2017 (10) TMI 229 - AT - Income Tax

Seeking extension of stay already granted of outstanding demand of tax and interest - Held that - We have observed that the assessee is not in fault during the intervening period from the date of grant of stay on 10-03-2017 by tribunal till as of now and has complied with the terms and conditions of the stay order. Thus, keeping in view factual matrix of the stay petitions, we are inclined to extend the stay for both the assessment years 2009-10 and 2010-11 of the outstanding demand of tax and interest for a period of 180 days(one hundred and eighty days), or till the disposal of appeal whichever is earlier. The assessee shall not seek any adjournment except on cogent grounds in exceptional circumstances. In case the assessee seeks adjournment without any cogent reasons, the stay shall stand vacated. We would clarify that we have not commented on the merits of the impugned appeals. The AO is directed to verify the validity of corporate guarantee/undertaking issued by the assessee in terms of the order of the tribunal, in order to secure the interest of Revenue.

Summary

Issues:
Extension of stay granted for outstanding demand of tax and interest for assessment years 2009-10 and 2010-11.

Analysis:
The Tribunal, in response to the stay applications filed by the assessee seeking extension of stay for the outstanding demand of tax and interest for the assessment years 2009-10 and 2010-11, noted that the assessee had complied with the terms and conditions imposed earlier. The Tribunal observed that there were common issues pending, and the facts and circumstances remained unchanged from the time stay was initially granted. It was highlighted that the appeals for other assessment years were also pending before different benches of the Mumbai Tribunal, emphasizing the importance of adjudicating the initial year's appeal first to determine eligibility for deduction u/s 80IA of the Income-tax Act, 1961. The tribunal issued an advisory for the disposal of the appeal related to the initial assessment year before a specified date. Subsequently, it was informed that the appeal for the initial year had been decided, enabling the tribunal to proceed with the appeals for the relevant years.

The assessee's counsel argued that the appeals for the concerned assessment years could not be heard due to the pending adjudication of the initial year's appeal regarding eligibility for deduction u/s 80IA. The counsel also mentioned providing an undertaking to the Revenue as per the tribunal's directions to secure its interest. The Departmental Representative (DR) acknowledged the factual position presented by the assessee during the hearing.

After considering the submissions from both parties, the Tribunal found that the assessee had complied with the terms of the stay order granted earlier. It noted the absence of fault on the assessee's part during the period of the stay and decided to extend the stay for both assessment years 2009-10 and 2010-11. The extension was granted for a period of 180 days or until the disposal of the appeal, whichever is earlier. The Tribunal emphasized that the assessee should not seek adjournment without valid reasons, as doing so would lead to the vacation of the stay. The Tribunal clarified that its decision to extend the stay did not imply any judgment on the merits of the appeals. Additionally, the Assessing Officer (AO) was directed to verify the validity of the corporate guarantee/undertaking provided by the assessee to secure the Revenue's interest.

In conclusion, both stay petitions for the assessment years 2009-10 and 2010-11 were allowed by the Tribunal, subject to the specified directions. The order was pronounced in the open court in the presence of both parties on 8th September 2017.