By TIOL News Service

NEW DELHI, FEB 26, 2019: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether Revenue officers are mandated to impose certain pre-deposit as per se conditional requirement, pending consideration of every application for stay of demand. NO IS THE VERDICT.

Facts of the case:

The assessee company had approached this Court contending that that its request for stay of demand, made for A.Y 2011-2012, had not been considered on merits at all and that the concerned AO had required the assessee to deposit of 20% of the demand as a pre-condition, for consideration of the application for exemption/stay of demand.

High Court held;

Whether Revenue officers are mandated to impose certain pre-deposit as per se conditional requirement, pending consideration of every application for stay of demand - NO: HC

++ it is seen that instructions/office memorandum of the CBDT - Instruction No.1914 dated Dec 02, 1993 outlined the broad principles, which the AO and other authorities had to keep in mind while considering the applications for stay of demand. This was subsequently amended by CBDT Office Memorandum dated Feb 29, 2016 [F.No.404/72/93-ITCC], wherein the figure of 15% has subsequently been increased to 20%. It is evident that the concerned authorities and tax officials have to apply their mind to decide an application for stay of demand. This does not, however, mean that any particular AO in a given case has to impose a per se condition that pending consideration of the application for stay of demand, certain minimum amount has to be deposited;

++ in the present case, this Court is of the opinion that the AO had to necessarily apply his/her mind to the application for stay of demand and pass appropriate orders having regard to the extant directions and circulars. This in turn meant that AO could not have imposed a precondition of the kind that has been done in the present order. Consequently, such order is hereby set aside. The AO shall consider the application for stay of demand and pass appropriate orders. In the meanwhile, the officers are directed not to take any coercive action for enforcing the demands.

(See 2019-TIOL-470-HC-DEL-IT)