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Issues involved:
1. Stay of demand of Rs. 13,26,89,866 by the applicant-assessee. 2. Consideration of factors like financial position, interest of revenue, and prima facie case. 3. Opposition to stay application by the Sr. Deptl. Representative. 4. Offer to deposit title deeds of land as security by the applicant-assessee. 5. Interpretation of CBDT Instructions and Circulars regarding the stay of demand. 6. Exhaustion of remedies and approach to the CIT before seeking stay. 7. Decision to grant stay with specific conditions. Detailed Analysis: 1. The applicant-assessee filed a stay petition seeking to halt the demand of Rs. 13,26,89,866 following an assessment under section 143(3). The appeal against additions made in the assessment was partially successful, resulting in an aggregate demand of Rs. 18,97,38,983. The applicant had paid Rs. 5,70,49,119, leaving a balance of Rs. 13,26,89,866. The applicant faced liquidity issues due to unpaid costs, emphasizing the potential catastrophic impact of further tax payments on their operations. 2. The applicant's counsel argued for the stay based on liquidity constraints, a prima facie case against the enhancement made, and the overall crisis in the fertilizer industry. The Sr. Deptl. Representative opposed the stay, citing non-exhaustion of remedies and referred to legal precedents. The applicant offered to secure the demand by depositing title deeds of land owned by a subsidiary company. 3. The Tribunal considered various factors before granting the stay, including the balance of convenience, the applicant's financial position, interest of revenue, and prima facie case. The Tribunal referenced the decision in Dunlop India Ltd. case to highlight the importance of preventing irreparable harm. The Tribunal noted that a significant portion of the demand had already been paid, supporting the case for granting the stay. 4. The Tribunal also discussed the relevance of CBDT Instructions and Circulars, emphasizing the need to follow these guidelines in deciding on stay applications. Citing previous court decisions, the Tribunal justified the decision to grant the stay based on the substantial difference between the assessed income and the returned income. 5. Regarding the contention that the CIT was not approached before seeking the stay, the Tribunal referred to decisions by various High Courts, indicating that the power of the appellate authority to grant a stay is independent of approaching the Assessing Officer first. The Tribunal emphasized the duty to decide on the stay petition's merits and granted the stay with specific conditions, including an expedited hearing and the deposit of title deeds as security. In conclusion, the Tribunal granted the stay of the balance demand of Rs. 13,26,89,866 to the applicant-assessee, considering the financial constraints, prima facie case, and adherence to CBDT guidelines. The decision was made with specific conditions to ensure compliance and timely resolution of the appeal.
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