The Delhi High Court dismissed Newsclick’s plea seeking stay of income tax demand during pendency of appeal before the Commissioner of Income Tax.
The present petition has been filed challenging the orders passed by the respondents whereby the petitioner’s application for stay of demand during the pendency of the appeal before the Commissioner of Income Tax (Appeals) against the assessment order dated 30th December, 2022 has been dismissed. The petitioner further prayed for stay of demand during the pendency of the petitioner’s appeal before the Commissioner of Income Tax (Appeals).
The senior counsel for the petitioner submitted that that the impugned order fails to consider that the petitioner has a strong prima facie case on merits as the petitioner’s Service Agreement with Justice and Education Fund Inc. (‘JEF’), contents supplied, receipts through proper banking channels were duly disclosed in the ITR and legitimacy of business activity, or expenditure of the petitioner were undisputed.
The senior counsel for the petitioner further submitted that there is no requirement for a pre-deposit for the purposes of granting stay of deposit under Section 220(6) of the Income Tax Act, 1961 and that the Office Orders of the CBDT regarding the same are not binding and do not act as a fetter on the discretionary powers vested under Section 220(6) as held by the Supreme Court in CIT V. LG Electronics India (P) Ltd.
A Division Bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna observed that “this Court is of the view that the petitioner has not been able to make out a prima facie case in its favour. To put it mildly, the petitioner has a ‘lot to answer’ in the appeal. The petitioner’s plea of financial stringency based on its balance-sheet also inspires no confidence as according to the Assessing Officer, the accounts have not been properly maintained.”
“Accordingly, the writ petition is dismissed. However, this Court clarifies that the findings given by this Court are only in the context of the present writ proceedings and shall not prejudice either of the parties at the stage of the appellate proceedings.” The Court concluded.
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