2019 (2) TMI 1979 - AT - Income Tax

Stay of demand inclusive of interest - Whether petitioner has a prima facie good case and also it is having massive financial difficulty.? - HELD THAT - We deem it appropriate to grant the stay of outstanding demand till the disposal of the appeal or a period of 180 days from the date of this order, whichever is earlier subject to payment of 15% of ₹ 6,38,99,650/- by 15.03.2019. This stay is subject to the condition that the assessee shall file an undertaking before the AO to the effect that it shall not alienate any of its immovable properties till the disposal of the present appeal. With these observations and subject to the above terms and conditions, the stay application of the assessee gets disposed of accordingly.

Summary

Issues:
Stay of demand amounting to ?6,38,99,650 inclusive of interest for the assessment year 2013-14.

Analysis:
The assessee, a private limited company providing facility management services, sought a stay of demand totaling ?6,38,99,650, including interest, for the assessment year 2013-14 pending the final disposal of appeal. The Assessing Officer (AO) had made adjustments following the Transfer Pricing Officer's (TPO) order, resulting in a demand of ?49,64,770. The Ld. CIT(A) enhanced this adjustment to ?12,09,93,860 based on the operating profit to sales ratio of 14.29%. The assessee contended that certain binding jurisdictional pronouncements were not considered by the Ld. CIT(A), and a rectification petition was pending. The assessee argued for a stay of demand citing a prima facie good case and financial difficulties.

The Revenue opposed the stay application, highlighting that the assessee had not paid any amount out of the total demand. Relying on the Ld. CIT(A)'s order, the Revenue requested the rejection of the stay petition. After hearing both parties and examining the facts, the Tribunal decided to grant a stay of the outstanding demand until the appeal's disposal or 180 days from the order date, subject to the payment of 15% of the demand by a specified date. The stay was conditional on the assessee providing an undertaking not to alienate any immovable properties until the appeal's resolution. The Tribunal disposed of the stay application accordingly, allowing it on the specified terms and conditions.

In conclusion, the Tribunal allowed the stay application in the terms mentioned, emphasizing the payment of a specified percentage of the demand by a set date and the undertaking not to alienate any immovable properties until the appeal's resolution.