2019 (2) TMI 1275 - HC - Income Tax

Condition imposed by the Tribunal for grant of stay - HELD THAT - While granting an interim order, what is required to be seen is as to whether the assessee made out a prima facie case, as to whether the balance of convenience is in favour of the assessee and as to whether the assessee will be put to irreparable hardship if the interim order is not granted. Further, the Tribunal does not record any finding that the assessee has not made out a prima facie case. So far as the aspect of hardship is concerned, the Tribunal itself was conscious of the fact that on account of attachment of the bank account, the assessee was put to hardship. The third aspect namely balance of convenience has not been adverted to by the Tribunal. If the entire balance outstanding is directed to be paid, it may render the appeal petitions themselves as infructuous. Therefore, while granting a reprieve to the assessee, we also intend to protect the interests of the Revenue by slightly modifying the order passed by the Tribunal. Accordingly, the writ petitions are disposed of by directing the petitioner to pay a sum of ₹ 3,00,00,000/- (Rupees three crores only) in two instalments. The first instalment of ₹ 1,00,00,000/- (Rupees one crore only) shall be paid on or before 31.1.2019. The remaining amount of ₹ 2,00,00,000/- (Rupees two crores only) shall be paid either in one lumpsum or in two instalments on or before 15.3.2019.

Summary

Issues:
Challenge to common order of Income Tax Appellate Tribunal regarding stay petitions for outstanding demand.

Analysis:
The assessee filed writ petitions challenging the common order of the Income Tax Appellate Tribunal granting stay of outstanding demand subject to specific conditions. The Tribunal imposed a condition of paying &8377; 50 lakhs on or before 30th/31st of every month, causing the assessee to approach the High Court. The main issue was whether this condition was onerous.

The assessee's case involved filing revised returns after a search operation, paying a significant sum, and facing hardship due to attachment of bank accounts. The total tax payable was determined, with a remaining amount due. Appeals were filed, partly allowed by CIT(A), leading to further appeals before the Tribunal where stay petitions were filed and disposed of by the impugned order.

The Tribunal acknowledged the assessee's hardship due to the bank account attachment but imposed a monthly payment condition without setting an outer time limit. The High Court emphasized the need to assess if the assessee made a prima facie case, balanced convenience, and faced irreparable hardship. The Tribunal's order lacked a finding on a prima facie case and did not address the balance of convenience aspect.

To balance the interests of the assessee and the Revenue, the High Court modified the Tribunal's order. It directed the assessee to pay &8377; 3,00,00,000 in two instalments, with the first instalment due by 31.1.2019 and the remaining amount by 15.3.2019. Compliance would result in a stay of the remaining demanded amount; failure to comply would lead to dismissal of the writ petitions. The Tribunal was instructed to schedule appeal hearings accordingly.

In conclusion, the High Court's judgment aimed to provide relief to the assessee while safeguarding the Revenue's interests by adjusting the payment conditions set by the Tribunal, ensuring a fair balance between the parties involved in the tax dispute.