M/S Aarti Sponge & Power Ltd., Aarti House, Ashoka Ratna,Shanker Nagar, Raipur (C.g.) v. The Assistant Commissioner Of Income Tax-2(1), Aaykar Bhawan,Raipur (C.g.)Raipur (C.g

AFR HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (T) No.59 of 2018 (Order dated 7-3-2018 passed by the Assistant Commissioner of IncomeTax, Circle 2(1), Raipur) M/s Aarti Sponge & Power Ltd., Aarti House, Ashoka Ratna,Shanker Nagar, Raipur (C.G.) Through its Director Manish KumarMandal, S/o Shri Jagdish Prasad Mandal, Aged 45 years, R/oGolcha Residency, C/203, Shankar Nagar, Raipur (C.G.) ---- Petitioner Versus 1. The Assistant Commissioner of Income Tax-2(1), Aaykar Bhawan,Raipur (C.G.)Raipur (C.G.) 2. The Commissioner of Income Tax (Appeals)-1, Aaykar Bhawan,Raipur (C.G.) Raipur (C.G.) 3. The Principal Commissioner of Income Tax-1, Aaykar Bhavan,Raipur (C.G.)Raipur (C.G.) ---- Respondents AND Writ Petition (T) No.60 of 2018 (Order dated 7-3-2018 passed by the Assistant Commissioner of IncomeTax, Circle 2(1), Raipur) M/s Aarti Sponge & Power Ltd., Aarti House, Ashoka Ratna,Shanker Nagar, Raipur (C.G.) Through its Director Manish KumarMandal, S/o Shri Jagdish Prasad Mandal, Aged 45 years, R/oGolcha Residency, C/203, Shankar Nagar, Raipur (C.G.) ---- Petitioner Versus 1. The Assistant Commissioner of Income Tax-2(1), Aaykar Bhawan,Distt. Raipur (C.G.)Distt. Raipur (C.G.) 2. The Commissioner of Income Tax (Appeals)-1, Aaykar Bhawan,Distt. Raipur (C.G.) Distt. Raipur (C.G.) 3. The Principal Commissioner of Income Tax-1, Aaykar Bhavan, Distt.Raipur (C.G.)---- RespondentsRaipur (C.G.)---- Respondents For Petitioner:Mr. Sumit Nema, Senior Advocate with Mr. Anand Dadariya, Advocate. Dadariya, Advocate. For Respondents:Mrs. Naushina Afrin Ali, Advocate. Hon'ble Shri Justice Sanjay K. Agrawal Order On Board 10/04/2018 1. Since common question of law and fact is involved in both the writpetitions, they are heard together and are being disposed of by thiscommon order.petitions, they are heard together and are being disposed of by thiscommon order. 2. The petitioner was subjected to order of assessment by theassessing officer by order dated 30-12-2017. Feeling aggrievedand dissatisfied with the order of assessment, the petitionerpreferred an appeal under Section 246A of the Income Tax Act,1961 (for short, 'the Act of 1961') before the Commissioner ofIncome Tax (Appeals), Raipur. During the pendency of appeal, thepetitioner also filed an application for stay of demand under Section220(6) of the Act of 1961 followed by another application dated 28-2-2018 for staying the demand of ₹ 8,86,98,510/-. The applicationsfiled by the petitioner were rejected by the learned assessing officeron 7-3-2018 stating that in accordance with the memorandum dated31-7-2017 issued by the Central Board of Direct Taxes, deposit of20% of the demand due is imperative. Questioning legality, validityand correctness of the orders dated 7-3-2018, these writ petitionshave been preferred.assessing officer by order dated 30-12-2017. Feeling aggrievedand dissatisfied with the order of assessment, the petitionerpreferred an appeal under Section 246A of the Income Tax Act,1961 (for short, 'the Act of 1961') before the Commissioner ofIncome Tax (Appeals), Raipur. During the pendency of appeal, thepetitioner also filed an application for stay of demand under Section220(6) of the Act of 1961 followed by another application dated 28-2-2018 for staying the demand of ₹ 8,86,98,510/-. The applicationsfiled by the petitioner were rejected by the learned assessing officeron 7-3-2018 stating that in accordance with the memorandum dated31-7-2017 issued by the Central Board of Direct Taxes, deposit of20% of the demand due is imperative. Questioning legality, validityand correctness of the orders dated 7-3-2018, these writ petitionshave been preferred. 3. Mr. Sumit Nema, learned Senior Counsel appearing for thepetitioner, would submit that the circular issued by the Centralpetitioner, would submit that the circular issued by the Central 3. Mr. Sumit Nema, learned Senior Counsel appearing for thepetitioner, would submit that the circular issued by the Centralpetitioner, would submit that the circular issued by the Central Page 3 of 15 Board of Direct Taxes (CBDT) under Section 119(1)(a) of the Act of1961 has the force of law, but the assessing officer was required toconsider the application for stay on merits and if he comes to theconclusion that the petitioner has prima facie case for grant of stay,then the question of deposit could have been considered, but thepre-deposit of 20% cannot