2018 (12) TMI 1612 - AT - Income Tax

Stay of outstanding demand - Garnishee Order attaching the bank accounts - wrong methodology adopted by AO for the purpose of computing taxable income in the assessments framed u/s.143(3) r.w.s.153A - HELD THAT - The additions made in these assessments revolve around the disputed facts of the case and therefore, it cannot be said that there is prima facie case in favour of the assessee. Thus it is not a fit case for stay of demand. However, keeping in view of the hardships of the assessee is facing on account of attachment of bank accounts, we grant the stay of demand subject to payment of installment of ₹ 50.00 lakhs payable on or before 30th / 31st of every calendar month, the first installment shall be paid on or before 31.12.2018 and the assessee shall issue a cheque in favour of the Department for ₹ 50.00 lakhs, after receipt of the cheque, the AO shall lift the bank attachments. The stay shall cease to operate, in case, the assessee seeks adjournment from hearing of the appeal without any just and reasonable cause.

Summary

Issues:
Stay of outstanding demand arising from wrong methodology in computing taxable income.

Analysis:
The judgment delivered by the Appellate Tribunal ITAT Chennai pertains to Stay Petitions filed by the assessee to stay an outstanding demand of ?9,33,16,430. The demand arose due to the Assessing Officer's incorrect methodology in computing taxable income under section 143(3) r.w.s.153A of the Income Tax Act, 1961. The assessee argued that there is a strong prima facie case in their favor and requested the balance demand to be stayed, along with lifting the Garnishee Order attaching bank accounts. The Department, represented by the Ld.DR, opposed the Stay Petitions.

Upon considering the submissions and evidence, the Tribunal found that the additions made in the assessments were based on disputed facts, indicating no clear prima facie case in favor of the assessee. Despite this, acknowledging the hardships faced by the assessee due to the bank account attachments, the Tribunal granted a partial stay of demand. The assessee was directed to pay installments of ?50.00 lakhs by the 30th/31st of each calendar month, with the first installment due by 31.12.2018. Upon receipt of each installment, the AO would lift the bank attachments. The Tribunal specified that the stay would cease if the assessee sought adjournment from the appeal hearing without a justifiable cause.

In conclusion, the Stay Petitions were partly allowed by the Tribunal, providing relief to the assessee while also ensuring compliance with the payment schedule. The order was pronounced on 21st December 2018 in Chennai.