2010 (2) TMI 862 - AT - Income Tax

Grant of stay against the recovery - interest under sections 234-B, 234-C and 234D and u/s 220(2) of the Act - assessee claimed depreciation on the brand name - there are no hard and fast rules regarding grant of stay, but prudence, discretion and circumspection are called for and that stay should not be granted as a matter of course - Held that - no serious apprehension to the Revenue s rights of recovery being prejudiced by further waiting till the outcome of the appeals, the balance of convenience is in favour of not collecting the demand immediately, Hon ble Supreme Court s observations in Dunlop s case (1984 - TMI - 40039 - SUPREME Court) cannot be interpreted to mean that this Tribunal is denuded of the powers to grant stay until case for financial stringency is successfully made out by the applicant, balance of convenience and possibilities of Revenue s rights of recovery being prejudiced by waiting till the outcome of appeals, stay petition stands allowed

Summary

Issues:
Stay petition against recovery of Rs.13,82,64,134/-.

Analysis:
The assessee filed a stay petition seeking relief against the recovery of Rs.13,82,64,134/-. The total demand was Rs.26,57,94,286/-, out of which Rs.12,75,30,152/- was already paid. The assessee argued that there was a pending appeal challenging the denial of depreciation claim on a brand name. The counsel contended that there was a strong prima facie case with a reasonable hope of success. The financial position of the assessee was highlighted as unable to meet the substantial demand. The counsel urged for a stay on recovery until the appeal's final disposal or an early hearing. The Departmental Representative opposed the request, citing a Supreme Court judgment. The Tribunal, after considering the arguments and legal positions, found the case fit for granting stay against the payment of Rs.13,82,64,134/- with specific conditions.

The Tribunal acknowledged the arguable nature of the case and the absence of frivolity. It decided to grant the stay considering the facts and circumstances. The conditions imposed included not seeking adjournment until the final hearing and not disposing of fixed assets. The appeal was scheduled for an expedited final disposal. The Tribunal addressed the Departmental Representative's reliance on a Supreme Court judgment, emphasizing the distinction between writ jurisdiction and appellate jurisdiction. It highlighted the need for prudence, discretion, and circumspection in granting stays, considering factors like balance of convenience, irreparable injury, and public interest. The Tribunal concluded that the Supreme Court's observations did not restrict its power to grant stays based on financial constraints, strong prima facie case, and other relevant considerations.

In light of the legal analysis and the principles governing the decision to grant stays, the Tribunal rejected the Departmental Representative's argument and allowed the stay petition subject to the specified conditions. The decision was made in accordance with the settled principles and considerations outlined during the proceedings. The stay petition was ultimately granted with the conditions mentioned, ensuring a fair balance between the interests of the assessee and the Revenue.