2020 (3) TMI 862 - AT - Income Tax

Extension of stay against outstanding demand by the Department - Penalty levied u/s 271AAB - HELD THAT - Earlier the appeal of the assessee was heard by the Tribunal on 7-02-2019 but it was released on account of other connected appeals of the group concerns which are required to be heard together. Tribunal noted that there is a common surrender on behalf of the group which has resulted penalty levied u/s 271AAB of the Act against all five persons of the group. Since the finding in an isolated case may have a direct bearings on the merits of the other cases which may also adversely affect the case of other group concerns, therefore, in order to avoid such a situation, the Tribunal directed the ld. CIT(A) to dispose off the appeals of other group concerns/ persons expeditiously vide order dated 30-04-2019. Despite the said directions, the appeals in the case of Shri Ashosk Chandak and Shri Naresh Choudhry are still pending for disposal before the ld. CIT(A) and penalty proceedings in the case of M/s. SMS AAMW Tollways Pvt Ltd are pending before the AO. When the lower authorities have not given any heed to the direction of the Tribunal, we find it a fit case for extension of stay against outstanding demand by the Department. The assessee cannot be put to face the harassment/ harsh treatment due to non-disposal of the appeal. Accordingly, we extend the stay for a further period of 180 days or till the disposal of the appeal whichever is earlier.

Summary

Issues involved: Extension of stay granted against outstanding demand arising from penalty under section 271AAB of the Income Tax Act, 1961.

Analysis:

1. Extension of Stay Requested by Assessee:
The assessee sought an extension of the stay granted by the Tribunal against the demand arising from penalty under section 271AAB of the Act. The assessee had already paid a significant portion of the total demand and was ready to argue the matter. However, the Tribunal had adjourned the hearing of the appeal sine die, awaiting the disposal of connected appeals by the CIT(A). The assessee argued that since the appeal was adjourned and other connected appeals were pending, the stay should be extended till the disposal of the assessee's appeal.

2. Revenue's Objection to Stay Extension:
The Revenue objected to the extension of the stay, emphasizing that the penalty under section 271AAB was related to undisclosed income and the assessee should pay the entire liability without further extension of the stay.

3. Tribunal's Consideration and Decision:
The Tribunal reviewed the submissions and the records. It noted that the earlier order had granted a stay for a specific period or until the appeal's disposal. The Tribunal highlighted that the appeal was released and adjourned due to pending appeals of other group concerns related to a common surrender and penalty under section 271AAB. Despite directions to dispose of the appeals of other group persons expediently, some appeals were still pending. The Tribunal found that the connected appeals needed to be decided before the assessee's appeal could be assessed independently. Therefore, considering the pending appeals and the fact that the lower authorities had not complied with the Tribunal's directions, the Tribunal extended the stay for a further period of 180 days or until the appeal's disposal, whichever was earlier.

4. Conclusion:
The Tribunal allowed the stay application of the assessee, emphasizing the need for a fair assessment of the appeal in light of the connected appeals and the non-disposal of pending cases. The order was pronounced in open court on 20/12/2019, and a copy was sent to the Principal Commissioner of Income Tax for necessary action.