be made condition precedent to considerthe application for grant of interim relief. He would further submitthat the application for stay of demand has not been considered onmerits and the application has been disposed of stating that the20% of the demand due be paid and proof of the same be producedwithin seven days from the date of receipt of notice, as such, theorders impugned are illegal and bad in law, therefore, same be setaside and the matters be remanded to the appellate authority toconsider afresh and pass speaking order in accordance with law. 4. Mrs. Naushina Afrin Ali, learned counsel appearing for therespondents, would submit that the order passed by the assessingofficer is challengeable before the Principal jurisdictionaladministrative member i.e. the Principal Commissioner of IncomeTax for review of the decision of the assessing officer, therefore, thepetitioner has alternative efficacious remedy against that rejection,as the review application has to be decided by the PrincipalCommissioner of Income Tax within a period of two weeks.Therefore, the writ petitions as framed and filed are notmaintainable. In accordance with the circulars, the petitioner has todeposit 20% of the demand due as per the CBDT circular dated 29-2-2016 modified by another circular dated 31-7-2017, as such, the impugned orders are supportable in law and the writ petitions deserve to be dismissed. 5. I have heard learned counsel for the parties and considered therival submissions made herein-above and also went through therecord with utmost circumspection.rival submissions made herein-above and also went through therecord with utmost circumspection. 6. Section 119 of the Act of 1961 provides for instructions to subordinate authorities. Sub-section (1) of Section 119 of the Act of 1961 provides as under: - “119. (1) The Board may, from time to time, issue suchorders, instructions and directions to other income-taxauthorities as it may deem fit for the properadministration of this Act, and such authorities and allother persons employed in the execution of this Act shallobserve and follow such orders, instructions anddirections of the Board : Provided that no such orders, instructions ordirections shall be issued— (a) so as to require any income-tax authority tomake a particular assessment or to dispose of aparticular case in a particular manner; or (b) so as to interfere with the discretion of theCommissioner (Appeals) in the exercise of hisappellate functions.” 7. The power of the CBDT to issue instructions came up forconsideration before the Supreme Court in the matter of UCOconsideration before the Supreme Court in the matter of UCO Bank, Calcutta v. Commissioner of Income Tax, W.B.1 in whichthe Supreme Court considering the object and nature of the CBDTcirculars held that CBDT can issue circulars, inter alia, to tone downthe rigour of law and ensure a fair enforcement of its provisions andsuch circulars are binding on the Income Tax Authorities andRevenue also and observed as under: - (b) so as to interfere with the discretion of theCommissioner (Appeals) in the exercise of hisappellate functions.” 7. The power of the CBDT to issue instructions came up forconsideration before the Supreme Court in the matter of UCOconsideration before the Supreme Court in the matter of UCO Bank, Calcutta v. Commissioner of Income Tax, W.B.1 in whichthe Supreme Court considering the object and nature of the CBDTcirculars held that CBDT can issue circulars, inter alia, to tone downthe rigour of law and ensure a fair enforcement of its provisions andsuch circulars are binding on the Income Tax Authorities andRevenue also and observed as under: - “9.… Under sub-section (2) of Section 119, withoutprejudice to the generality of the Board's power set out insub-section (1), a specific power is given to the Board forthe purpose of proper and efficient management of thework of assessment and collection of revenue to issuefrom time to time general or special orders in respect ofany class of incomes or class of cases setting forthdirections or instructions, not being prejudicial toassessees, as the guidelines, principles or procedures tobe followed in the work relating to assessment. Suchinstructions may be by way of relaxation of any of theprovisions of the sections specified there or otherwise.The Board thus has power, inter alia, to tone down therigour of the law and ensure a fair enforcement of itsprovisions, by issuing circulars in exercise of its statutorypowers under Section 119 of the Income Tax Act whichare binding on the authorities