May 2015
Recovery of tax – Stay application – A. Y. 2011-12 – Authority to prima facie consider merits and balance of convenience and irreparable injury – Authority to record reasons and then conclude whether stay should be granted and if so on what condition – No examination and no consideration – Order rejecting stay is not valid –
By K. B. Bhujle Advocate
fiogf49gjkf0d
Hitech Outsourcing Services vs. ITO; 372 ITR 582 (Guj):
For the A. Y. 2011-12, the assessee challenged the assessment order filing appeal before Commissioner (Appeals) The assessee also filed stay application which was initially granted on the condition that the assessee furnished a bank guarantee but subsequently, as the bank guarantee was not furnished, the application was dismissed.
The assessee filed a writ petition challenging the dismissal order. The Gujarat High Court allowed the writ petition and held as under:
“The Revenue had not been able to show any reasons which had weighed the authority for passing the order. When the question of grant of stay against any demand of tax is to be considered, the authority may be required to prima facie consider the merits and balance of convenience and also irreparable injury. These had neither been examined nor considered. The authority was required to record the reasons and then reach an ultimate conclusion as to whether the stay should be granted and if so on what condition. In the absence of any reasons, the order rejecting the stay application could not be sustained.”
