SLP dismissed against ruling confirming stay order subject to deposit of

15% of outstanding tax demand

January 21, 2020[2020] 113 taxmann.com 139 (SC)
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INCOME TAX : Where during pendency of appellate proceedings, a stay

order was passed subject to assessee's depositing 15 per cent of
outstanding tax demand which was confirmed by High Court, SLP filed
against said order was to be dismissed
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[2020] 113 taxmann.com 139 (SC)

SUPREME COURT OF INDIA
Karmvir Builders
v.
Principal Commissioner of Income Tax (Central)*
ABHAY MANOHAR SAPRE AND DINESH MAHESHWARI, JJ.
SLP APPEAL (C) NOS.16670-16671 OF 2017†
MARCH 28, 2019

Section 220 of the Income-tax Act, 1961 - Collection and recovery of tax - When
tax payable & when assessee deemed in default (Stay) - Pursuant to search
operations, assessments were carried out which resulted into substantial tax
demand from assessee - Assessee filed appeal against assessment order -
During pendency of appeal, stay order was passed subject to assessee's
depositing 15 per cent of outstanding demand - Assessee filed a petition seeking
complete stay of demand pending disposal of appeal - High Court dismissed
assessee's petition - Whether, on facts, SLP filed against order of High Court was
to be dismissed - Held, yes [Para 2] [In favour of revenue]
CASE REVIEW

Karmvir Builders v.Pr. CIT [2020] 113 taxmann.com 138 (Guj.) (para 2) [SLP dismissed; See
Annex].
Sanjeev Kumar, AOR, Sudhanshu Palo, Naik H.K. and Rajnish, Advs. for the
Petitioner. Prupesh Kumar, Ms. Rashmi Malhotra, Advs. and Anil Katiyar, AOR for the
Respondent.
ORDER

1. Heard.
2. We see no reason to interfere with the impugned orders passed by the High Court. The special
leave petitions are, accordingly, dismissed.
3. Pending application shall also stand disposed of.
 ANNEX
[2020] 113 taxmann.com 138 (Gujarat)
HIGH COURT OF GUJARAT
Karmvir Builders v. Pr. Commissioner of Income Tax
AKIL KURESHI AND A.J. SHASTRI, JJ.
SPECIAL CIVIL APPLICATION NO. 17617 OF 2016
OCTOBER 19, 2016
SN Divatia, Adv. for the Petitioner.
ORDER

Akil Kureshi, J. - The petitioner has challenged an order dated 07.09.2016 passed by the
Principal Commissioner of Income Tax, Surat. Under such order, the State authority has imposed
a condition on the petitioner depositing 15% of the outstanding demand, upon which, remaining
demand would stand stayed. Such condition had to be fulfilled within seven days from the date
of the receipt of the letter.
2. Counsel for the petitioner submitted that pursuant thereto, search assessments were carried out
leading to substantial tax demands, there was no material found during such search for making
additions. Petitioner has filed appeals against the orders of assessment. Pending such appeals,
complete protection should have been granted. Counsel further submitted that the department
had attached all movable and immovable properties of the petitioner under order dated
21.07.2015. This attachment was extended by further period of six months under an order dated
21.01.2016. Counsel thus submitted that due to such attachment, the petitioner had no liquidity.
Even otherwise, the department's dues were fully secured through such attachment of the
petitioner's properties.
3. Insofar as the petitioner's request for complete stay is concerned, the same cannot be granted.
Pursuant to search operations, assessments were carried out, which has resulted into substantial
tax demands. Merely because the petitioner has filed appeals against such order of assessment by
itself, would not permit us to grant blanket stay. Whether such demand pending appeal should be
stayed, must be dependent upon facts of each case.
4. The second contention of the petitioner however warrants consideration. If the properties are
under attachment, naturally it would be difficult for the petitioner to raise funds for payment of
substantial taxes. If on the other hand, the extension of attachment made under order dated
21.01.2016 has expired with efflux of time, the grievance of the petitioner would be substantially
reduced. In such a situation, except for granting additional time for depositing the tax, no further
relief would be necessary.
5. NOTICE, returnable on 08.11.2016.
Sunil
*In favour of revenue.
†Arising out of order of High Court in Karmvir Builders v. Pr. CIT [2020] 113
taxmann.com 138 (Guj.).