M/s R. N. Navnirman Pvt. Ltd. V. Assistant Commissioner Of Income Tax-11

WPT/22/2017

AI Insights

The case involves multiple petitioners, including M/s Vandana Ispat Ltd., M/s Arvind Kumar Shantilal, and M/s R. N. Navnirman Pvt. Ltd., who challenged the demand notices issued by the Assistant Commissioner of Income Tax and the Commissioner of Income Tax (Appeals). The petitioners argued that the demand notices were premature as their appeals against the assessment orders were still pending. The respondents, represented by Mrs. Naushina Ali, referred to a CBDT circular dated 3-3-2016, which provides guidelines for stay of demand at the first appeal stage. The court considered these guidelines and provided a framework for the petitioners to seek a stay on the demand notices by paying 15% of the disputed demand.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 749504 (HC-CHHATTISGARH)
• Appeal Type: Others
• Pronouncement Date: 22-02-2017
• Assessment Year: misc
• Laws Referred To: Central Board of Direct Taxes Circular dated 3-3-2016
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NAUSHINA ALI
• Assessee Lawyers: VINAY JAIN
• Keywords: Assessment Order; Demand notice; Stay of demand; First appeal stage

Judgement Text

"1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WPT No. 21 of 2017 M/s Vandana Ispat Ltd. Through: Director Subhash Chandra Agrawal, S/o Shri Niranjan Lal Agrawal, Aged About 58 Years, Address: Vandana Building M. G. Road, Raipur, District Raipur (Chhattisgarh) ---- Petitioner Versus 1. Assistant Commissioner Of Income Tax-1(1) Central Revenue Building, Civil Lines, Raipur, P.S. Civil Lines, Tah & Distt. Raipur, (Chhattisgarh) 2. Commissioner Of Income Tax ( Appeals), Central Revenue Building, Civil Lines, Raipur, P.S. Civil Lines, Tah & Distt. Raipur (Chhattisgarh) ---- Respondent And WPT No. 23 Of 2017 M/s Arvind Kumar Shantilal 21/360, Near Telghani Naka, Ramsagar Para, Ward- 5, Raipur, District Raipur (Chhattisgarh) Through Its Partner Arvind D Sangoi, S/o Shri Dhamji Bhai Sangoi, Aged About 62 Years, R/o 21/360, Ganjpara, Raipur, District Raipur (Chhattisgarh) ---- Petitioner Vs 1. Income Tax Officer-2(1) Civil Lines, Raipur (Chhattisgarh) 2. Commissioner Of Income- Tax (Appeals)- 1, Central Revenue Building, Civil Lines, Raipur, P. S. Civil Lines, Tah. & Distt. Raipur (Chhattisgarh) ---- Respondent And WPT No. 22 Of 2017 M/s R. N. Navnirman Pvt. Ltd. Vandana Building, M G Road, Raipur, District Raipur (Chhattisgarh) ; Through Its Director 2 Subhash Chandra Agrawal, S/o Shri Niranjan Lal Agarwal, Aged About 58 Years, Address : Vandana Building M. G. Road, Raipur, District Raipur (Chhattisgarh) ---- Petitioner Vs 1. Assistant Commissioner Of Income Tax-1(1) Central Revenue Building, Civil Lines, Raipur, P. S. Civil Lines, Tah & Distt. Raipur (Chhattisgarh) Pin : 492001 2. Commissioner Of Income- Tax (Appeals)- 1, Central Revenue Building, Civil Lines, Raipur, P. S. Civil Lines, Tah. & Distt. Raipur (Chhattisgarh) P I N : 492001 ---- Respondent For Petitioner Mr. Vinay Jain, Advocate For Respondents Mrs. Naushina Ali, Advocate Hon'ble Shri Justice Prashant Kumar Mishra Order On Board 22/2/2017 1. By these petitions, the petitioners have assailed the demand notice issued by respondent No.1 on the ground that the appeal preferred before respondent No.2 against the assessment order is pending consideration, therefore, respondent No.1 should not have issued the demand notice. 2. At this stage, Mrs. Naushina Ali, learned standing counsel appearing for the respondents, would submit that the Central Board of Direct Taxes ('the CBDT' in short) has issued a circular on 3-3-2016 for revised guidelines for stay of demand at the first appeal stage, therefore, if the petitioners move application for grant of stay before the Assessment Officer the same shall be considered in accordance with the circular dated 3-3-2016 3 issued by the CBDT. 3. The Circular dated 3-3-2016 issued by the CBDT is reproduced hereunder for ready reference : New Delhi, 3rd March, 2016 Subject : Issue of Revised Guidelines for stay of demand at the First Appeal Stage – regarding With a view to streamline the process of grant of stay of demand when the case of the taxpayer is pending before Commissioner (Appeals) and to standardize the quantum of lump- sum payment required to be made by the assessee as a pre- condition for stay of demand disputed, the Central Board of Direct Taxes has issued fresh guidelines to the field authorities of the Income Tax Department. 2. Under the revised guidelines, where the outstanding demand is disputed before Commissioner (Appeals), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand. In case any deviation from the standard pre-payment of 15% is proposed by the Assessing Officer, he shall refer the matter to the administrative Principal Commissioner or Commissioner, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. In a case where stay of demand is granted by the Assessing Officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative Principal Commissioner or Commissioner for a review of the decision of the assessing officer. 3. This decision of the Board is expected to provide significant relief to the taxpayers in matters relating to grant of stay and recovery of demand by reducing arbitrariness in the disposal of stay petitions where the tax demand is contested at the First Appellate stage. The Office Memorandum dated 29.02.2016 issued in this regard is 4 available on the website of the Department www.incometaxindia.gov.in. 4. It appears, the Assessment Officer has been empowered to consider the prayer for grant of stay of demand notice or recovery of the disputed amount of tax assessed against the assessee on payment of 15% of the disputed demand. If the assessee is still aggrieved, he has been granted liberty to approach the jurisdictional administrative Principal Commissioner or Commissioner for a review of the decision of the Assessing Officer. Thus, there appears sufficient safeguard for the assessee to seek stay of recovery of the disputed amount before the Assessment Officer or before the Principal Commissioner or Commissioner by way of review. 5. For the foregoing, the writ petitions are disposed of granting liberty to the petitioners to move application for stay before the Assessment Officer within a period of 15 days from today. The Assessment Officer shall consider and decide the application for stay within an outer limit of four (4) weeks from the date of submission of application by the petitioners. 6. It is expected that the appellate authority shall also decide the pending appeals of the petitioners within an outer limit of eight (8) weeks from today. Sd/- Judge ( Prashant Kumar Mishra) Shyna "