in the administration of theAct. Under Section 119(2)(a), however, the circulars ascontemplated therein cannot be adverse to theassessee. Thus, the authority which wields the power forits own advantage under the Act is given the right toforego the advantage when required to wield it in amanner it considers just by relaxing the rigour of the lawor in other permissible manner as laid down in Section119. The power is given for the purpose of just, properand efficient management of the work of assessment andin public interest. It is a beneficial power given to theBoard for proper administration of fiscal law so thatundue hardship may not be caused to the assessee andthe fiscal laws may be correctly applied. Hard caseswhich can be properly categorised as belonging to aclass, can thus be given the benefit of relaxation of lawby issuing circulars binding on the taxing authorities.” 8. The principle of law laid down in UCO Bank(supra) has beenfollowed with approval by the Supreme Court in the matter ofCatholic Syrian Bank Limited v. Commissioner of Income Tax,Thrissur2 and while dealing with the effect of circulars, theSupreme Court held as under: - “23.Now, we shall proceed to examine the effect of thecirculars which are in force and are issued by the CentralBoard of Direct Taxes (for short “the Board”) in exerciseof the power vested in it under Section 119 of the Act.Circulars can be issued by the Board to explain or tonedown the rigours of law and to ensure fair enforcement ofits provisions. These circulars have the force of law and Page 6 of 15 are binding on the Income Tax Authorities, though theycannot be enforced adversely against the assessee.Normally, these circulars cannot be ignored. 24.A circular may not override or detract from theprovisions of the Act but it can seek to mitigate the rigourof a particular provision for the benefit of the assessee incertain specified circumstances. So long as the circularis in force, it aids the uniform and proper administrationand application of the provisions of the Act. (Refer toUCO Bank v. CIT, (1999) 4 SCC 599.)” 9. Thus, it is very well settled that the circulars issued by the CBDThave the force of law and are binding on the income tax authorities,have the force of law and are binding on the income tax authorities, but they cannot be enforced adversely against the assessee and are binding on the Income Tax Authorities, though theycannot be enforced adversely against the assessee.Normally, these circulars cannot be ignored. 24.A circular may not override or detract from theprovisions of the Act but it can seek to mitigate the rigourof a particular provision for the benefit of the assessee incertain specified circumstances. So long as the circularis in force, it aids the uniform and proper administrationand application of the provisions of the Act. (Refer toUCO Bank v. CIT, (1999) 4 SCC 599.)” 9. Thus, it is very well settled that the circulars issued by the CBDThave the force of law and are binding on the income tax authorities,have the force of law and are binding on the income tax authorities, but they cannot be enforced adversely against the assessee and normally, these circulars have not to be ignored. 10. Clause 4(C) of the office memorandum dated 29-2-2016 provides for remedy of review as under: - “4(C) In a case where stay of demand is granted by theassessing officer on payment of 15% of the disputeddemand and the assessee is still aggrieved, he mayapproach the jurisdictional administrative Pr. CIT/CIT fora review of the decision of the assessing officer.”assessing officer on payment of 15% of the disputeddemand and the assessee is still aggrieved, he mayapproach the jurisdictional administrative Pr. CIT/CIT fora review of the decision of the assessing officer.” 11. The above-stated provision only provides the remedy of appealagainst the order granting stay of demand subject to payment of15% of the said demand, if the assessee is still aggrieved againstthat order. Present is a case where no order of stay has beengranted in favour of the petitioner and there is no remedy of reviewagainst the order refusing stay of disputed demand. Therefore, theplea of the Revenue that alternative remedy is available sans meritand is accordingly overruled. against the order granting stay of demand subject to payment of15% of the said demand, if the assessee is still aggrieved againstthat order. Present is a case where no order of stay has beengranted in favour of the petitioner and there is no remedy of reviewagainst the order refusing stay of disputed demand. Therefore, theplea of the Revenue that alternative remedy is available sans meritand is accordingly overruled. 