Pre-deposit @20%- appeal proceedings
This query is : Resolved
25 December 2024
Sir, on appeal filed with the appellate authority, the dept. is demanding 20% pre-deposit irespective of the good merits in the case. Any case laws are availble to substantiate that since there are good merits in the case, the pre-deposit 20% may be waived off.
26 December 2024
Section 220(6) of I.T act gives power to A.O to treat assessee not assessee in default regarding disputed amount during pendency of appeal. Here, primary consideration is whether appeal presents strong prima facie case which are in favour of assessee and potential for irreparable harm if the stay is not granted. Ld. AO can impose conditions for granting stay, such as requiring a pre-deposit.
Certain cases where relaxation was given in past.
Delhi High Court, in Dabur India Ltd. v. CIT (TDS) (Del-HC), analyzed that pre-requisite can be waived in certain cases for example if there are past appellate decisions in favor of assessee or if there’s credible evidence that supports taxpayer’s position then requirement of payment for pre-deposit can be relaxed.
Karnataka High Court, in Flipkart India (P) Ltd. v. Asstt. CIT 2017 TaxPub (DT) 0826 (Karn-HC) has also relaxed for high-pitched assessments and said that 20% deposit may not be reasonable and court recognized that nature of assessment should guide Ld. AO’s decision.
Certain cases where relaxation was given in past.
Delhi High Court, in Dabur India Ltd. v. CIT (TDS) (Del-HC), analyzed that pre-requisite can be waived in certain cases for example if there are past appellate decisions in favor of assessee or if there’s credible evidence that supports taxpayer’s position then requirement of payment for pre-deposit can be relaxed.
Karnataka High Court, in Flipkart India (P) Ltd. v. Asstt. CIT 2017 TaxPub (DT) 0826 (Karn-HC) has also relaxed for high-pitched assessments and said that 20% deposit may not be reasonable and court recognized that nature of assessment should guide Ld. AO’s decision.
26 December 2024
Sushen Mohan Gupta v. Pr. CIT 2024 TaxPub(DT) 1702 (Del-HC)
Court found that the Principal Commissioner failed to assess merits of the case before imposing a 40% pre-deposit requirement and held that both AO & Principal Commissioner did not adequately consider the prima facie merits & undue hardship, leading to revoking of the orders.
Court found that the Principal Commissioner failed to assess merits of the case before imposing a 40% pre-deposit requirement and held that both AO & Principal Commissioner did not adequately consider the prima facie merits & undue hardship, leading to revoking of the orders.
26 December 2024
Telugupalayam Primary Agricultural Cooperative Bank v. Pr. CIT 2024 TaxPub(DT) 729 (Mad-HC),
Court criticized appellate authority for not providing reasons for demanding 20% deposit & directed authority to reassess the situation, considering the financial condition of assessee.
Court criticized appellate authority for not providing reasons for demanding 20% deposit & directed authority to reassess the situation, considering the financial condition of assessee.
26 December 2024
Office Memorandums & CBDT guidelines provide agenda for officers which they can promoting consistency & fairness in handling stay applications.
They outline situations where pre-deposit requirement can be relaxed or waived specifically when there are certain decisions in favor of the assessee or when the addition has been reversed in previous years.
For example, Office Memorandum dated 29-2-2016 is frequently referenced in cases like Tata Teleservices Ltd. v. CIT 2023 TaxPub(DT) 1450 (Del-HC), where the Delhi High Court repeated that these guidelines are not rigid & should be applied with discretion power of AO and their own understanding on the same. The memorandum specifically mentions cases where the SC or HC has ruled in favor of assessee, allowing for relaxation of the pre-deposit.
These guidelines ensure that officers exercise their discretion kindly, considering specific circumstances & legal decisions that may affect the case.
They outline situations where pre-deposit requirement can be relaxed or waived specifically when there are certain decisions in favor of the assessee or when the addition has been reversed in previous years.
For example, Office Memorandum dated 29-2-2016 is frequently referenced in cases like Tata Teleservices Ltd. v. CIT 2023 TaxPub(DT) 1450 (Del-HC), where the Delhi High Court repeated that these guidelines are not rigid & should be applied with discretion power of AO and their own understanding on the same. The memorandum specifically mentions cases where the SC or HC has ruled in favor of assessee, allowing for relaxation of the pre-deposit.
These guidelines ensure that officers exercise their discretion kindly, considering specific circumstances & legal decisions that may affect the case.
26 December 2024
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