Pr. CIT
v. LG Electronics India (P) Ltd. Â
(2018)
168 DTR (SC) 353
Ratio
:
In a recent ruling, the hon’ble Supreme Court has held that it
will be open to the authorities, on facts of individual cases, to grant deposit
orders of a lesser amount than 20%, pending disposal of appeal.
Facts
of the case :
Assessing
Officer passed an order dt. 30th June, 2017 u/s. 271(1)(c) of the
Income Tax Act, 1961 thereby raising demand of Rs.32 crores for AY 2007-08. The
AO accordingly, directed the assessee to deposit the said amount on or before
31st July, 2017. The assessee filed an appeal against the said order
before CIT(A).
The
assessee also filed an application u/s. 220(6) of the Act seeking stay of the
recovery proceedings. In response, the AO directed to deposit 15% of the total
tax demand in terms of Office Memorandum dt. 29th Feb., 2016.
Aggrieved,
the assessee went before the Pr. CIT.
Â
Pr.
CIT verdict :
The Pr. CIT directed
the assessee to pay 20% of the tax demand in order to get stay of demand after
referring to Office Memorandum dated 31st July, 2017 according to
which the standard rate for grant of stay is 20% of the disputed demand.
High
Court’s verdict :
The order passed by the Pr. CIT :
(i)Â makes no reference to the central issue in the pending appeal or the grievance of the assessee regarding the order passed by the AO ; and
(ii)Â is without reasons and is therefore unsustainable in law.
Â
Supreme
Court’s verdict :
The
administrative Circular will not operate as a fetter on the CIT since it is a
quasi-judicial authority. It will be open to the authorities, on the facts of
individual cases, to grant deposit orders of a lesser amount than 20 percent,
pending appeal.
Â
Acelegal
Analysis :
The office memo is
merely an administrative guideline and in suitable cases the officers are
entitled rather duty bound to grant stay even by collecting lesser amount or no
amount for instance where case of assessee is covered in his favour by higher
courts.
Disclaimer :
This information Memorandum is meant solely for the
purpose of information. Acelegal do not take any responsibility of decision
taken by any person based on the information provided through this memorandum. Please obtain professional advice before
relying on this information memorandum for any actual transaction. Without prior permission of Acelegal, this memorandum may not be quoted in whole or in part or otherwise referred to in any documents.