The Delhi High Court has held that the recovery of demand against issues decided in favour of the assessee is unwarranted.
The division bench of Justice Manmohan and Justice Manmeet Singh Arora has found that the Central Board of Direct Taxes (CBDT) has itself issued an Instruction dated February 2, 1993, giving guidelines for Stay of Demand. One of the guidelines for the grant of complete stay was "if the demand in dispute relates to issues that have been decided in assessee's favour by an appellate authority or court earlier...."
The petitioner/assessee has challenged the Order passed under Section 254 of the Income Tax Act, 1961 by which the petitioner has been directed to pay an amount of Rs. 5 crores against the outstanding demand for the Assessment Year 2018-19.
The contended that the order was passed arbitrarily as the payment was directed against additions which stood covered in favour of the petitioner by a series of decisions rendered by the Tribunal in the petitioner's own case in the previous seven assessment years.
The department contended that for a grant of stay, not just the prima facie case but also the balance of convenience and irreparable loss/injury have to be made out.
The court noted that the additions were covered in favour of the petitioner by a series of decisions rendered by the Tribunal for the last seven assessment years, which is not in dispute.
"Keeping in view the Guidelines/Instruction issued by the CBDT subsequent to the judgement of the Supreme Court in Dunlop India Ltd., the condition of deposit of Rs.5 crore imposed by the Tribunal vide impugned order dated July 14, 2022 is set aside and the matter is directed to be heard by the Tribunal as expeditiously as possible," the court said.
Case Title: M/s Expeditors International Of Washingtion, Inc. Versus ACIT
Citation: 2022 LiveLaw (Del) 759
Citation: W.P.(C) 11032/2022 & C.M.No.32314/2022
Counsel ForPrtitioner: Advocate Deepak Chopra with Rohan Khare
Counsel For Respondent: Sunil Kumar Agarwal