Assessments deemed excessively high must consider genuine hardship, allowing stays without mandatory pre-payment when necessary to protect taxpayer interests.

ORDER :

S.R.KRISHNA KUMAR, J.

In this petition, petitioner seeks for the following reliefs:-

“(a) Issue a Writ, order or directions in the nature of certiorari or any other writ, order or direction of like nature quashing the Impugned Order dated 18.09.2024 bearing DIN and Order No. ITBA/COM/F/17/2024-25/1068759136(1) ("Annexure A") passed by the Respondent No. 2;

(b) Issue a Writ of prohibition, or a Writ in the nature of prohibition, or any other appropriate Writ, Order or directions, prohibiting the Respondents from giving effect to the demand notice dated 29.03.2024 bearing DIN and Notice No. ITBA/AST/S/156/2023- 24/1063639845(1) Issued by the Respondent No. 3 ("Annexure T") and recovering of the demand quantified therein from the Petitioner for the relevant Assessment Year 2022-23;

(c) Issue a Writ of mandamus, or a Writ in the nature of mandamus, or any other appropriate Writ, Order or directions, directing the Respondents to expedite the hearing of the Petitioner No. 4;

(d) Issue a Writ of prohibition, or a Writ in the nature of prohibition, or any other appropriate Writ, Order or directions, prohibiting the Respondents from giving effect to the demand notice dated 29.03.2024 bearing DIN and Notice No. ITBA/AST/S/156/2023- 24/1063639845(1) issued by the Respondent No. 3 ('Annexure T') and recovering of the demand quantified therein from the Petitioner for the relevant Assessment Year 2022-23;

(e) Issue a Writ of Mandamus, or any other appropriate Writ, Order or directions, directing the respondent No. 4 to hear and dispose the Petitioner's pending appeal for AY 2022-23;

(f) for such further and other reliefs, as this Hon'ble Court may deem fit and proper in the nature and circumstances of the case.”

2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents – revenue and perused the material on record.

3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner submits that the impugned order dated 18.09.2024 passed by the 2^nd respondent directing the petitioner to pay 10% of the outstanding demand is illegal and arbitrary and contrary to the scheme of Section 220 (6) of the Income Tax Act, 1961 (for short ‘the I.T.Act’). In this context, it is submitted that the demand made against the petitioner was in pursuance of a high pitched assessment and the impugned order is contrary to Instruction No.96 dated 21.08.1969, which provides that if the income determined on the assessment is substantially higher than the returned income, recovery of tax should be kept in abeyance. It was submitted that Circular No.589 dated 16.01.1991 provides that the Assessing officer has to consider all relevant factors including the financial capability of the assessee to meet the demand, while Instruction No.1914 dated 02.02.1993 contemplates that if the demand is unreasonably high pitched or undue hardship is likely to be caused to the assessee, superior officers can intervene.

3.1 Learned Senior counsel also invited my attention to the Office Memorandums dated 29.02.2016 and 31.07.2017 in order to contend that for the purpose of grant of stay, amounts even less than 20% can be directed and the discretion granted to the Assessing officer under Section 220 (6) of the I.T.Act ought to be exercised in a fair and reasonable manner and in line with the settled principle of law, Circulars and Instructions and stay ought to be granted where the assessed income is unreasonably high pitched, especially when in the instant case, the demand raised against the petitioner is approximately 138 times of the returned income and the impugned non-speaking order without assigning any reasons as to why the petitioner has to deposit 10% of the outstanding demand deserves to be set aside.

3.2 Learned Senior counsel would also submit that any application for stay must be disposed of after considering presence of prima facie case, genuine hardship