The Delhi High Court bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora held that while deciding stay application, Assessing Officer (AO) have to consider, prima facie case, balance of convenience and irreparable injury.
The writ petition has been filed by the petitioner, M/S Toshiba Corporation under Article 226 of the Constitution of India. The writ petition has been filed challenging the order directing the Petitioner to deposit 20% of the disputed amount as well as order under Sections 201(1)/201(1A) of the Income Tax Act, 1961 and the demand notice issued under Section 156 of the Act for the Assessment Year 2016-17. Petitioner also seeks a direction to the respondent to dispose of the Petitioner’s appeal expeditiously. In the present case the petitioner has not claimed financial hardship. Accordingly, the third factor i.e. irreparable injury is not satisfied and hence the Court found no ground to interfere with the impugned order.
The Court clarified that the benefit of the amount deposited by the petitioner in pursuance to the order shall not be given to the three payees and the said pre-deposit amount shall abide by the final order to be passed by the Commissioner in the appeal. Needless to state that, in the event, Petitioner succeeds in its appeal, the Petitioner shall be entitled to refund of the entire amount deposited by it.
The High Court observed “the Assessing Officer and Commissioner of Income Tax (CIT) have to consider three primary issues i.e. prima facie case, balance of convenience and irreparable injury. , this Court directs the CIT(A) to dispose of the Petitioner’s appeal as expeditiously as possible, preferably, within six months from today. At the request of learned counsel for the petitioner, this Court also extends the time to comply with the order dated 5th May, 2022 for a period of four weeks.”
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