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2019 (4) TMI 516 - HC - Income TaxStay of the recovery of demand - Disallowance of TDS credit - Revenue states that she has been instructed to make a statement before this Court that if this Court proposes to grant any stay of the recovery of demand, the same shall be on condition of the Applicant depositing 50% of the demand notice - HELD THAT - There is substance in the submission made by the learned Counsel for the Applicant. The Applicant is a Government of India Undertaking. Substantial amount of TDS claimed by the Applicant, is disallowed by the Revenue. Such amount is already lying deposited with the Revenue. We are inclined to grant unconditional stay for recovery of demand, pursuant to the Order dated 10.12.2018. It is ordered accordingly.
Issues: Stay of recovery of demand pending Tax Appeal No. 30/2016
Analysis: The Civil Application sought a stay of recovery of demand following an Order dated 10.12.2018 during the pendency of Tax Appeal No. 30/2016. The Tax Appeal was admitted on various substantial questions of law, challenging the Assessing Officer's disallowance of TDS credit. The Applicant contended that the disallowance was erroneous, and a substantial amount of over &8377; 6 crores was already with the Revenue. A fresh demand of &8377; 2,18,54,040/- was raised, which the Applicant argued would not exceed &8377; 2 crores even if the appeal was dismissed, with the possibility of a refund. The Revenue's Counsel proposed a stay condition of depositing 50% of the demand notice, without further submissions. The Court, considering the Applicant as a Government of India Undertaking and the amount in dispute already deposited with the Revenue, granted an unconditional stay for the recovery of demand, as ordered. The Court admitted Tax Appeal No. 30/2016 on substantial questions of law related to the disallowed TDS credit. The Applicant's argument centered on the erroneous disallowance by the Assessing Officer, highlighting the substantial amount already held by the Revenue. Despite a fresh demand, the Applicant estimated their liability to not exceed &8377; 2 crores, with the potential for a refund. The Revenue's Counsel suggested a stay condition of depositing 50% of the demand, without providing additional justifications. The Court, in its prima facie view, acknowledged the Applicant's position as a Government of India Undertaking and the existing deposit with the Revenue, leading to the grant of an unconditional stay for the recovery of demand. In conclusion, the Court, after considering the submissions and circumstances, granted an unconditional stay for the recovery of demand pursuant to the Order dated 10.12.2018. The decision was based on the Applicant's status as a Government of India Undertaking, the substantial TDS amount in dispute, and the existing deposit with the Revenue. The Court disposed of the Civil Application with no costs, directing the parties to act on the authenticated copy of the order.
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