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2019 (3) TMI 732 - AT - Income TaxStay of demand - recovery proceeding - Assessee referring to the cash flow for the next three month and six months submitted that the net cash flow from operations will be at meagre and therefore the assessee is really in short of funds for making full payment of outstanding demand - HELD THAT - Considering the submissions of both the parties and taking the financial conditions and the issue in appeal into consideration, we grant stay of outstanding demand for the A.Y. 2014-15 for a period of 180 days or till the disposal of appeal whichever is earlier subject to payment of 15% of the outstanding demand on or before 31st March 2019. Registry is directed to fix the appeal for hearing on 09th April, 2019 along with the appeals for the A.Y. 2012-13 and A.Y. 2013-14. We make it clear that the stay granted by this order gets vacated in the event of the assessee seeking adjournment without just and reasonable cause.
Issues:
Stay of outstanding demand for A.Y. 2014-15. Analysis: The appellant sought a stay of the outstanding demand of ?17,69,06,060 for the assessment year 2014-15. The demand was later revised to ?15,88,06,350 by the Assessing Officer through an order passed under section 154 of the Income Tax Act. The appellant argued that the Dispute Resolution Panel (DRP) and the Transfer Pricing Officer (TPO) had based their decisions on previous years' orders, specifically for A.Y. 2012-13 and 2013-14. The appellant highlighted that for A.Y. 2012-13, a stay was granted upon payment of ?1,00,00,000 out of a total demand of ?15.80 Crores, and for A.Y. 2013-14, a stay was granted upon payment of ?2,00,00,000 out of a total demand of ?28.37 Crores. Therefore, the appellant requested a stay on payment of ?1,00,00,000 for A.Y. 2014-15. The Department opposed the stay, noting that the Commissioner of Income-tax had already granted a stay until 30.06.2019 subject to payment of 20% of the outstanding demand. The appellant argued that their financial situation was constrained, with cash and bank balances of ?3.30 Crores and debtors of ?424.91 Crores. It was emphasized that only the cash and bank balances could be readily realized, while the debtors' realization was dependent on payment terms and not immediately liquid. The appellant projected a meager net cash flow from operations for the upcoming months, indicating a shortage of funds to make full payment of the outstanding demand. After discussions, the appellant agreed to pay 15% of the outstanding demand before 31st March 2019. Considering the submissions from both parties, the Tribunal granted a stay of the outstanding demand for A.Y. 2014-15 for 180 days or until the appeal's disposal, subject to payment of 15% of the demand by the specified date. The appeal was scheduled for hearing on 09th April, 2019, alongside appeals for A.Y. 2012-13 and 2013-14. It was clarified that the stay would be vacated if the appellant sought an adjournment without just cause. In conclusion, the Stay Application was allowed under the specified conditions, with the Tribunal's order pronounced on 8th March, 2019.
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