2023 (10) TMI 1423 - AT - Income Tax

Seeking stay of recovery - Request for adjournment due to pending related appeals - Determination of bona fide reasons and reasonable cause for adjournment - HELD THAT - Merely because an appeal is pending in some other assessee s case, it cannot be a ground for seeking adjournment or showing reluctance to conduct the matter in assessee s own case especially when stay has been granted to the assessee. If such a ground is considered to be bonafide and reasonable, then always on similar issues the cases may be pending at any of various benches of tribunal or at the stage of Honourable high courts and Honourable Supreme court, but because of that, in absence of any binding precedent, even if the nature of expenses are arising out of some circular, the work of court cannot come to standstill. Further, nothing was shown to us that how the decision in case of NSEIL will have a bearing on the appeal of assessee. At one point of time, Assessee argued that, such decision may have some value but issues in case of assessee are to be decided independently. Thus, it cannot be said to be a bona fides reason for seeking adjournment or even a reasonable cause for granting adjournment, with continuation of stay. We have no hesitation in following our own order of granting stay to the assessee, and following the conditions laid down for stay of demand , therefore, we are constrained and forced to vacate the stay granted to the assessee forthwith. As mentioned in the order sheet we have carefully noted and are conscious of the facts that though assessee is constantly thwarting attempt of the bench to know about the similarity of the facts, circumstances and issues in case of National stock exchange Ltd with the assessee to trace out whether there is a bona fides reason for seeking or there is a reasonable cause for granting this adjournment with continuation of stay. This attempt continued throughout the period during which at least on five occasions the coordinate bench constantly requested the assessee to produce the evidence to show that there is identical case at least on the facts and circumstances of the issue to grant assessee adjournment without vacating the stay. Assessee has constantly adopted defiant attitude by not producing any evidence to substantiate its claim. Against this, the LD CIT DR and LD AO have supported their case with Grounds of Appeal of both the parties , Annual accounts of both parties i.e. NSEIL and assessee and stated on affidavit that there are distinguishing features. In view of the above facts and circumstances, we vacate the stay granted to the assessee against recovery of outstanding demand for Ay 2015-16 and 2017-18 forthwith. We are conscious of the fact that assessee is a clearinghouse of National stock exchange where millions of investors across the globe trade into securities through huge number of brokers and intermediaries; therefore, on vacation of stay, the revenue may proceed to take coercive action against the assessee. We will not put assessee in to such a situation. As we have vacated the stay granted to the assessee, we grant one more facility to the assessee and direct it to pay the outstanding taxes in three equal instalments on 10/10/2023, 15/10/2023 and 20/10/2023. Assessee is directed to produce proof of such payments to ld AO on next day of such payments. We also give liberty to the assessee that if on any of the dates mentioned above, assessee faces any financial difficulty for payment of above instalments, assessee may immediately approach us with appropriate evidence, the necessary relaxation would be considered immediately. As the assessee is constantly harping upon the appellate order of coordinate bench in case of NSEIL, we requested the parties that can these appeals be adjourned sine die to wait for the order in case of NSEIL; LD AR objected and asked for a specific date of 05/12/2023. Thus, we accede to his request, appeals are adjourned to 05/12/2023.

Issues Involved:
1. Stay of recovery of outstanding demand.
2. Request for adjournment due to pending related appeals.
3. Similarity of issues between the assessee and another entity (NSEIL).
4. Compliance with conditions of stay order.
5. Determination of bona fide reasons and reasonable cause for adjournment.
6. Consequences of vacating the stay.

Detailed Analysis:

1. Stay of Recovery of Outstanding Demand:
The appeals in question were stay granted matters against the recovery of outstanding demands for assessment years 2015-16 and 2017-18. The stay was granted on the condition that the assessee shall not seek adjournment without bona fide reasons, and any adjournment without reasonable cause would lead to the stay being withdrawn forthwith.

2. Request for Adjournment Due to Pending Related Appeals:
The assessee requested adjournments on the grounds that the issues involved in their appeals were similar to those in the appeal of National Stock Exchange of India Ltd (NSEIL). The outcome of NSEIL's appeals was awaited, and the decision was expected to have a bearing on the assessee's appeals. The assessee sought adjournments multiple times, citing the pending decision in NSEIL's case.

3. Similarity of Issues Between the Assessee and NSEIL:
The assessee claimed that the primary issue involved was related to the disallowance of statutory contributions made to the Core Settlement Guarantee Fund (Core SGF) under SEBI regulations. The assessee argued that the issues in their appeals and those of NSEIL were "pari materia" (similar), as both arose from the same SEBI regulations and involved the same nature of contributions. However, the assessee failed to provide sufficient evidence, such as assessment orders, appellate orders, or grounds of appeal, to substantiate the similarity of issues.

4. Compliance with Conditions of Stay Order:
The bench repeatedly informed the assessee that they needed to submit necessary documents to prove the similarity of issues between their case and NSEIL's case. Despite being given multiple opportunities, the assessee did not provide the required evidence. The bench emphasized that the stay was conditional upon not seeking adjournments without bona fide reasons.

5. Determination of Bona Fide Reasons and Reasonable Cause for Adjournment:
The bench evaluated whether the assessee's request for adjournment was bona fide and based on reasonable cause. The assessee's failure to provide evidence of the similarity of issues, despite multiple requests, led the bench to conclude that the request for adjournment was not bona fide. The bench noted that merely citing the pendency of a related appeal in another case could not be considered a reasonable cause for adjournment, especially when no binding precedent was shown.

6. Consequences of Vacating the Stay:
Given the lack of evidence and the assessee's non-compliance with the conditions of the stay order, the bench decided to vacate the stay granted to the assessee. However, considering the potential impact on the clearinghouse operations and the broader market, the bench provided a structured payment plan for the outstanding taxes in three equal installments. The bench also granted the assessee the liberty to approach them for relaxation in case of financial difficulties and stayed the order vacating the stay until 20/10/2023 to allow the assessee to challenge the decision before the High Court.

Conclusion:
The bench vacated the stay granted to the assessee due to the lack of bona fide reasons and reasonable cause for adjournment. The assessee was directed to pay the outstanding taxes in installments and was given the opportunity to seek further relaxation if needed. The appeals were adjourned to 05/12/2023, and the bench stayed the order vacating the stay until 20/10/2023 to allow the assessee to challenge the decision before the High Court.

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