High Court Bares Fangs At Dept's Stay Recovery Mania: Issues Guidelines For Stay Orders

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Thu, Mar 22, 2012 at 6:30 PM
Subject: Message from EGroup of SolapurCAs High Court Bares Fangs At Dept's Stay Recovery Mania: Issues Guidelines For Stay Orders
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

UTI Mutual Fund vs. ITO (Bombay High Court)

S. 220(6): Guidelines laid down on how stay applications should be dealt with

 

The assessee, a mutual fund, was a beneficiary of a trust named India Corporate Loan Securitisation Trust which was set up for securitising a loan of Rs.300 crores by issue of Pass Through Certificates (PTCs). The assessee had subscribed to the PTCs and its beneficial interest was proportionate to the PTCs subscribed. The Trust received interest of Rs.21.49 crores in respect of a loan and distributed the income to its beneficiaries in their respective shares. The AO passed an assessment order on the trust in the capacity of an AOP. Though a stay application was filed, the AO, without disposing of the stay application, demanded that 50% of the demand be paid. He also directed the assessee to pay Rs. 9.63 crores on the ground that it was a member of the AOP (Trust) and was jointly and severally liable in respect of the demand against the AOP. The assessee filed a stay application which was disposed of by the AO on 9.3.2012 (received by the assessee on 13.3.2012. On 12.3.2012, the AO attached the assessee's bank account u/s 226(3). The assessee filed a Writ Petition pointing out that the action had been in pursuance of the CBDT Chairman's letter dated 7.2.2012 promising postings commensurate with tax recovery. HELD by the High Court:

 

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