9911796707
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Issues: Stay of demand for assessment years 1996-97 and 1997-98.
Analysis: 1. The assessee, a software development and export company, claimed exemption under section 10A of the IT Act, 1961, due to being a 100% export-oriented unit in a notified free trade zone. The CIT, Jaipur, issued notices under section 263, deeming the interest earned on fixed deposits as taxable income, leading to an enhancement of total income for the assessment years 1996-97 and 1997-98. The AO subsequently modified the assessment, resulting in demands of Rs. 8,62,950 and Rs. 29,51,050 for the respective years. 2. The assessee challenged the CIT's orders before the Tribunal, seeking a stay on the outstanding demands for the mentioned assessment years. The authorized representative argued that the interest income should not be taxable, citing CBDT circulars and a judgment of the Jurisdictional High Court. The Departmental Representative, however, presented that the assessee had agreed to deposit the entire demand by a specified date and thus opposed granting a stay. 3. The Tribunal observed that the appeals filed by the assessee were against the orders passed under section 263, where no demand was created. As the demands were a result of orders under section 143(3), the matter was not under its jurisdiction. Additionally, since the assessee had committed to deposit the entire amount by a certain date voluntarily, the Tribunal declined to interfere and rejected the application for a stay of demand. The Tribunal directed the Registry to prioritize the appeals for an expedited hearing in April/May 2000.
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