Shri Gunjan Pathak v. Income-Tax

D.B. CIVIL SPECIAL APPEAL (W) NO.1456/2006 M/s. Deepak Vegpro Private LimitedVs.Vs. The Commissioner of Income Tax, Income TaxDepartment, Alwar, Rajasthan & Ors.Department, Alwar, Rajasthan & Ors. Date of Order :: 26.4.2007 HON'BLE THE CHIEF JUSTICE SHRI S.N. JHAHON'BLE SHRI JUSTICE MOHAMMAD RAFIQ Shri Gunjan Pathak, Shri Atul Saxena for the appellant. ******** This special appeal is directed against theorder of the learned Single Judge dated 4.10.2006 inS.B. Civil Writ Petition no.4621/2006 dismissing thewrit petition of the appellant. The appellant hadfiled the writ petition challenging the ordercontained in letter dated 9.5.2006 rejecting itsapplication for stay of demand and the notice dated16.5.2006 in the matter of recovery of tax, and for adirection upon the respondents to keep the recoveryproceedings in abeyance till disposal of the appealpreferred by the appellant against the assessmentorder. The case of the appellant is that in terms ofInstruction no.96, it is mandatory to stay therecovery proceedings till disposal of the appeal incases of high-pitched assessment. In support of thecase of the appellant counsel relied on a decision ofthe Supreme Court in Varghese (K.P.) Vs. Income-tax Officer, (1981) 131 ITR 0597 and of this Court inMaharaja Shri Bhagwat Singhji of Mewar Vs. Income-taxAppellate Tribunal, (1997) 223 ITR 0192. As per the reply of the respondents,Instruction no.96 has been reviewed and Instructionno.1914 has been issued in terms of which demand canbe stayed in the following cases :- (a) If the demand in dispute relates toissues that have been decided in assessee'sfavour by an appellate authority or courtearlier; or (b) If the demand in dispute has arisenbecause the Assessing Officer had adopted aninterpretation of law in respect of whichthere exist conflicting decisions of one ormore High Courts (not of the High Court underwhose jurisdiction the Assessing Officer isworking); or (c) If the High Court having jurisdiction hasadopted a contrary interpretation but theDepartment has not accepted that judgment. It has been clarified that even in such cases, staycan be granted only in respect of the amountattributable to such disputed points. Facts of the case are that the case of theappellant was reopened after scrutiny and when it cameto the notice that the appellant had suppressedassessable income, penalty proceeding was initiated.In these circumstances, we do not think the appellantcan claim stay of the recovery proceedings as a matterof right. We thus do not find any error in the order ofthe learned Single Judge dismissing the writ petitionof the appellant. The appeal is dismissed. The appeals in question said to be pendingbefore the CIT (Appeals), Alwar may be disposed ofwithin two months of receipt of a copy of this ordersubject to co-operation of the appellant. ,J. [S.N.JHA],CJ. Skant/-