2020 (10) TMI 927 - AT - Income Tax

Extension of stay granted - grant stay beyond 365 days - HELD THAT - Payments made by the assessee is already much in excess of 20% of the disputed demand of tax, interest, fee, penalty, etc., and in this manner, the amended first proviso to section 254(2A) gets satisfied in the present case. In view of the above discussion, we grant extension of stay up to 19.03.2021 in order to ensure that the total stay granted by the Tribunal does not exceed 365 days because the original stay was granted by the Tribunal on 20.03.2020. We do not mean and hold that the Tribunal cannot grant stay beyond 365 days but that aspect we are leaving open for a decision in some other appropriate case because in the present case, even by granting extension of stay up to 19.03.2021, total stay granted by the Tribunal does not exceed 365 days and therefore, in the present case, we feel that we are not required to adjudicate this aspect of the matter i.e. amended second proviso to section 254 (2A). Stay Petitions filed by the assessee are allowed.

Summary

Issues:
Stay petitions filed by the assessee seeking stay of outstanding disputed demands for Assessment Years 2011-12 to 2018-19, applicability of second proviso to section 254(2A) of the Act, amendment in first proviso in section 254(2A) of the Act, consideration of payment made by the assessee for granting stay extension.

Analysis:
The assessee filed sixteen Stay Petitions (SPs) seeking a stay of outstanding disputed demands for eight Assessment Years spanning from 2011-12 to 2018-19. Each year had two SPs, one for the demand under section 201(1) and the other for the demand under section 201(1A) of the Income Tax Act, 1961, making a total of 16 SPs. The total disputed demand for each year was detailed in a table provided in the judgment.

During the hearing, the assessee's representative argued that the delay in appeal disposal was not due to the assessee, and stay should be granted as the payment made by the assessee exceeded 50% of the disputed demand for most years. The Revenue's representative highlighted the provisions inserted by the Finance Act, 2020, limiting the duration of stay and requiring a minimum payment of 20% of the disputed amount for granting stay.

The Tribunal considered both submissions, noting that the total stay granted would not exceed 365 days even with a slight extension. Regarding the amended first proviso in section 254(2A), the Tribunal found that the payment made by the assessee already exceeded 51% of the total disputed demand for all years, satisfying the amended provisions. The Tribunal clarified that the payment percentage should be considered from the date of raising the demand by the AO, not just post-amendment. Consequently, the Tribunal granted an extension of stay up to 19.03.2021 or till the disposal of appeals, whichever is earlier.

The Tribunal emphasized that the assessee should not request adjournments without valid reasons during the appeal hearings, as doing so would automatically vacate the stay granted. Ultimately, all Stay Petitions filed by the assessee were allowed, and the order was pronounced in open court after the completion of the hearing.