2019 (3) TMI 1346 - AT - Income Tax

Stay on the recovery of demand - Tribunal power to extend the period of stay even beyond 365 days - Whether as almost 50% of the demand has been paid and, therefore, stay on the balance of the outstanding demand be continued - HELD THAT - We deem it fit and proper to continue the stay on the recovery of demand for a further period of three months from today or till the date of order of the Tribunal in assessee s appeal, whichever is earlier. At this stage, we may also notice that the corresponding appeal of the assessee was posted today alongwith the stay application, but due to the non-availability of the counsel, it has been requested to be adjourned for further hearing on 28.01.2019 at 2.30 p.m., a date consented by both the parties. It is also directed that till such time the present stay operates, the refund of 7,59,94,310/-, which is determined payable to the assessee be retained/adjusted by the Department against the presently outstanding demand, as per law. Continuation of the stay will be more than the period envisaged under Section 254(2A) of the Income Tax Act, 1961, i.e. more than 365 days - It is noted that in the case of CIT vs. Tata Teleservices (Maharashtra) Ltd. 2015 (12) TMI 1507 - BOMBAY HIGH COURT has upheld the proposition that the Tribunal is vested with the power to extend the period of stay even beyond 365 days, if the circumstances so warrant. In this view of the matter and considering the circumstances of the case, we have extended the stay as stated in the earlier paras. Accordingly, the stay application is disposed off as above.

Summary

Issues:
Extension of stay granted by Tribunal for outstanding demand for Assessment Year 2011-12.

Analysis:
The judgment deals with an application seeking an extension of stay granted by the Tribunal regarding an outstanding demand for Assessment Year 2011-12. The demand amount was &8377; 60,94,46,150, out of which the assessee had already deposited &8377; 31,19,91,745. The Assessing Officer explained that recovery was pending due to the non-disposal of the corresponding appeal by the Tribunal. Additionally, a refund of &8377; 7,59,94,310 pertaining to Assessment Year 2010-11 had been determined payable to the assessee but not yet granted. The Tribunal decided to continue the stay on the recovery of the remaining demand for a further three months or until the Tribunal's order in the assessee's appeal, whichever is earlier. The Tribunal also directed that the refund determined payable to the assessee be retained or adjusted against the outstanding demand during the period of stay.

The Department raised a concern that the continuation of the stay would exceed the period specified under Section 254(2A) of the Income Tax Act, 1961, which is 365 days. However, the Tribunal referred to a judgment of the Hon'ble Bombay High Court in the case of CIT vs. Tata Teleservices (Maharashtra) Ltd., which upheld the Tribunal's power to extend the period of stay beyond 365 days if circumstances warrant such an extension. Therefore, considering the circumstances of the case and the legal precedent, the Tribunal extended the stay as deemed appropriate. The stay application was disposed of based on these considerations.

The judgment was pronounced in the open court in the presence of both parties at the conclusion of the hearing on 3rd January 2019.