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MANMOHAN, DINESH KUMAR SHARMA
Seven Seas Hospitality Private Limited – Appellant
Versus
Principal Commissioner Of Income Tax Central, Delhi - 3 – Respondent
JUDGMENT
Manmohan, J. - C.M.No.20624/2022
Exemption allowed, subject to all just exceptions.
accordingly, the application stands disposed of.
W.P.(C) No.6784/2022 & C.M.No.20623/2022
1. Present writ petition has been filed challenging the orders dated 31st March, 2022 and 13th December, 2021, passed by Respondents No.1 & 2, without considering the submissions made by the Petitioner.
2. Learned counsel for the Petitioner states that the Petitioner Company filed an application for stay of demand under Section 220(6) of the act for the assessment years 2013-14 to 2019-20 on the ground that the appeal filed by the Petitioner before the CIT(a) against the additions made by Respondent No.2 is pending adjudication and the Petitioner Company is under financial stress on account of COVID-19 pandemic and further on account of the fact that the accounts of the Petitioner Company have been declared as NPa by all the banks due to non-payment of principal installment and interest amount to banks.
3. Learned counsel for the Petitioner states that Respondents Nos.1 & 2 have passed the impugned orders rejecting the plea of the Petitioner to stay the demand and directed the Petitioner to pay 20% of t
Tax authorities have discretion to grant stay on demand lesser than twenty percent, requiring consideration of a prima facie case, balance of convenience, and irreparable injury.
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....
Tax authorities must provide reasoned decisions considering principles like prima facie case and balance of convenience, and can relax mandatory deposit requirements in certain cases.
It is open to tax authorities, on facts of individual cases, to grant stay against recovery of demand on deposit of a lesser amount than 20 per cent of disputed demand, pending disposal of appeal.
Mandatory payment of 20% of disputed tax under Section 201(1) can be relaxed based on case specifics, and non-reasoned administrative orders violate principles of procedural fairness.
The requirement for 20% payment of a disputed tax demand for stay can be relaxed based on the circumstances of the case, as clarified by applicable legal precedents.
The court emphasized the relaxation of the requirement of payment of twenty percent of disputed tax demand in appropriate cases and the necessity for considering the prima facie case, balance of conv....
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.
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