2018 (2) TMI 1470 - HC - Income Tax

Stay on demand - Held that - Though normally this Court will not interfere in writ jurisdiction against said interlocutory orders passed by the Appellate Authority, which is seized of the appeal before it, but in view of the peculiar facts and circumstances of the case and looking to the fact that the appeal itself is coming up for final hearing after its pre-ponement of date on 09.04.2018 itself, and on which date it is expected that the learned Tribunal will take up the said appeal for final hearing and decide the said appeal, it is considered just and proper in the facts and circumstances, for the limited period, to direct the petitioner-assessee to further deposit a sum of ₹ 10 Crores against the impugned demand within a period of two weeks with the respondent-Income Tax Department and further to undertake before the Tribunal that they will not seek any adjournment of hearing of the said appeal on the date fixed by the Tribunal on 09.04.2018.

Summary

Issues:
Challenge to interlocutory order passed by Income Tax Appellate Tribunal on stay application for Assessment year 2015-16.

Analysis:
The High Court heard a writ petition filed by the Assessee, M/s Flipkart India Limited, challenging an interlocutory order by the Income Tax Appellate Tribunal regarding a stay application for the Assessment year 2015-16. The Tribunal's order directed the Assessee to pay 50% of the demand by a specified date and furnish a bank guarantee for the remaining amount. The stay order was valid for six months from the date of the order or until the appeal was disposed of, whichever was earlier. The High Court refrained from expressing any opinion on the merits of the case to avoid affecting the rights of either party pending the final hearing scheduled for 09.04.2018 before the Tribunal.

The Assessee contended that the assessment was overstated, resulting in a substantial demand against declared losses for the Assessment year. The Assessee argued that it was unable to comply with the Tribunal's payment and guarantee requirements due to the high demand amount. Despite generally not interfering with interlocutory orders of the Appellate Authority, the High Court, considering the circumstances and the imminent final hearing date, directed the Assessee to deposit a specific amount against the demand within two weeks and commit not to seek adjournment during the appeal hearing. The Revenue was also instructed to cooperate and present arguments at the scheduled appeal hearing on 09.04.2018.

The High Court modified the Tribunal's order to require the Assessee to deposit a reduced amount within a specified period and refrain from seeking adjournment during the appeal hearing. The Court expected the Tribunal to decide the appeal within three months from the date of the High Court's order. With these directions, the writ petition was disposed of without costs, and a copy of the order was to be sent to the Income Tax Appellate Tribunal promptly.