Recovery—Garnishee proceedings—In order to institute garnishee proceedings there should be a subsisting relationship between the garnishee and the assessee of which the ITO gets information and which could reasonably lead to recovery of arrears—Where the garnishee, in response to garnishee order dt. 18th June, 1959, replied that there was no subsisting contract with the assessee, later on entered into contract with the assessee in March, 1960, and made payment of Rs. 20,000 to the assessee and again on second garnishee notice dt. 27th March, 1961, nothing was due from garnishee to the assessee, the ITO was not justified in demanding the payment of Rs. 20,000 on the ground that the same was made in contravention of earlier order dt. 18th June, 1959-BUDHA PICTURES(Supreme Court)(1967) 65 ITR 0620

Whether grievance mechanism for High Pitched assessments is sheathed to decide the fate of stay of demand applications and bolster recovery mechanism ? Instruction No. 17/2015 dated 09-11-2015

1. The CBDT has acknowledged that problem of high pitched and unreasonable assessments is persisting .
2. Committees from amongst Pr CIT, CIT(Judicial), CIT (DR), ITAT . AddllCIT(CCIT Hq) shall be member secy. Sr Most member shall be Chairman
3. A grievance made shall be immediately acknowledged
4. Separate record of grievances to be made
5. The Committee shall check grievance along
6. whether prima facie case of

a.       high pitched assessment

b.      non observance of natural justice

c.       Non application of mind

d.      Gross negligence

e.      Lack of Involvement

7. Whether addition is not backed by sound logic or reason , the provisions of law have grossly been misinterpreted, or obvious and well established facts have been ignored
8. If assessment is found to be unreasonable or high pitched, administrative action shall be taken and case shall be presented to appellate authorities .
9. Committee, however not to be treated as alternative /additional appellate channel
10. Committees to be formed till end of Nov 2015

1       11.   Disposal of grievance petition with in two months from the end of month in which grievance is made.

CBEC Circular dated 01-01-2013 on Recovery of Demand held invalid by Mumbai High Court

WRIT PETITION NO.878 OF 2013

Larsen & Toubro Limited & Anr Vs.The Union of India and others    . .

STAY OF DEMAND

1.KEC INTERNATIONAL LTD. vs. B.R. BALAKRISHNAN & ORS.(2001) 170 CTR (Bom) 415 : (2001) 251 ITR 158 (Bom) : (2001) 119 TAXMAN 974 (Bom)
2. TANEJA DEVELOPERS & INFRASTRUCTURE LTD. vs. ASSISTANT
COMMISSIONER OF INCOME TAX & ORS. (2009) 222 CTR (Del) 521 : (2010) 324 ITR 247 : (2009) 20 DTR 137
3.UTI Mutual Fund vs. INCOME TAX OFFICER and Ors.(2012) 249 CTR (Bom) 190 : (2012) 69 DTR (Bom) 306 : (2012) 345 ITR 71 (Bom) : (2012) 206 TAXMAN 341 (Bombay)
4.VALVOLINE CUMMINS LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX
& ORS.(2008) 217 CTR (Del) 292 : (2008) 307 ITR 103 : (2008) 171 TAXMAN 241 : (2008) 8 DTR 145
5.M/s Maheshwari Agro Industries Vs. Union of India & Ors. S.B. Civil Writ Petition No.1264/2011 HIGH COURT OF JUDICATURE FOR RAJASTHAN

An ad interim stay was granted in respect of demand raised in pursuance of Circular No. 967/01/2013-CX, dated 1-1-2013

[2013] 29 taxmann.com 427 (Andhra Pradesh)

HIGH COURT OF ANDHRA PRADESH

Ultratech Cement Ltd.

v.

Union of India*

CIT can not reject stay of demand without reasons

Order rejecting stay on demand should be reasoned one - Application for stay of demand of tax cannot be rejected without considering assessee's submissions and without giving reasons for rejection
Balaji Universal Tradelink (P.) Ltd. [2012] 25 taxmann.com 256 (Bombay)

Order regarding stay of demand must discuss prima facie case

KLM Royal Dutch Airlines and Anr. v.Deputy Director of Income Tax, (2011) 332 ITR 224 (Delhi) in
support of the contention that the order should be a composite one and specifically deal with various elements such as existence of prima facie case etc.

Delhi High Court Reiterated it in case of Virgin Mobile India Private Limited dtd 17-8-2012 W.P. (C) 4983/2012

Stay of Demand under s.220(6)-CBDT Circulars

Board’s letter F.No.1/6/69-ITCC (Instruction No.96)
Minutes of the 8th Meeting of the Informal Consultative Committee held on 13th May, 1969 –
Implementation of assurance given regarding stay of recovery in certain cases – Sec. 220(6) of the IT Act,