Govind Mathur, J. - (1.) THE petitioner, Urban Improvement Trust, Sri Ganganagar preferred an application as per Section 154 of the Income Tax Act, 1961 before the Assistant Commissioner of Income Tax, Circle, Sri Ganganagar on 12.12.2011. On 16.12.2011, the Assistant Commissioner issued a rectified demand notice for a sum of Rs. 1,04,02,140/ -.
(2.) AN application seeking stay of demand was preferred by the petitioner before the Assessing Officer on 09.1.2012. On 23.1.2012, the respondents Assistant Commissioner passed an order on the application aforesaid that reads as under: I have carefully gone through the contents of your letter dated 09.1.2012. The issues raised by you in the said letter have already been dealt with at length while passing the assessment order in your case for A.Y. 2008 -09. It is pertinent to mention here that merely filing an appeal against the assessment order before the appellate authority is not sufficient reason to stay the recovery of demand. Moreover, the Ld. CIT (A) has already adjudicated the issues in favour of the department. The UIT has sufficient funds for payment of demand as is apparent from the news published in dated 16.01.2012. As per the news appearing in the said paper, the UIT has earned Rs. 2 Crore on account of auction of plots in model town and as per news appearing in dated 17.01.2012, the UIT has further earned Rs. 4.50 Crore on account of auction of plots in Model Town. Thus, there are sufficient funds with UIT for payment of outstanding demand. In view of these facts, you are requested to make 50% payment of outstanding demand by 27.01.2012 positively and show the challan in lieu of payment on 27.01.2012 so that the balance demand may be considered to be paid installment. It may also be mentioned here that if 50% demand is not paid by 27.01.2012, coercive action for recovery of demand will be taken against you. Being aggrieved by this order instant petition for writ is preferred.
(3.) THE submission of learned counsel for the petitioner is that the Assistant Commissioner while passing the order dated 23.1.2012 has not taken into consideration the law laid down by the Hon'ble Supreme Court, this Court and also the mandatory circulars issued by the department of Income Tax itself, reference of which is given in para 3 of the appeal memo, that reads as under: The Board desire that the above observations may be brought to the notice of all the Income -tax Officers working under you and the powers of stay of recovery in such cases up to the stage of first appeal may be exercised by the Inspecting Assistant Commissioner/Commissioner of Income -tax. As the Department was not following the above mentioned instructions and so the matter was presented before the honourable Rajsthan High Court in the case of His Late Highness Maharaja Shri Bhagwat Singhji of Mewar vs. Income -tax appellate Tribunal & Ors. Reported in, (1996) 133 CTR 97. In this matter the honorable High Court have held that proposition cannot be disputed that the circulars issued by the CBDT are binding on the authorities exercising powers under the taxing statute and have sufficient force of law. From the perusal of the Instruction No. 96 F. No. 1/6/69 -ITCC dated 21st August, 1969 it is Clear that where the income determined on assessment was substantially higher than the returned income, twice the latter amount or more, the collection of the tax in dispute should be held in abeyance till the decision of the appeals. It cannot be disputed in the present case that the income of the petitioner which was determined by the authority was much more than the twice then the returned income. Here the question of CBDT Instruction No. 1914 dated 2nd December, 1993 may arise which specifically states that it is in super session of all earlier instruction. But in the case of the assessed these instructions are not applicable. The case of His Late Highness Maharaja Shri Bhagwat Singh ji of Mewar (Supra) is decided in 1996 i.e. after the issue of the instruction No. 1914 dated 2nd December 1993 and so the decision of jurisdictional High Court is still applicable. Otherwise also the view of the assessee is supported by the recent judgment of the honorable Delhi High Court in the case of Soul Vs. Deputy Commissioner of Income reported in : (2010) 323 ITR 305 in which the honorable High Court in Para 9 of the order have observed as under: - 9. Having considered the arguments advanced by the learned counsel for the parties, we are of the view that although Instruction No. 1914 of 1993 specifically states that it is in super session of all earlier instructions, the position obtained after the decision of this Court in Valvoline Cummins Ltd. vs. Dy. CIT & Ors., (2008) 271 CTR (Del) 292 is not altered at all. This is so because para No. 2(a) which speaks of responsibility specifically indicates that it shall be the responsibility of the AO and the TRO to collect every demand that has been raised "except the following", which includes "(d) demand stayed in accordance with the pars B and C below". Para B relates to stay petitions. As extracted above, sub -cl. (iii) of Para B clearly indicates that a higher/superior authority could interfere with the decision of the AO/TRO only in exceptional circumstances. The exceptional circumstances have bee indicated as -"where the assessment order appears to be unreasonably high pitched or where genuine hardship is likely to be caused to the assessee". The very question as to what would constitute the assessment order as being reasonably high pitched in consideration under the said Instruction No. 96 and, there, it has been noted by way of illustration that assessment at twice the amount of the returned income would amount to being substantially higher or high pitched. In the case before this Court in Valvoline Cummins Ltd. (Supra) the assessee's income was about eight (8) times the returned income. This Court was of the view that was high pitched. In the present case, the assessed income is approximately 74 time the returned income and obviously, this would fall within the expression unreasonably high pitched. From the above you will please see that the Central Board of Direct Taxes have used the word 'should be held in abeyance' and so it automatic that when the assessed income is more then double of the returned income then the demand should be stayed till the decision of appeal.;