek stay of impugned demand dated 27.12.2018 by filing application under Section 220 (3) or 220 (6) of Income Tax Act, as case may be. 9.With aforesaid direction, Writ Petition is Disposed of. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. 27.02.2019 Index : Yes/No Internet: Yes/No sts Note: Registry is directed to issue order copy on 28.02.2019 To 1. Assistant Commissioner of Income Tax, Office of Assistant Commissioner of Income Tax, Circle 3(1), Cantonment, Trichy -1, Trichy District. 2. Commissioner of Income Tax, (A), Office of Commissioner of Income Tax, Cantonment, Trichy 1, Trichy District. http://www.judis.nic.in 8 ABDUL QUDDHOSE, J., sts Order made in W.P.(MD).4527 of 2019 27.02.2019 http://www.judis.nic.in Veisa Technologies v. Assistant Commissioner of Income-tax, Trichy-1, Trichy / Assistant Commissioner of Income-tax, (A), Trichy1, Trichy/ CIT(A), Trichy-1, Trichy
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