2019 (5) TMI 790 - AT - Income Tax

Stay of outstanding demand - recovery proceedings - HELD THAT - On careful verification of the financial statements submitted by the assessee, the projected inflow of funds for the month of March 19 would be ₹ 138,96,85,812 as against the projected payments of ₹ 138.50 crores under various heads. The assessee expressed its inability to make any payment of tax. The assessee did not submit the balance sheet to verify the other receivables as on the date of hearing. From the funds available with the assessee, we are of the view that the assessee has no financial difficulty to make the payment of outstanding demand and it is also the responsibility of the assessee to make the payment of taxes due. Therefore, in our considered view, AR did not make out a case for granting of stay of demand and hence, we are not inclined to grant the stay. SA filed by the assessee is dismissed.

Summary

Issues: Stay of outstanding demand for AY 2014-15

Analysis:
The Appellate Tribunal ITAT Hyderabad heard a Stay Application filed by the assessee seeking a stay on the outstanding demand of &8377; 39,92,21,960 for the Assessment Year (AY) 2014-15. The assessee's counsel argued that the stay should be granted until the corresponding appeal is disposed of, citing a prima facie case and balance of convenience in favor of the assessee. It was contended that the issues raised in the appeal were covered by the Tribunal's earlier decisions. The financial statements showed a surplus, and payment of the demand would cause financial hardship, thus requesting a stay.

The Departmental Representative (DR) objected to the stay, citing the issues raised in the appeal were addressed by a Supreme Court judgment. The DR argued that the department had a fair chance of success in the appeal, opposing the grant of stay. After hearing both parties, the Tribunal noted that both were confident of success in the appeal. The assessment order was passed by the DCIT, Circle - 3(1), Hyderabad under relevant sections of the Income Tax Act. Upon reviewing the financial statements, the Tribunal found that the assessee had sufficient funds to make the payment and did not demonstrate financial difficulty. The Tribunal held that the assessee failed to establish a case for granting a stay, leading to the rejection of the Stay Application.

In conclusion, the Tribunal dismissed the Stay Application filed by the assessee, emphasizing that the assessee had the financial capability to pay the outstanding demand, and thus, the stay was not warranted. The order was pronounced on 15th March 2019.