2020 (2) TMI 1094 - AT - Income Tax

Extension of stay on realization of outstanding demand - HELD THAT - Assessee does have a prima facie case and balance of convenience is in its favour for extension of stay since there is no change in the facts and circumstances from the stay extended earlier till today and the delay in non-disposal of the appeal is not attributable to the assessee. Further, the Tribunal, in assessee s own case in the earlier year, has decided both the issues in favour of the assessee and one of the issues i.e., disallowance of supplementary rent stands decided in favour of the assessee by the decision of the Hon'ble Delhi High Court in assessee s own case and the SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court Further, if MAT credit as claimed by the assessee is given, then, there will be a refund due to the assessee. Considering the totality of the facts of the case we extend the stay of realization of outstanding demand for a further period of six months or till the disposal of the appeal whichever is earlier. Since the assessee does not intend to pursue as an intervenor in the matter before the larger Special Bench at Mumbai, the instant appeal is thus ripe for hearing. We, therefore, with the consent of both the sides, fix the appeal for hearing on 4th May, 2020 which was announced in the open court. It was further announced that no separate notice of hearing shall be sent to which both the parties agreed. The Stay Application filed by the assessee is accordingly allowed.

Summary

Issues:
Stay extension on outstanding demand, delay in appeal disposal, financial position explanation, MAT credit allowance, plea rejection, intervenor status, prima facie case, balance of convenience, refund due.

Stay Extension on Outstanding Demand:
The assessee requested the Tribunal to extend the stay on the realization of an outstanding demand of ?115,46,26,840. The counsel argued that the delay in appeal disposal was not due to the assessee, and there were no changes in the facts. The Tribunal had previously ruled in favor of the assessee on certain issues, including disallowance of supplementary rent. The Tribunal extended the stay for a further six months or until the appeal's disposal.

Delay in Appeal Disposal:
The delay in the disposal of the appeal was not attributed to the assessee, as issues had been referred to a larger Special Bench in Mumbai. The Tribunal considered the previous decisions in the assessee's favor and the dismissal of the Revenue's SLP by the Supreme Court. The Tribunal found a prima facie case in favor of the assessee and extended the stay on the outstanding demand.

Financial Position Explanation:
The Revenue opposed the stay application, arguing that the assessee had not adequately explained its financial position. The Revenue also raised concerns about the applicability of MAT credit to the assessee. However, the Tribunal found that the assessee had a prima facie case and extended the stay based on the balance of convenience.

MAT Credit Allowance:
The counsel for the assessee referred to a decision by the Delhi Bench of the Tribunal to support the extension of stay, emphasizing that the mere ability to pay taxes did not preclude the grant of a stay. The Tribunal considered the arguments and decided to allow the stay application.

Plea Rejection and Intervenor Status:
The counsel for the assessee rejected the plea of the Revenue and stated that the assessee was no longer interested in becoming an intervenor in the matter before the Mumbai Special Bench. The Tribunal, therefore, proceeded with the appeal hearing without waiting for the Mumbai Special Bench's decision.

Prima Facie Case and Balance of Convenience:
After considering the arguments from both sides, the Tribunal found that the assessee had a prima facie case in its favor. The Tribunal also determined that the balance of convenience favored extending the stay on the outstanding demand. Consequently, the Tribunal allowed the stay application and scheduled the appeal for a hearing.

Refund Due:
If the MAT credit claimed by the assessee was allowed, there would be a refund due to the assessee. The Tribunal took this into account while deciding to extend the stay on the outstanding demand.

In conclusion, the Tribunal allowed the Stay Application filed by the assessee, extending the stay on the realization of the outstanding demand. The decision was made based on the prima facie case in favor of the assessee, the balance of convenience, and the absence of changes in the facts from the previous stay extension.