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UJJAL BHUYAN, SUREPALLI NANDA
APR Jewellers Private Limited – Appellant
Versus
Commissioner of Income Tax (Appeals), Hyderabad – Respondent
ORDER :
1. Heard Mr. Siripuram Keshava, learned counsel appearing on behalf of Mr. Challa Gunaranjan, learned counsel for the petitioner and Mr. K. Raji Reddy, learned Standing Counsel for Income Tax Department for the respondents.
2. Petitioner is aggrieved by order dated 04.03.2022 passed by the 1st respondent to the effect that petitioner would not be treated as being in default if the petitioner deposits 20% of the outstanding demand on or before 20.03.2022.
3. It may be mentioned that petitioner is an assessee under the Income Tax Act, 1961 (briefly referred to hereinafter as ‘the Act’) assessed to tax within the jurisdiction of respondent No. 2.
4. For the assessment year 2017-18, respondent No. 2 passed assessment order dated 21.12.2019 under Section 143(3) of the Act making certain additions under Section 69A of the Act. Against the returned income of the petitioner of Rs. 1,78,860.00, by the aforesaid assessment order, income of the petitioner was assessed at Rs. 1,50,03,952.00.
5. Against the aforesaid order of assessment, petitioner has preferred appeal before the 1st respondent. It is stated that the appeal is pending.
6. In the meanwhile, 2nd respondent issued demand notices
Power to consider prayer for stay is incidental and ancillary to the power to hear appeals.
Authorities must provide reasoned decisions when rejecting stay applications and consider claims of financial hardship, ensuring compliance with principles of natural justice.
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.
The court upheld the authority's decision to grant a stay subject to a 10% deposit, emphasizing the need for procedural propriety in stay applications.
Assessments deemed excessively high must consider genuine hardship, allowing stays without mandatory pre-payment when necessary to protect taxpayer interests.
Assessment orders must provide adequate reasoning and consider potential hardship; failure renders them unsustainable, necessitating reevaluation by tax authorities.
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