2025 (1) TMI 1008 - AT - Income Tax

Stay for outstanding demand u/s 10(3) and u/s 12 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 - penalty u/s 42 of the BMA for the assessment year 2016-17 and penalty u/s 41 and 43 of the BMA for 2017-18 - HELD THAT - On perusal of contents of the stay petitions filed by the appellant we are of the considered view that the assessee has made out a prima facie case and also balance of convenience in its favour. The appellant also partly paid Rs. 2, 15, 08, 248/- out of 20% taxes/penalties demands (Rs. 5, 73, 10, 158/-) which is evident from chart filed for the assessee. We also conciously note that the appellant has offered balance being Rs. 3, 58, 01, 910/- out of the 20% towards disputed demand for two assessment years will be paid in three installments on or before the 31.03.2025. Therefore appellant has given assurance that the appellant will satisfied the balance payment of 20% disputed demand on or before 31.03.2025 in our considered view it is a fit case for granting stay for balance outstanding demands. Thus we stayed the balance outstanding demand for a period of 6 months from the date of this order or till disposal of the appeals filed by the assessee whichever is earlier. Appeals filed by the assessee are posted for hearing on 03.02.2025 for which no separate notice shall be issued to both sides. Stay Applications filed by the assessee are allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the assessee is entitled to a stay on the outstanding tax demand for the assessment years 2016-17 and 2017-18 under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ("BMA").
Whether the partial payment and proposed installment plan offered by the assessee meet the statutory requirements for granting a stay of the outstanding demand.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Stay on Outstanding Tax Demand

Relevant Legal Framework and Precedents: The legal framework involves Section 10(3), Section 12, Section 41, Section 42, and Section 43 of the BMA, which pertain to the imposition of tax and penalties on undisclosed foreign income and assets. Additionally, Section 18(7) of the BMA read with the first proviso to Section 254(2A) of the Income Tax Act, 1961, provides the context for stay applications.
Court's Interpretation and Reasoning: The court interpreted that the assessee had made a prima facie case for a stay, considering the partial payment already made and the proposed installment plan for the remaining amount. The court emphasized the balance of convenience being in favor of the assessee.
Key Evidence and Findings: The court reviewed the chart submitted by the assessee, detailing the demands raised, amounts paid, and the proposed schedule for the remaining payments. The chart showed that the assessee had already paid or adjusted a significant portion of the 20% of the disputed demand.
Application of Law to Facts: The court applied the relevant sections of the BMA and the Income Tax Act to the facts presented, concluding that the statutory requirements for granting a stay were met by the assessee's partial payment and commitment to pay the remainder in installments.
Treatment of Competing Arguments: The respondent, represented by the JCIT, agreed to the stay subject to verification of the statutory requirement of payment. The court considered this concurrence in its decision to grant the stay.
Conclusions: The court concluded that the assessee had fulfilled the conditions necessary for a stay of the outstanding demand, subject to the payment of the remaining amount in installments by the specified date.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "We are of the considered view that the assessee has made out a prima facie case and also balance of convenience in its favour."
Core Principles Established: The decision underscores the principle that a stay on tax demands can be granted when a prima facie case is made, and the balance of convenience favors the applicant, provided that statutory payment requirements are met or agreed upon.
Final Determinations on Each Issue: The court granted the stay on the outstanding demands for a period of six months or until the disposal of the appeal, whichever is earlier, subject to the condition that the assessee pays the remaining amount in three installments by March 31, 2025.

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