2014 (7) TMI 177 - HC - Income Tax

Stay application u/s 254(2A) - modification of stay order Claim of deduction u/s 80IA of the Act - Held that - petitioner has filed application for extension of stay before the Tribunal and the same is listed for hearing on 4 July 2014.The Tribunal would consider the petitioner s application for extension of stay granted earlier. At that point of time the Tribunal would consider all facts and circumstances of the case and decide the extension application for stay filed by the petitioner. At this stage besides modifying the impugned order dated 20 September 2013 doing away with the requirement of depositing ₹ 30 crores, no other order is passed.

Summary

Issues:
Challenge to the order passed by the Income Tax Appellate Tribunal under Section 254(2A) of the Income Tax Act, 1961 for Assessment Year 2006-07.

Analysis:
The petitioner challenged the Tribunal's order dated 20 September 2013 regarding a disputed demand for A.Y. 2006-07 amounting to Rs. 297.26 crores. The petitioner had paid Rs. 30 crores earlier, and the balance was stayed by the Tribunal against a bank guarantee and a lien on a fixed deposit. The Tribunal extended the stay multiple times due to an ongoing dispute regarding the petitioner's eligibility for deduction under Section 80IA for A.Y. 2005-06. However, on 20 September 2013, the Tribunal modified the stay conditions, requiring the petitioner to pay Rs. 30 crores from the fixed deposit by a specific date. The petitioner objected to this variation, claiming no change in circumstances. The revenue argued that the Assessing Officer had now passed an order for A.Y. 2005-06, justifying the modification.

The High Court found the variation in the stay conditions on 20 September 2013 unjustified as there was no apparent change in circumstances since the previous stay extension in May 2013. The Court held that the impugned order was unsustainable in law and modified it to remove the variation in stay terms. The Court emphasized that the order lacked justification based on the facts of the case, leading to the modification.

The Court noted that the petitioner had applied for an extension of stay before the Tribunal, scheduled for a hearing on 4 July 2014. The Tribunal would review the extension application, considering all facts and circumstances before deciding. Apart from removing the requirement to deposit Rs. 30 crores, no further orders were issued at that stage. Consequently, the petition was disposed of with the mentioned directions, and no costs were awarded.