2019 (8) TMI 639 - AT - Income Tax

Stay on recovery of outstanding demand - HELD THAT - So far the assessee has made good / paid ₹ 18,80,14,448/- out of the total tax demand of ₹ 30,94,03,636/- (excluding interest charged under section 234B and 234D amounting to ₹ 14,08,94,838/-) which constitutes payment of tax of approx. 61%. Taking into account the facts and circumstances of the case, the fact that the assessee has paid approx. 61% of the tax demand raised and the balance of convenience, we are of the view that this is a fit case for grant of stay on recovery of outstanding demand and do so. The assessee is granted stay on recovery of outstanding demand for a period of 6 months commencing today or disposal of appeal whichever is earlier. The hearing of this appeal has been fixed for 16.09.2019. The assessee is directed to file all returns / submissions and other documents which it relies on in support of the grounds raised in this appeal well before the date of hearing i.e., on 16.09.2019 and also that no adjournment of hearings should be sought for by the assessee other than for genuine reasons. Failure to comply with the above said directions would result in the stay being vacated automatically and all other legal consequences shall follow. Since the date of hearing has been pronounced in open court, no separate notices will be issued for the hearing to the parties.

Summary

Issues:
Stay petition filed by the assessee for Assessment Year 2008-09.

Analysis:
The assessee, engaged in manufacturing medical equipment and providing services, filed its return for Assessment Year 2008-09, declaring income of ?12,81,47,000. The final assessment under section 143(3) r.w.s. 144C of the Income Tax Act, 1961, determined the income at ?91,02,78,428 due to various additions and disallowances. Notably, there were transfer pricing adjustments under section 92CA, disallowance of excess deduction claim under section 10A, and disallowance under section 14A, resulting in a demand of ?45,02,98,474. The assessee contended that it had paid ?18,80,14,448 towards the demand, constituting 61% of the total tax demand of ?30,94,03,636. The assessee sought a stay on the recovery of the outstanding demand until the appeal's disposal.

The Revenue opposed the stay request, but the tribunal considered the submissions and material on record. Recognizing that the assessee had paid a significant portion of the tax demand and considering the balance of convenience, the tribunal deemed it a suitable case for granting a stay on the recovery of the outstanding demand. Consequently, the tribunal granted the assessee a stay for six months or until the appeal's disposal, whichever is earlier. The assessee was directed to submit all necessary documents and returns supporting the appeal's grounds before the hearing scheduled for 16.09.2019. Any failure to comply with the directions would result in automatic vacation of the stay, with ensuing legal consequences. No separate notices for the hearing would be issued since the date was announced in open court. Ultimately, the tribunal allowed the assessee's stay petition for Assessment Year 2008-09, pronouncing the order on 19.07.2019.