Case Title: Expeditors International of Washingtion V. ACIT (Delhi High Court)
By basing its decision on a circular issued by the Central Board of Direct Taxes, the Delhi High Court denied the recovery procedures relating to the demand for income tax, for the issues that are in favour of taxpayers (CBDT). The Central Board of Direct Taxes itself issued an Instruction dated February 2, 1993, offering rules for Stay of Demand, according to the division bench of Justice Manmohan and Justice Manmeet Singh Arora.
The taxpayer, M/S Expeditors International of Washington, Inc., stated that the order in question would be based on the payment that would be made in relation to the additions that are in the applicant's favour as a result of the series of decisions made by the tribunal in the applicant's own case over the course of the previous seven assessment years.
The Board issued Instruction No. 1914 on February 2, 1993, laying out the guidelines for the stay of demand, as seen by Justices Manmohan and Manmeet Pritam Singh Arora. When the demand in the dispute relates to issues that have already been resolved in the taxpayer's favour by the appellate authority or court, a regulation that grants a full stay applies.
The contested Order also goes against the court's precedents, which have explicitly ruled that the recovery of demands made in connection with cases where the assessee was found to be right.
After learning about the rules that the Central Board of Direct Taxes (CBDT) has issued following the Supreme Court's decision in Dunlop India Ltd. (supra), Rs 5 crore deposit, condition levied through the Tribunal via impugned order on July 14, 2022, is set aside, and the case has been rendered to the High Court, the High Court specified that it would reverse the impugned order because it had categorically held that the recovery of demand against issues that had been decided in favour of the Assessee was wholly unwarranted The existing writ application and the waiting application would be closed in accordance with the aforementioned direction.