AO & appellate authorities are not mere tax gatherers; have duty to be fair to the assessee

Nishith Madanlal Desai vs. CIT (Bombay High Court)




The assessee, a professional, offered income of Rs.19.41 crores. The AO passed an assessment order u/s 143(3) assessing the total income at Rs.22.43 crores and raised a demand of Rs.1.18 crores. The assessee filed a stay application before the CIT (A) who directed that a refund of Rs. 78 lakhs due for a subsequent year be adjusted and the balance of Rs.41 lakhs be paid. The CIT (A) held that considering “the financial status and affairs” of the assessee, the payment of the balance demand would not cause financial hardship. The assessee filed a Writ Petition to challenge the rejection of the stay application. HELD by the Court allowing the petition: