HC : Weighs favourable 2G judgment vis-a-vis 'illustrative' CBDT instruction, directs re-consideration of Kalaignar TV's stay-plea

Madras HC sets aside CIT’s order directing Kaliagnar TV (‘assessee’) to pay 20% demand as a condition precedent for staying demand of approx. Rs. 90 cr for AYs 2009-10 and 2010-11, arising out of Sec. 68 addition in relation to the 2G matter; HC notes that such direction was given by CIT / AO relying on CBDT Instruction No.1914 read with the Office Memorandums of February, 2016 and July, 2017; Accepts assessee’s stand that in view of pendency of appeals, the collection of disputed demands arising out of unduly high pitched assessments should be stayed till the appeals are heard and disposed of in terms of CBDT Instruction 96 of 1969; Firstly, HC notes that while CIT had held that the assessment orders cannot be treated as high pitched, he had not given any reason as to why in his opinion, the assessment is not high pitched; Next, HC rejects Revenue’s stand that Instruction no. 96 was superseded by subsequent Instruction no. 1914 of 1993, cites Delhi HC ruling in Taneja Developers & Infrastracture Ltd. to hold that Instruction No.96 is still in force and it binds the AOs; Further remarks that the prima facie effect of the Special Court’s judgment (wherein the accused persons including assessee have been acquitted) was required to be considered by the CIT while examining the prayer for stay, especially since the Assessee's consistent case has been that the income tax proceedings is a mirror image of the proceedings initiated by the CBI.; On Revenue’s stand that no such situation is contemplated to be considered for stay under CBDT Instruction No.1914, HC clarifies that the instruction issued by the Board are illustrative and not exhaustive; Lastly, HC makes it clear that this Court has not rendered any finding on merits, directs assessee to file a stay petition before CIT(A) who shall pass order on stay petition on merits after affording hearing opportunity to assessee.:HC