12. The circular dated 29-2-2016 issued for considering the applicationfor stay has been filed along with the writ petition and this circularhas been modified by the circular dated 31-7-2017 and payment offor stay has been filed along with the writ petition and this circularhas been modified by the circular dated 31-7-2017 and payment of 15% of the disputed demand has been enhanced to 20%. Theoffice memorandum dated 29-2-2016 issued by the CBDT reads as follows: - “SECTION 220 OF THE INCOME-TAX ACT, 1961 –COLLECTION AND RECOVERY OF TAX – WHENTAX PAYABLE AND WHEN ASSESSEE DEEMED INDEFAULT – AMENDMENT OF INSTRUCTIONNO.1914, DATED 21-3-1996 TO PROVIDE FORGUIDELINES FOR STAY OF DEMAND AT FIRSTAPPEAL STAGE OFFICE MEMORANDUM (F.NO.404/72/93-ITCC),DATED 29-2-2016 Instruction No.1914 dated 21-3-1996 containsguidelines issued by the Board regarding procedure tobe followed for recovery of outstanding demand,including procedure for grant of stay of demand. 2.XXX XXX XXX 3.XXX XXX XXX 4.In order to streamline the process of grant of stayand standardize the quantum of lump sum paymentrequired to be made by the assessee as a pre-conditionfor stay of demand disputed before CIT (A), the followingmodified guidelines are being issued in partialmodification of Instruction No.1914: (A) In a case where the outstanding demand isdisputed before CIT (A), the assessing officer shallgrant stay of demand till disposal of first appeal onpayment of 15% of the disputed demand, unless thecase falls in the category discussed in para (B)hereunder. (B) In a situation where, 2.XXX XXX XXX 3.XXX XXX XXX 4.In order to streamline the process of grant of stayand standardize the quantum of lump sum paymentrequired to be made by the assessee as a pre-conditionfor stay of demand disputed before CIT (A), the followingmodified guidelines are being issued in partialmodification of Instruction No.1914: (A) In a case where the outstanding demand isdisputed before CIT (A), the assessing officer shallgrant stay of demand till disposal of first appeal onpayment of 15% of the disputed demand, unless thecase falls in the category discussed in para (B)hereunder. (B) In a situation where, (a) the assessing officer is of the view that thenature of addition resulting in the disputed demandis such that payment of a lump sum amount higherthan 15% is warranted (e.g. in a case whereaddition on the same issue has been confirmed byappellate authorities in earlier years or the decisionof the Supreme Court or jurisdictional High Court isin favour of Revenue or addition is based oncredible evidence collected in a search or surveyoperation, etc.) or, Page 8 of 15 (b) the assessing officer is of the view that thenature of addition resulting in the disputed demandis such that payment of a lump sum amount lowerthan 15% is warranted (e.g. in a case whereaddition on the same issue has been deleted byappellate authorities in earlier years or the decisionof the Supreme Court or jurisdictional High Court isin favour of the assessee, etc.), the assessingofficer shall refer the matter to the administrativePr. CIT/CIT, who after considering all relevant factsshall decide the quantum/proportion of demand tobe paid by the assessee as lump sum payment forgranting a stay of the balance demand. xxxxxxxxx xxxxxxxxx xxxxxxxxx” 13. A careful perusal of the aforesaid office memorandum would showthat guidelines have been issued to the assessing officers forconsidering the application for stay. Even the field officers mayrequire the assessee to file a suitable security (bank guarantee,etc.) or pay a reasonable amount in lump sum or in installmentsand in para 4 for streamlining the process of grant of stay and tostandardize the quantum of lump sum payment, and furthestguidelines have been issued that in case where the outstandingdemand is disputed before the Commissioner of Income Tax(Appeals), the assessing officer shall grant stay of demand till thedisposal of appeal on payment of 20% of the disputed demand,unless the case falls in the category discussed in para (B) of thesaid notification/office memorandum. that guidelines have been issued to the assessing officers forconsidering the application for stay. Even the field officers mayrequire the assessee to file a suitable security (bank guarantee,etc.) or pay a reasonable amount in lump sum or in installmentsand in para 4 for streamlining the process of grant of stay and tostandardize the quantum of lump sum payment, and furthestguidelines have been issued that in case where the outstandingdemand is disputed before the Commissioner of Income Tax(Appeals), the assessing officer shall grant stay of demand till thedisposal of appeal on payment of 20% of the disputed demand,unless the case falls in the category discussed in para (B) of thesaid notification/office memorandum. 