2013 (2) TMI 207 - HC - Income Tax

Stay application rejected - petitioner directed to pay a sum of Rs.56 crores by 31.01.2013 and thereafter the assessee shall pay Rs.10 crores per month by the last date of the month till the demand of Rs.222.76 crores was completely paid out - Held that - While in the previous year when similar issues were raised only 22% of the entire duty demanded was required to be deposited while the balance was stayed, in the present year the Tribunal has been unduly harsh on the petitioner by requiring it to deposit/adjust 60% of the tax demanded which also includes a sum of Rs.150 crores which pertain to covered issues. Since the Tribunal in the earlier years on the very same issue has conclusively indicated in the order dated 03.02.2012 that the petitioner had a prima facie case, the Tribunal in the present case ought to have also held accordingly. If that were to be the position, then the Tribunal ought not to have deviated from the practice adopted in the previous year by requiring the petitioner to make a deposit of the said sum of Rs.56 crores in addition to the adjustment of Rs.166 crores. Thus direct that no further recoveries be made against the petitioner till the disposal of the appeal by the Tribunal.

Summary

Issues:
Challenge to the order of the Income Tax Appellate Tribunal regarding stay of demand for the assessment year 2008-09.

Analysis:
The petitioner sought a stay of demand amounting to Rs.373.68 crores, out of which Rs.150.92 crores were considered covered issues by the assessing officer. The petitioner argued that a significant portion of the demanded amount had already been adjusted against refunds due, leaving only Rs.56 crores outstanding. The Tribunal, however, directed the petitioner to pay Rs.56 crores by a specified date and subsequent monthly installments, which the petitioner contended was an undue burden compared to previous years' practices.

The petitioner highlighted that in previous years with similar issues, the Tribunal had required a deposit of only Rs.125 crores out of a total demand of Rs.547.06 crores, staying approximately 78% of the demand. In contrast, for the current assessment year, the Tribunal's requirement to deposit Rs.56 crores represented a significant increase in the percentage of the demanded amount to be paid upfront. The petitioner argued that this was unfair treatment and that the Tribunal had not considered the prima facie case of the petitioner.

The counsel for the revenue supported the Tribunal's decision, emphasizing that a stay had been granted for the amount related to covered issues. However, the petitioner contended that the Tribunal's modification of the assessing officer's order was not favorable, as it prevented the adjustment of refunds against the covered issues. The petitioner urged that since the Tribunal had previously acknowledged a prima facie case in the petitioner's favor, the same treatment should have been extended in the current case.

Ultimately, the High Court directed that no further recoveries be made against the petitioner until the appeal was disposed of by the Tribunal. The Court refrained from expressing an opinion on the applicability of a previous Special Bench order to the petitioner's case, leaving it for the Tribunal to decide. The writ petition was disposed of with this direction, providing temporary relief to the petitioner pending the Tribunal's decision.