2017 (3) TMI 1637 - HC - Income Tax

Extension of stay - condition on the petitioner to pay an amount of 15 Crores to the Income Tax department for the assessment year 2011-2012 while extending the stay order for a period of 180 days or till the disposal of the appeals whichever is earlier - Held that - A perusal of the interim order clearly reveals that the appeals have not been decided for no fault of the petitioner. The appeal is not being concluded as one or the other member has left the Tribunal. Since the fault does not lie on the part of the petitioner for the non-conclusion of the appeals since the circumstances have not changed prima-facie the learned Tribunal is not justified in imposing the condition that the petitioner should deposit 15 Crores for the assessment year 2011-2012. Therefore this Court stays the imposition of the said condition.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal imposing condition to pay ?15 Crores for extension of stay for assessment year 2011-2012.

Analysis:
The petitioner contested the order of the Income Tax Appellate Tribunal (ITAT) dated 17.03.2017, which mandated a payment of ?15 Crores to the Income Tax department for the assessment year 2011-2012 to extend the stay order for 180 days or until the appeals' disposal. The petitioner had previously challenged assessments from 2007-2008 to 2012-2013, with the Tribunal initially staying the demand upon payment of ?40 Crores. Subsequently, the stay was extended without imposing any conditions due to unchanged circumstances. However, the recent order of 17.03.2017 introduced the condition to deposit ?15 Crores, prompting the current petition.

The petitioner's counsel argued that the previous stay order was extended without conditions due to unchanged circumstances, and the imposition of the ?15 Crores deposit condition was unwarranted. The High Court acknowledged that the appeals remained undecided not due to any fault of the petitioner but because a Tribunal member had departed. Given the unchanged circumstances and lack of fault on the petitioner's part for the appeals' non-conclusion, the Court deemed the Tribunal's condition imposition unjustified and stayed it.

In the interim order analysis, it was evident that the appeals were pending due to reasons beyond the petitioner's control, specifically the departure of a Tribunal member. As the petitioner was not at fault for the delayed conclusion of the appeals and the circumstances remained unchanged, the High Court found the Tribunal's decision to impose the ?15 Crores deposit condition for the assessment year 2011-2012 unjustified. Consequently, the Court stayed the imposition of this condition, providing relief to the petitioner regarding the financial obligation set by the ITAT.