Soul v. Dy CIT
INCOME TAX ACT, 1961
Recovery - Certificate proceedings -Stay
AO determined income of assessee at approximately 74 times of returned income and thereupon issued demand notice of assessed income. Assessee filed an appeal before CIT (A), and same was pending. It also filed an application for stay of recovery of demand before CIT, and same was pending. In meanwhile, Deputy Commissioner issued a notice under section 226(3) to assessees bank, directing to attach the debt of assessee under section 222 and to made payment to department. Assessee filed writ petition and contended that assessed income was very high pitched, so it would be entitled to a stay. Held: Assessment at twice the amount of returned income would amount to being substantially higher or high pitched, since, assessees assessed income was approximately 74 times of returned incomely, that would fall within the expression unreasonably high pitched, therefore, impugned notice should be kept in abeyance till the CIT would decide stay application, pending before him.
Income-tax Act, 1961, Section 226, read with section 222, Instruction No. 96, dated 21-8-1969 and Instruction No. 1914 of 1993, dated 2-12-1993
A.Y.: 1996-97
Decision: In favour of assessee.
Case Law Analysis:Valvoline Cummins Ltd. v. Dy. CIT [2008] 171 (Delhi)