- (1.) The petitioner has challenged an order of respondent No.1- Principal Commissioner of Income Tax (Pr.CIT) dated 14.06.2016 rejecting its application to stay the recovery of the demand of about Rs.277 crores till the disposal of its appeal before the Commissioner of Income Tax (Appeals). By a further order dated 26.08.2016, respondent No.1 rejected the petitioner's application for clarification/modification. A copy of this order was tendered in Court.
(2.) The petitioner sought a stay of the recovery of the demand of about Rs. 277 crores till the disposal of its appeal before the Commissioner of Income Tax (Appeals). In the alternative and based on instructions issued by the CBDT dated 29.02.2016 the petitioner sought a stay of the demand upon its paying a reasonable part of the demand not exceeding 15% of the total demand. By the main order dated 14.06.2016, the petitioner was granted a stay subject to it depositing Rs.41.64 crores which constituted 15% of the total demand. The order further permitted the Assessing Officer to adjust any refund which may arise in favour of the assessee company in any assessment year. The petitioner contends that this right to adjust the refund is limited to the amount of Rs.41.64 crores directed to be deposited as a condition of stay. The authorities, however, interpreted the order to authorize them to adjust any refund against the total tax demand of about Rs.277 crores. The petitioner, therefore, sought a clarification of the order dated 14.06.2016. By an order dated 26.08.2016, respondent No.1 while rejecting the application did not interpret the order dated 26.08.2016 but instead relying upon the instructions dated 02.02.1993 issued by the CBDT held that the Assessing Officer/Department may reserve the right to adjust the refund against demand. We have held that in any event the same would be contrary to the instructions issued by Central Board of Direct Taxes (CBDT) dated 29.02.2016 which modified the circular dated 02.02.1993.
(3.) As the petitioner seeks a stay of the demand, it is necessary to refer to the facts only briefly.;