2023 (3) TMI 139 - AT - Income Tax

Stay of demand - Direction to the assessee to pay the requisite taxed, as per Board s instruction 1914, being 20% of outstanding demand as per notice under section 156 - HELD THAT - We are of the considered view that once the Assessing Officer takes a view that in terms of the CBDT instructions, 20% of demand is to be paid by the assessee and the balance demand can, by implication, be stayed during the pendency of the first appeal, such a computation of 20% has to be with respect to total disputed demand, and not with respect to the outstanding demand specified under section 156. We, therefore, deem it fit and proper to remit the matter to the file of the Assessing Officer, for the limited purposes of verification whether 20% of the disputed demand is paid, and if so, pass an appropriate order granting the stay to the assessee on such conditions as deemed appropriate. However, if for whatever reasons, the Assessing Officer passes an order, on the stay petition, which is adverse to the assessee, AO shall not take any coercive action against the assessee for two weeks from the service of such order, so as not to pre-empt the remedial measures that the assessee may seek to pursue against the same. In the meantime, with the consent of the parties, the related appeal is fixed for hearing on 16th November 2022. The parties are directed to ensure that the necessary paper books etc. are filed in time so as to ensure expeditious disposal of this appeal on the scheduled date of hearing. Stay application is allowed for statistical purposes.

Summary

Issues: Stay on tax and interest demands under section 143(3) r.w.s. 144C for the assessment year 2019-20.

Analysis:
1. The assessee applicant sought a stay on tax and interest demands totaling Rs. 1031,46,82,967/- resulting from an assessment order under section 143(3) r.w.s. 144C of the Income Tax Act 1961 for the assessment year 2019-20.

2. The Assessing Officer directed the assessee to pay 20% of the outstanding demand as per notice under section 156 of the Income Tax Act, immediately, and file proof of filing an appeal before the ITAT. The issue arose whether the 20% computation should be based on the disputed demand or the outstanding demand. The assessee argued that they had already paid more than 20% of the disputed tax liability, hence the balance disputed demands should be stayed. The Departmental Representative suggested remitting the matter to the Assessing Officer for proper adjudication on the stay petition.

3. The Tribunal held that the computation of 20% for the stay should be with respect to the total disputed demand, not the outstanding demand specified under section 156. The matter was remitted to the Assessing Officer to verify if 20% of the disputed demand was paid, and if so, to pass an appropriate order granting stay to the assessee. If an adverse order was passed, no coercive action could be taken against the assessee for two weeks. The related appeal was scheduled for hearing on 16th November 2022 for expeditious disposal.

4. The stay application was allowed for statistical purposes based on the above terms, with no coercive action against the assessee for two weeks in case of an adverse order. The judgment was pronounced on the 3rd day of October 2022.