14. Thus, in the considered opinion of this Court, the assessing officerhas to consider the case of the particular assessee on merits and ifhe comes to the conclusion that the assessee has a case for grantof stay, then subject to deposit of 20% of the disputed demand, thehas to consider the case of the particular assessee on merits and ifhe comes to the conclusion that the assessee has a case for grantof stay, then subject to deposit of 20% of the disputed demand, the Page 9 of 15 14. Thus, in the considered opinion of this Court, the assessing officerhas to consider the case of the particular assessee on merits and ifhe comes to the conclusion that the assessee has a case for grantof stay, then subject to deposit of 20% of the disputed demand, thehas to consider the case of the particular assessee on merits and ifhe comes to the conclusion that the assessee has a case for grantof stay, then subject to deposit of 20% of the disputed demand, the Page 9 of 15 outstanding demand may be stayed and in certain cases where theassessee's case is covered by the decision of the Supreme Courtand the deposit of 20% of the disputed demand may be reduced asper the discretion of the assessing officer, but the deposit of 20% ofthe disputed demand cannot be made condition precedent forhearing the application for stay. The condition of pre-deposit of20% of the disputed demand is neither contemplated by the saidmemorandum nor there is legislative sanction mandating suchdeposit for hearing of an application for stay. Therefore, such acondition of pre-deposit cannot be imposed for hearing anapplication for stay of the disputed demand. 15. The High Court of Gujarat in the matter of Jagdish Gandabhai3Shah v. Principal Commissioner of Income Tax and otherswhile dealing with the similar issue of pre-deposit of disputeddemand qua the said memorandum while considering theapplication for stay by the said authority, held as under: - “8.1Therefore, the interpretation by the AssessingOfficer that at the time of submitting stay applicationand/or before stay application is taken up forconsideration on merits, the assessee is required todeposit 15% of the disputed demand as pre-deposit isabsolutely based on misinterpretation and/or misreadingof the modified Instructions dated 29[th]February 2016.What Clause-4 provides is that the Assessing Officermay/shall grant stay of demand till disposal of first appealon payment of 15% of the disputed demand, unless thecase falls in the category mentioned in para 4 [B] of themodified instructions dated 29[th]February 2016. Underthe circumstances, the impugned decision of therespondent No. 2 in rejecting the stay application andconsequently directing the petitioner to deposit 100% ofthe disputed demand on the ground that the petitionerhas not deposited 15% of the disputed demand as a pre-deposit before his application for stay is considered on merits cannot be sustained and the same deserves to bequashed and set-aside. The matter is required to beremanded to the Assessing Officer to consider the stayapplication in accordance with law and on merits, in lightof the modified instructions dated 29[th]February 2016 andobservations made by us in the present order. 8.4Under the circumstances, for the reasons statedabove, the impugned decision of the respondent No.2-Assessing Officer rejecting the stay application cannot besustained and the same deserves to be quashed andset-aside. So far as the decision of the respondent No. 1is concerned, it appears that after the decision renderedby the respondent No. 2, the assessee filed stayapplication before the respondent No. 1 and therespondent No. 1 has passed the impugned order mainlyconsidering the order of the Assessing Officer. Therefore,first, the Assessing Officer is required to take appropriatedecision on the stay application, as per the modifiedinstruction dated 29[th]February 2016 and unless the casefalls within Clause 4 [B](a) & (b), he is required to passappropriate order on the stay application, granting stayon payment of 15% of the disputed demand. In case, theAssessing Officer is of the opinion that the case fallswithin Clause 4 [B](a) or (b), in that case, he is requiredto follow the procedure as observed hereinabove; moreparticularly, Clause 4 [B] where the Assessing Officer isrequired to refer the matter to the administrative PrincipalCIT/CIT and thereafter, the Principal CIT/CIT to takeappropriate decision.” 