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Where the returned income was Rs. 7.25 crores but the assessed income was Rs. 58.68 crores and the assessee had filed a stay application before the Addl. CIT but the same was disposed of by the DCIT, a junior functionary, held:
(i) In accordance with Instruction No.96 dated 21st August, 1969 issued by the CBDT where the income determined is substantially higher than the returned income, that is, twice the latter amount or more, then the collection of tax in dispute had to be held in abeyance till the decision on the appeal is taken;
(ii) The Assessee would, in normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction though it voluntarily agreed to pay 15% of the demand;
(iii) As the Addl. CIT was the AO, he had the power and duty to deal with a stay petition u/s 220 (6). He could not abdicate or relinquish the statutory power nor could he suo motu divest himself of this power and confer it upon a junior functionary such as the DCIT;
(iv) The fact that the assessee had acquiesced in the power of the DCIT could not confer jurisdiction upon the DCIT;
(v) In view of the unreasonable stance of the department, it was directed to pay costs of Rs. 15,000.
See Also: Legrand vs. UOI (Bom) and Mahindra & Mahindra vs. AO (Bom).
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