Wp/31382/2011 Of Bothra Shipping Services v. The Income Tax Officer

THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKURAND THE HON’BLE SHRI JUSTICE SANJAY KUMAR WRIT PETITION No.31382 OF 2011 DATED:29-12-2011 Between:Bothra Shipping Services,Visakhapatnam. … Petitioner And The Income Tax Officer,Visakhapatnam and another. … Respondents THE HON’BLE THE CHIEF JUSTICE SHRI MADAN B. LOKURANDTHE HON’BLE SHRI JUSTICE SANJAY KUMAR Writ Petition No. 31382 of 2011 ORDER:(per the Hon’ble the Chief Justice Shri Madan B. Lokur) 1. The petitioner is aggrieved by an order dated 16.8.2011 passed by theIncome Tax Officer (International Taxation), Visakhapatnam. 2. The petitioner had filed an application on 11.8.2011 for stay of recoveryof tax demanded by the respondents. 3. That application was considered by the Income Tax Officer (InternationalTaxation) and vide his order dated 16.8.2011, the application was rejected. 4. The Officer has stated that merely because the petitioner has filed anappeal against the assessment order is no reason to stay recovery of thedemand in terms of Instruction No. 1914 issued by the Central Board of DirectTaxes on 2.12.1993. This view is unexceptionable. 5. However, the Officer has also relied upon Circular No. 530, dated6.3.1989 of the Central Board of Direct Taxes, particularly, paragraphs-2 and 3thereof, and has held that since the petitioner did not fall within the categoriesmentioned in paragraph-2 or paragraph-3 of the Circular, it was not entitled toany interim relief. 6. Learned counsel for the Revenue has placed before us Circular No. 530, dated 6.3.1989 and we find that paragraph-4 thereof, is equally relevant and this reads as follows: “In respect of other cases not coveredby para 2 above, the Assessing Officer willtake into account all the relevant factorsand communicate his decision to theassessee in the form of a speaking order. While exercising discretion under thisprovision, the financial capacity of theassessee to pay the demand will not berelevant. “ 7. We find that the Income Tax Officer has not at all adverted to therelevant factors while disposing of the application for stay. He has merely considered the contents of paragraphs 2 and 3 of the Circular No. 530, dated6.3.1989 and has mechanically rejected the stay application filed by thepetitioner. 8. Under the circumstances, we have no option but to set aside the orderdated 16.8.2011 and direct the Income Tax Officer (International Taxation),Visakhapatnam to reconsider the application for stay filed by the petitioneron11.8.2011 and pass a speaking order thereon after considering all the relevantfactors as provided in Circular No. 530, dated 6.3.1989. 9. Until a decision is taken on the stay application, the respondents will notuse coercive measures to recover the tax said to be due. 10. The writ petition is disposed of in the above terms. 11. The miscellaneous application is also disposed of. MADAN B. LOKUR, CJ 29-12-2011 SANJAY KUMAR, J pnb