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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M. S. Sonak, Jitendra Jain, JJ.
Indrayani Ferrocast Private Limited Represented Through Its Director, Vinod Vedprakash Goyal – Appellant
Versus
Deputy Or Assistant Commissioner Of Income Tax Central Circle 1(2), Pun – Respondent
JUDGMENT :
Jitendra Jain, J.
1. Rule. Rule made returnable immediately at the request and with the consent of the learned counsel for the parties.
2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged order dated 24 February 2023 passed by the ACIT [(Central Circle 1(2)], Pune, order dated 16 March 2023 passed by the PCIT (Central), Pune and the order dated 23 March 2023 passed by the PCIT (Central), Pune whereby the petitioner’s request for stay of demand for assessment year 2021-22, pending appeal, came to be rejected and the petitioner was directed to pay 20% of the demand in six installments.
3. The petitioner is a company engaged in the business of manufacturing M. S. Billets from melting MS Scrap. The petitioner filed its return of income declaring total income of Rs.7.52 crore. On account of search and seizure operation, the case of the petitioner was selected for complete scrutiny and an assessment order came to be passed on 30 December 2022 assessing income at Rs.23.39 crore. In the said assessment order, major additions are towards bogus purchases amounting to Rs.15.86 crore. Demand of Rs.5.86 crore was raised in the said order.
4. T
The court ruled that a petitioner must demonstrate a prima facie case and financial incapacity to obtain a stay on tax demand, which was not established in this case.
Assessments deemed excessively high must consider genuine hardship, allowing stays without mandatory pre-payment when necessary to protect taxpayer interests.
The court affirmed that a stay of tax demand requires compelling proof of financial hardship, emphasizing that mere appeal pendency does not guarantee automatic relief.
The main legal point established in the judgment is the court's emphasis on the need for the CIT to consider the gross profit rate based on past records and the directive to refrain from taking coerc....
Tax authorities must adhere to established guidelines for refund adjustments, and deviations require explicit justification.
The requirement of payment of twenty percent of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases. The tax authorities are eligib....
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