The counsel for the petitioner as well as counsel for the department at substantial length on the interplay of Section 220(6) and the Office Memorandum dated 29.02.2016 issued on the subject of partial modification of Instruction No. 1914 dated 21.03.1996 to provide for guidelines for a stay of demand at the first appeal stage.
While Section 220(6) uses the expression “amount in dispute”, the Office Memorandum dated 29.02.2016 uses the expression “demand disputed before CIT(A)”, “demand in dispute” and “disputed demand”. The expression used in the aforesaid office memorandum requires interpretation in the light of Section 220(1) and 220(6).
The issue is, whether the petitioner is required to deposit 20% of the demand raised by the respondent of Rs. 690.73 crore, or 20% of the tax on the amount in dispute. The submission of counsel for the petitioner is that 20% of the tax on the amount in dispute (i.e. the amount assessed minus the amount returned) already stands paid/ credited. The issue raised in this petition would require deeper consideration.
Considering the aforesaid, the respondents were restrained from taking any coercive action against the petitioner for recovery of the demanded amount. This is subject to the condition that the petitioner shall not seek any adjournment of the hearing of the appeal pending before the CIT (A).
It has been seen that the sum and substance of the submission of the petitioner was that the income tax on the returned income of Rs. 210,24,62,383/- amounted to Rs. 69,83,85,442/-. On this basis, the petitioner claimed that the tax disputed demand came to Rs. 592,70,44,401/-.
The petitioner added to the said last figure, the amount of interest under Section 234B and 234D – which was stated in the computation as Rs. 229,94,31,675/-, and the total disputed demand was projected as Rs.822,64,76,076/.
Thus, the projection of the petitioner was that the prepaid taxes lying with the revenue were to the tune of Rs.175,33,83,084/-, and the said amount was much more than the 20% of the disputed demand payable at Rs. 164,52,95,215/-.
The bench observed that according to the petitioner higher of the two figures i.e. the tax on the net taxable income (as returned by the petitioner), and the MAT amount, further said that the petitioner could not have run away from the fact that its liability was, at least, if not more than Rs. 2,247,073,334/.
While dismissing the petition, the bench said that the petitioner has invoked the discretionary extraordinary writ jurisdiction of this Court, the petitioner was expected to approach this Court with clean hands and accordingly with costs quantified at Rs. 5 lakhs to be paid to the Delhi High Court Advocates’ Welfare Trust.To Read the full text of the Judgment CLICK HERE