2019 (3) TMI 1069 - HC - Income Tax

Stay petition on recoveries - additional time to deposit demand - HELD THAT - In our order dated 28th February, 2019, we had directed the Petitioner to present revised time table for depositing amount on affidavit. Pursuant to such directions, the Petitioner has filed an affidavit dated 7th March, 2019, in which, revised time schedule for meeting with the requirements of deposit of ₹ 10 Crores. We find that the additional time as requested, can be granted, however, subject to certain conditions. We are informed that the parent company of the Petitioner has to receive a subsidy from the State of Maharashtra for ₹ 48 Crores. The subsidy is not yet received. If such an amount is received, the Petitioner should deposit the entire amount of ₹ 10 Crores minus what is already recovered by the department, as soon as subsidy is received. If the Petitioner misses any if the installments, it would be open for the department to recover the tax.

Summary

Issues:
Petitioner seeks additional time to deposit a total of ?10 Crores as directed by the Income Tax Appellate Tribunal for stay against recoveries pending appeals.

Analysis:
The Petitioner had appealed challenging assessments for the years 2009-10 to 2014-15, with a total tax demand of ?195,41,87,006, including interest. The Tribunal had ordered the Petitioner to deposit ?10 Crores in three installments by specific dates to enjoy a stay on recoveries. However, the Petitioner failed to deposit the installments, leading to the Tribunal vacating the stay on the Revenue's application.

The Petitioner claimed a lack of resources for the deposit but proposed a revised schedule with the assistance of the parent company. The Revenue opposed, arguing that the Petitioner had sufficient time. The Court directed the Petitioner to submit a revised timetable, which was done, suggesting a schedule for meeting the deposit requirements.

The Court accepted the revised time frame for depositing ?10 Crores, subject to conditions. The Petitioner's parent company was expected to receive a subsidy of ?48 Crores, and upon receipt, the Petitioner was to deposit the full amount minus what was already recovered by the department. Failure to make any installment payment would allow the department to proceed with recoveries.

The Court disposed of the petition with directions: the Petitioner to act as per the deposit schedule, file an undertaking, deposit the full amount upon subsidy receipt, and face consequences for default. The stay against recovery was granted pending appeals, with the condition of depositing ?10 Crores. The department could recover rental amounts until the full deposit was made. Once the full amount was deposited, either party could request a hearing date from the Tribunal.