Revised guidelines for stay of demand at the First Stage Appeal

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

PRESS RELEASE

New Delhi, 3rd March, 2016

Subject: Issue of revised guidelines for stay of demand at the first appeal stage -regarding
 
With a view to streamline the process of grant of stay of demand when the case of the taxpayer is pending before Commissioner (Appeals) and to standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition for stay of demand disputed, the Central Board of Direct Taxes has issued fresh guidelines to the field authorities of the Income Tax Department.
 
2. Under the revised guidelines, where the outstanding demand is disputed before Commissioner (Appeals), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand. In case any deviation from the standard pre-payment of 15% is proposed by the assessing officer, he shall refer the matter to the administrative Principal Commissioner or Commissioner, who after considering all relevant facts shall decide the quantum/ proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. In a case where stay of demand is granted by the assessing officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative Principal Commissioner or Commissioner for a review of the decision of the assessing officer.

3. This decision of the Board is expected to provide significant relief to the taxpayers in matters relating to grant of stay and recovery of demand by reducing arbitrariness in the disposal of stay petitions where the tax demand is contested at the first appellate stage.
The Office Memorandum dated 29.02.2016 issued in this regard is available on the website of the Department www.incometaxindia.gov.in.
 
(Shefali Shah)
Pr. Commissioner of Income Tax
(Media and Technical Policy)
and Official Spokesperson, CBDT

Recent important income tax caselaws / judgements

SECTION 14A

EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME

Dividend : Provisions of section 14A would apply to a case even where tax free dividend income is earned on shares held as stock-in-trade - Deputy Commissioner of Income-tax, Circle -3(1) v. Damani Estates & Finance (P.) Ltd. (2014) 41 taxmann.com 462 (Mumbai - Trib.)     SECTION 28(i) BUSINESS LOSS/DEDUCTION - ALLOWABLE AS Bad debts : Deposits/advances given in connection with business could not be allowed as bad debt but had to be considered as business loss - Smita Conductors Ltd. v. Deputy Commissioner of Income-tax, Range -3(3), Mumbai (2014) 41 taxmann.com 514 (Mumbai - Trib.)       SECTION 68 CASH CREDIT Creditworthiness and genuineness of transaction : Identity, creditworthiness and genuineness of transaction is not established merely by filing bank account details - Gayathri Associates v. Income-tax Officer, Hyderabad (2014) 41 taxmann.com 526 (Andhra Pradesh) Shares : Where Tribunal recorded a finding that Assessing Officer had treated short-term capital gain declared by assessee from sale of shares as unexplained cash credit merely on basis of doubts and suspicion, said finding being a finding of fact, no substantial question of law arose there from - Commissioner of Income-tax v. Jitendra Dalpatbhai Shah (2014) 41 taxmann.com 523 (Gujarat) Gift : Where Assessing Officer allowed assessee's claim of gift without examining creditworthiness of donor and without considering fact that there was no relationship between assessee and donor and, therefore, there did not exist any occasion for giving a gift, impugned order passed by Assessing Officer was erroneous and same was rightly set aside by Commissioner in exercise of his revisional power - Govind Prasad Agarwal v. Commissioner of Income-tax, Aligarh (2014) 41 taxmann.com 521 (Allahabad)       SECTION 254 APPELLATE TRIBUNAL - POWERS OF Power to grant stay : Where high tax demand was raised on assessee but assessee appeared to have a good prima facie case, demand be stayed - Vodafone India Services (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle -3(3) (2014) 41 taxmann.com 554 (Mumbai - Trib.)   Source : Taxmann