2019 (1) TMI 294 - AT - Income Tax

Stay petition - Recovery proceedings - financial hardships - Held that - The assessee has not so far paid even a single penny against the outstanding demand of ₹ 107,80,72,470/- (comprising of tax of ₹ 69,54,77,298/- and interest of ₹ 38,25,95,173/-). Taking into account the facts and circumstances of the case, the fact that the assessee has not been able to establish before us any sort of financial hardship and the balance of convenience, we are of the view that this is a fit case for grant of stay on recovery of demand subject to the assessee paying atleast 50% of the tax demand of approx. ₹ 70 Crores. We grant stay on recovery of the demand outstanding for a period of 6 months commencing today i.e., 04.01.2019, or disposal of appeal, whichever is earlier; subject to the assessee paying an amount of ₹ 35 Crores i.e., approx. 50% of the tax demand (excluding interest of approx. 38 Crores) - Failure on the part of the assessee to comply with the above directions will result in stay being vacated automatically

Summary

Issues: Stay petition for outstanding tax demand for Assessment Year 2014-15.

Analysis:
1. The assessee, engaged in software development and IT enabled services, filed a return for Assessment Year 2014-15 declaring income. The final assessment determined a higher income due to TP adjustments and disallowances, resulting in an outstanding demand of approximately ?107.8 crores.

2. The assessee sought a stay on recovery of the demand, citing confidence in receiving relief on appeal issues and financial hardship due to business expansion. The request was opposed by the Revenue, advocating for full payment of the outstanding demand.

3. The Tribunal considered the non-payment by the assessee, lack of established financial hardship, and the balance of convenience. Stay was granted subject to the assessee paying 50% of the tax demand, approximately ?35 crores, in instalments. Failure to comply would result in automatic vacation of stay.

4. The Tribunal ordered payment of ?15 crores by 31.01.2019, ?10 crores by 28.02.2019, and another ?10 crores by 15.03.2019, totaling ?35 crores. The stay was granted for 6 months or until the appeal disposal, whichever is earlier.

5. The Tribunal scheduled an early hearing for 26.03.2019 without issuing a separate notice due to the announcement in open court. The stay petition for Assessment Year 2014-15 was partly allowed, emphasizing compliance with payment terms to maintain the stay.

This detailed analysis covers the issues presented in the stay petition judgment for the outstanding tax demand for Assessment Year 2014-15, highlighting the arguments, considerations, and the Tribunal's decision regarding the stay on recovery.