2014 (1) TMI 390 - AT - Income Tax

Stay application TDS demanded u/s 154 Held that - Merely because the Department s system does not indicate the amount of TDS refund, it cannot be held that the assessee should be compelled to deposit the amount once again - It is for the Department to check the error in its system or point out fallacy in the assessee s claim - There can be no question of penalizing the assessee for no fault committed by it - If the assessee s contention about the unallowed TDS credit had been incorrect, the A.O. should have made a mention of this in his order u/s 154 - Prima facie, there is unadjusted TDS against the current year s income - thus, the assesse cannot be pressed to deposit a further sum as has been directed by the AO rest of the amount waived till the disposal stay granted.

Summary

Issues involved:
Stay of outstanding demand for assessment year 2008-2009.

Analysis:
The assessee filed a stay application seeking to hold the outstanding demand of Rs 18,87,67,930 for the assessment year 2008-2009 until the appeal's final disposal. Initially, the demand amount was reduced to Rs 7,55,06,298 after rectification by the Assessing Officer. The assessee had TDS certificates amounting to Rs 26.85 crore, but only Rs 18.28 crore was credited against the due tax. The AO allowed TDS credit as per the available system matching, not granting credit for the remaining Rs 8.57 crore TDS certificates. The assessee deposited Rs 50 lakh as directed, leaving the outstanding demand at Rs 7.05 crore. The Tribunal considered the unadjusted TDS credit of Rs 8.57 crore against the current year's income and granted a stay of the remaining demand till appeal disposal or 180 days from the order date. The Department was permitted to adjust the outstanding demand by allowing credit for the uncredited TDS certificates. The appeal was scheduled for an expedited hearing on 3rd April 2013, with the assessee waiving the right to a separate notice and being warned against seeking adjournments without valid reasons.

In conclusion, the Tribunal allowed the stay application, holding the outstanding demand until the appeal's resolution or 180 days from the order date. The Department was directed to adjust the demand by allowing credit for the uncredited TDS certificates. The assessee was required to attend the expedited hearing on 3rd April 2013 without seeking unjustified adjournments.