16. I am in respectful agreement with the view expressed by theGujarat High Court in the above-stated judgment which squarelyapplies to the facts of the present case. Gujarat High Court in the above-stated judgment which squarelyapplies to the facts of the present case. 17. Now, the question is what should be the procedure followed by theassessing officer while deciding the application for stay. assessing officer while deciding the application for stay. 18. In my opinion, the said question is no longer res integra and it hasbeen well settled by a decision of the Bombay High Court in thematter of KEC International Ltd. v. B.R. Balakrishnan andothers4 in which S.H. Kapadia, J, as then His Lordship wasspeaking for the Bombay High Court, while considering the similarbeen well settled by a decision of the Bombay High Court in thematter of KEC International Ltd. v. B.R. Balakrishnan andothers4 in which S.H. Kapadia, J, as then His Lordship wasspeaking for the Bombay High Court, while considering the similar 42001 SCC OnLine Bom 1229 issue has laid down the following guidelines: - “This is the consequence of an order being passedwithout giving any reasons. Hence, we intend to laydown certain parameters which are required to befollowed by the authorities in cases where a stayapplication is made by an assesee pending appeal to thefirst appellate authority. Parameters: (a) While considering the stay application, the authorityconcerned will at least briefly set out the case of theassessee. (b) In cases where the assessed income under theimpugned order far exceeds returned income, theauthority will consider whether the assessee has madeout a case for unconditional stay. If not, whetherlooking to the questions involved in appeal, a part ofthe amount should be ordered to be deposited forwhich purpose, some short prima facie reasons couldbe given by the authority in its order. (c) In cases where the assessee relies upon financialdifficulties, the authority concerned can briefly indicatewhether the assessee is financially sound and viableto deposit the amount if the authority wants theassessee to so deposit. (d) The authority concerned will also examine whetherthe time to prefer an appeal has expired. Generally,coercive measures may not be adopted during theperiod provided by the statute to go in appeal.However, if the authority concerned comes to theconclusion that the assessee is likely to defeat thedemand, it may take recourse to coercive action forwhich brief reasons may be indicated in the order. (e) We clarify that if the authority concerned complieswith the above parameters while passing orders on thestay application, then the authorities on theadministrative side of the Department like respondentNo.2 herein need not once again give reasoned order.” 19. The aforesaid guidelines have been followed later-on again by the Bombay High Court in the matter of UTI Mutual Fund v. Income Tax Officer 19(3)(2) and others5 in which Dr. D.Y. Chandrachud, in KEC International Ltd. (supra) again held some moreguidelines as under: - “These are, we may say so with respect, sageobservations which must be borne in mind by theassessing authorities. Consistent with the parameterswhich were laid down by the Division Bench in KECInternational and the observations in the judgment inCoca Cola[6], we direct that the following guidelines shouldbe borne in mind for effecting recovery : 1. No recovery of tax should be made pending (a) Expiry of the time limit for filing an appeal; (b) Disposal of a stay application, if any, moved by theassessee and for a reasonable period thereafter toenable the assessee to move a higher forum, if soadvised. Coercive steps may, however, be adoptedwhere the authority has reason to believe that theassessee may defeat the demand, in which case briefreasons may be indicated. “These are, we may say so with respect, sageobservations which must be borne in mind by theassessing authorities. Consistent with the parameterswhich were laid down by the Division Bench in KECInternational and the observations in the judgment inCoca Cola[6], we direct that the following guidelines shouldbe borne in mind for effecting recovery : 1. No recovery of tax should be made pending (a) Expiry of the time limit for filing an appeal; (b) Disposal of a stay application, if any, moved by theassessee and for a reasonable period thereafter toenable the assessee to move a higher forum, if soadvised. Coercive steps may, however, be adoptedwhere the authority has reason to believe that theassessee may defeat the demand, in which case briefreasons may be indicated. 