2019 (8) TMI 620 - HC - Income Tax

Stay petition dismissed - proof of financial hardship faced by the petitioner assessee - HELD THAT - It is ex-facie apparent that the order impugned is a cryptic order passed by the ITAT without assigning valid reasons. No stay petition would have been dismissed outrightly for recovery of the outstanding demand. Even if the petitioner-assessee makes a request to grant an absolute stay, the ITAT has to apply its mind to all the possible avenues that are available for the dispensation of justice. If absolute stay is not possible, parameters of conditional stay has to be examined and an appropriate decision has to be taken in the circumstances of the case. For the foregoing reasons, the order impugned cannot be approved and the same deserves to be set aside. Accordingly, the order at Annexure-G 2019 (2) TMI 1379 - ITAT BANGALORE is set aside and the proceedings are remanded to ITAT for re-consideration. The ITAT shall re-consider the matter in accordance with law and decision shall be taken in an expedite manner preferably within a period of six weeks from the date of certified copy of the order. All the rights and contentions of the parties are left open.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal regarding assessment order and demand notice under Income Tax Act 1961.

Analysis:
The petitioner, a Private Limited Company, challenged the order passed by the Income Tax Appellate Tribunal, 'B' Bench, Bengaluru, related to the assessment year 2014-2015. The petitioner had filed its return of Income declaring a loss of ?74,44,09,458. The case was referred to the Transfer Pricing Officer to re-determine the Arm's length Price of the International and Domestic Transactions. An adjustment of ?94,25,45,710 was made, leading to a tax demand of ?9,29,93,360. The petitioner's petition before the Dispute Resolution Panel was confirmed, and the subsequent appeal before the ITAT resulted in the rejection of the application for stay of the demand due to financial hardship faced by the petitioner.

The petitioner contended that the ITAT's order was non-speaking and lacked reasons for rejection, thus seeking its setting aside. The counsel for the Revenue acknowledged the need for reconsideration by the ITAT. The High Court observed that the ITAT's order lacked valid reasons and should have considered all avenues for dispensation of justice, including conditional stay if absolute stay was not possible. Consequently, the High Court set aside the impugned order and remanded the proceedings to the ITAT for re-consideration, directing an expedited decision within six weeks.

In conclusion, the High Court found the ITAT's order deficient in reasoning and directed a re-consideration in accordance with the law. The rights and contentions of the parties were left open, and the writ petition was disposed of accordingly.