I-T - Requirement of 20% pre deposit of tax pending appeal is not rigid one and cannot be implemented in all cases of outstanding dues: HC
By TIOL News Service
MUMBAI, MAR 30, 2019: THE Issue is - Whether requirement of 20% pre deposit of tax pending the appeal is not a rigid one and cannot be implemented in all cases of outstanding dues. YES IS THE VERDICT.
Facts of the case:
During the relevant year under consideration, the AO took the return of assessee in scrutiny and passed order of assessment u/s 143(3) computing the assessee's total income at Rs.299.92 Crores. This gave rise to a total demand of Rs.137,95,82,948 crores which included tax of Rs.103.72 crores and interest of Rs.34.23 crores. Challenging the same, the assessee filed appeal against the said order of assessment and on the very same day, also filed an application before the AO requesting that till such appeal was disposed of, recovery of tax arising out of the order of assessment could be kept in abeyance. The AO thereafter passed an order in which he provided that if the assessee had deposited 20% of the outstanding demand, remaining recovery would be stayed pending appeal. The assessee thereupon approached Pr CIT and made the same request, but in vain.
High Court held:
++ what prima facie emerges from the record is that, the assessee undisputedly has an arguable case on the three additions which the AO has made. Prima facie case is one of the considerations which will weigh while imposing condition of deposit of disputed tax pending Appeal as held and observed by this Court in case of UTI Mutual Fund Vs. Income Tax Officer - 2013-TIOL-232-HC-MUM-IT. It is also noticed that in the CBDT Circular dated 29/02/2016 while providing that the AO shall stay pending appeal on deposit of 15% of the disputed amount. The circular also envisaged cases where such requirement can either be increased or decreased depending on facts of the case. Thus requirement of 20% deposit of tax pending the appeal is not a rigid one and cannot be implemented in all cases, irrespective of relevant facts;
++ since the Appeal of assessee is pending before the Appellate Commissioner, this Court will not consider the assessee's argument on merit of disallowances threadbare. Suffice to reiterate that the assessee has a prima facie case on such disputed issues. With this background, it is recalled, that the assessee had already deposited advance tax of Rs.11 Crores and TDS of Rs.7,05,288/- by the time of filing of the return. The assessee has deposited further sum of Rs.1 Crore with the tax department. The order passed by the Commissioner does not take into account the sum of Rs.11,07,05,288/-, perhaps due to oversight since it appears that the assessee may not have brought such facts to his notice.
(See 2019-TIOL-693-HC-MUM-IT)
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