2. The stay application, if any, moved by the assesseeshould be disposed of after hearing the assessee andbearing in mind the guidelines in KEC International; 3. If the Assessing Officer has taken a view contrary towhat has been held in the preceding previous yearswithout there being a material change in facts or law, thatis a relevant consideration in deciding the application forstay; 4. When a bank account has been attached, beforewithdrawing the amount, reasonable prior notice shouldbe furnished to the assessee to enable the assessee tomake a representation or seek recourse to a remedy inlaw; 5. In exercising the powers of stay, the Income TaxOfficer should not act as a mere tax gatherer but as aquasi judicial authority vested with the public duty ofprotecting the interest of the Revenue while at the sametime balancing the need to mitigate hardship to theassessee. Though the AO has made an assessment, hemust objectively decide the application for stayconsidering that an appeal lies against his order: thematter must be considered from all its facets, balancingthe interest of the assessee with the protection of theRevenue.” 20. After having noticed the manner of disposing the appeal ashighlighted by the Bombay High Court in the two judgments noticedherein-above and agreeing with the same, it would appear that thecompetent authority, in the instant case, while considering theapplication simply held that the appeal proceedings are separateand distinct from recovery proceedings and further proceeded tohold that 20% of the disputed demand has not been deposited inaccordance with the guidelines dated 31-7-2017 and passed theorder dated 7-3-2018. Thus, it is quite vivid that the application forstay of demand has not been considered in the manner it wasrequired to be considered and dealt with. Deposit of 20% of thedisputed demand has been made condition precedent for hearingthe application for stay which is not contemplated either under theAct of 1961 or the CBDT guidelines dated 29-2-2016 modified bythe office memorandum dated 31-7-2017. It is only when thecompetent authority is of the opinion that the assessee has madeout a case for grant of interim relief, stay can be granted subject todeposit of 20% of the disputed demand. Likewise, there is a furtherclause in the circular for reduction of 20% deposit if the petitionermakes out a case, it has also not been considered. In straightway,direction of deposit of 20% of the disputed demand has been madewhich is not the correct way of deciding the application for stay ofthe disputed demand. 21. As a fallout and consequence of the aforesaid discussion, theimpugned orders dated 7-3-2018 in both the cases, are set asideand the matter is remitted to the competent authority to considerimpugned orders dated 7-3-2018 in both the cases, are set asideand the matter is remitted to the competent authority to consider Soma Page 14 of 15 21. As a fallout and consequence of the aforesaid discussion, theimpugned orders dated 7-3-2018 in both the cases, are set asideand the matter is remitted to the competent authority to considerimpugned orders dated 7-3-2018 in both the cases, are set asideand the matter is remitted to the competent authority to consider Soma Page 14 of 15 afresh the matter in light of the guidelines as stated by the BombayHigh Court and followed by this Court in the instant order and topass a reasoned order within a period of two weeks from the dateof receipt of a copy of this order after hearing the parties in light ofthe observations made for deciding the application for grant of stayof the disputed demand. 22. The writ petitions are allowed to the extent sketched herein-aboveleaving the parties to bear their own cost(s).leaving the parties to bear their own cost(s). Sd/-(Sanjay K. Agrawal) Judge Page 15 of 15 HIGH COURT OF CHHATTISGARH, BILASPUR Writ Petition (T) No.59 of 2018 M/s Aarti Sponge & Power Ltd. Versus The Assistant Commissioner of Income Tax-2(1) and others AND Writ Petition (T) No.60 of 2018 M/s Aarti Sponge & Power Ltd. Versus The Assistant Commissioner of Income Tax-2(1) and others Head Note The office memorandum issued by the Central Board of Direct Taxesdated 29-2-2016 as modified on 31-7-2017 has a force of law. sdUnzh; izR;{k dj cksMZ }kjk tkjh 29&2&2016 fnukaWfdr dk;kZy; Kkiu 31&7&2017 dks mikUrfjrgksus ij fof/k dk cy j[krk gSA