B N NOBIS CO Vs. JOINT CIT

JUDGEMENT

(1.) The assessee has moved these stay petitions, under rule 35A of the Appellate Tribunal Rules, 1963, to seek stay on collection/recovery of income-tax demand of Rs. 10,24,699 and Rs. 94,75,718, created by order under section 154 read with section 143(1)(a) and under section 143(3) read with section 148, respectively, for the assessment year 1993-94. The aforesaid demands were created on account of assessing officers recomputation of allowable deduction under section 80HHC. On assessees appeal against this recomputation, the Commissioner (Appeals), instead of giving any relief to the assessee and instead of even examining merits of the recomputation, declined the claim for deduction under section 80HHC per se on the ground that chartered accountants certificate on Form No. 10CCAC was an invalid certificate. The admitted defect in the chartered accountants certificate was that Annexure A to the aforesaid certificate was on a performa which ceased to be effective from 1-4-1992, onwards, though a revised certificate has since been filed before the lower authorities. The learned Commissioner (Appeals) declined to admit the revised certificate and directed the assessing officer to take deduction under section 80HHC at nil. In effect, the Commissioner (Appeals) directed enhancement of assessed income. With these compounded grievances, the assessee had filed appeals before this Tribunal and has also preferred the present stay petitions.

(2.) Learned counsel for the assessee, with a view to demonstrate that he has a strong prima facie case in appeal, submitted that the assessing officers recomputation of allowable deduction under section 80HHC is wholly erroneous. It was submitted that the chartered accountants certificate in support of deduction under section 80HHC as filed along with the income-tax return, showed the allowable deduction at Rs. 3,09,84,137 which was worked out as per the old formula which admittedly ceased to be effective from 1-4-1992. However, as per the scheme of amendments effective from 1-4-1992, the allowable deduction works out to even higher an amount i.e., at Rs. 4,55,79,721 but the assessing officer has recomputed the allowable deduction at Rs. 2,42,96,210. It was further submitted that the difference between these two figures is explained mainly by following errors committed by the assessing officer :

(3.) Shri D.K. Ghosh, learned Senior Departmental Representative, strongly opposed the stay applications. The learned Departmental Representative submitted that since the assessee has not made out a case for financial stringency nor has he alleged mala fides, it is not a fit case for grant of stay, reliance was placed on the judgment in Asstt. CCE v. Dunlop India Ltd., 1985 ECR 4. In response to Benchs specific question about prima facie merits of computation of deduction under section 80HHC by the assessing officer, the learned Departmental Representative merely submitted that the demands raised by the assessing officer have already been subject to judicial scrutiny by one appellate authority and, therefore, presumption has to be taken against the assessee. According to the learned Departmental Representative merits are required to be discussed only at the time of disposal of appeal itself. It was also submitted that grant of stay is not a matter of normal course and, therefore, merely because assessee has a good prima facie case stay should not be granted. On the strength of these submissions, the learned Departmental Representative urged us to reject the stay applications though, according to the Departmental Representative he had no objection to other prayers of the assessee being accepted.