CPT V24P7-Art1 (Content).pmd - Taxmann

say, twice the latter amount or
more the collection of the tax
in dispute should be held in
abeyance till the decision on the
appeals, provided there were
no lapse on the part of the
assessee”.
3. The Board desires that the above observations
may be brought to the
notice of all the ITOs working under
you and the powers of stay of recovery
in such cases upto the stage of
first appeal may be exercised by the
IAC/CIT.
The above circular is, prima facie, also in
consonance with the letters and spirit of
provisions contained in sub-section(6) of
section 220 of the IT Act”
The Department is now dithery on these
instructions.
WHETHER INSTRUCTION NO. 96 IS
SUPERSEDED?
9. The CBDT’s stand is that Instruction No.
96, issued with the approval of the then Dy.
PM & FM stands superseded and is no longer
an authority to claim stay of demands during
the pendency of appeals before the CIT(A).
9.1 Supersession of instruction No. 96 cannot
be presumed - This view of the CBDT is not
correct. The CBDT claims that Instruction No.
96 stands superseded by Instruction No. 1914.
However, there is no specific approval taken
for supersession of Instruction No. 96 except
that the Instruction No. 1914 generally states
that it is in supersession of all earlier
Instructions. An assurance given by the FM
during the 8th meeting of Informal Consultative
Committee of the Parliament cannot be
superseded in such a general or one may say
in a casual way without even making a mention
of it in taking FM’s approval. The approval
of the FM that Instruction No. 96 stands
superseded cannot be implied/presumed by
Instruction No. 1914.
9.2 Judicial view on Instruction No. 96 - Judicial
view regarding Instruction No. 96 (supra) is
that it is still valid and is not superseded. In
Valvoline Cummins Ltd. v. Dy. CIT [2008] 171
Taxman 241 (Delhi) – a decision pronounced
on 20th May, 2008 – the Court’s observations
were as under:
“A perusal of paragraph 2 of the aforesaid
extract would show that 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 should be held in abeyance
till the decision on the appeal is taken.
In this case, as we have noted above, the
assessment is almost 8 times the returned
income. Clearly, the above extract from
Instruction No. 96, dated 21-8-1969 would
be applicable to the facts of the case”.
Thus the Court has not agreed with the view
that Instruction No. 96 is superseded.
9.3 Court cases where Instruction No. 96 has
been followed -
9.3.1 Case of Delhi High Court - The Delhi High
Court’s decision in the case of Taneja Developers
& Infrastructure Ltd. v. Asstt. CIT [2010] 324
ITR 247, also indicates that Instruction No. 96
is not superseded, though the Counsel for the
IT Department raised plea regarding the
supersession of this Instruction which has not
been accepted by the Court.
9.3.2 Case of Rajasthan High Court - The Rajasthan
HC in the case of Maheshwari Agro Industries’
case (supra) vide order dated 15-12-2011 has
granted stay in high-pitched assessments on
the basis of Instruction No. 96 saying “the
assessing authorities will also decide application
under section 220(6) of the Act in accordance with
Instruction No. 96, dated 21-8-1969 and observations
made hereinbefore”. Actually in this decision,
the Court directed all CIT(A) to entertain such
applications and decide the same on merits.
The observations were as follows:
“It is directed that all the first appellate
authorities in the cases of other appellant
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