2020 (4) TMI 532 - AT - Income Tax

Stay of demand - total tax alongwith interest u/s. 220 is about 1100 crores therefore, the assessee should be directed to pay at least 50% of the outstanding demand - assessee submitted that stay should be granted to the assessee subject to the adjustment of the refund - HELD THAT - Assessee has prima facie case for grant of stay subject to certain conditions. We, therefore, without commenting upon the merits of the case, stay the outstanding demand for a period of 6 months or disposal of the appeal whichever may expire earlier subject to payment of ₹ 200 cores by the assessee to the revenue within 30 days and direct the AO to adjust the refund of ₹ 193.34 crores arising to the assessee for A. Y. 2010-11 against outstanding demand for A.Y.2014-15. The request of the assessee for out of turn hearing is also accepted and the appeal is fixed for hearing on 16.04.2020 which was announced in the open court. The assessee is hereby directed to file the paper book in advance and not to seek any adjournment under any pretext failing which the stay granted to the assessee shall stand vacated automatically.

Issues:
Stay application for outstanding demand of ?820,85,85,000 and interest u/s. 220 - Assessment order passed in the name of amalgamating company - Addition made u/s. 115 QA - Prima facie case in favor of the assessee - Financial condition of the assessee - Stay granted subject to conditions - Adjustment of refund for A.Y. 2010-11 against outstanding demand for A.Y. 2014-15.

Analysis:

1. Stay Application for Outstanding Demand:
The assessee sought a stay on the realization of the outstanding demand of ?820,85,85,000 and applicable interest u/s. 220. The counsel for the assessee argued that the assessment order mentioned the name of the assessee as "Genpact India (now merged with Genpact India Private Limited)." The counsel contended that the assessment order passed in the name of the amalgamating company instead of the amalgamated company is not valid. Additionally, the counsel argued that the provisions of section 115 QA were not applicable as the buyback of shares was beyond the purview of section 77A of the Companies Act. The counsel presented a strong prima facie case in favor of the assessee.

2. Financial Condition of the Assessee:
The Departmental Representative (DR) opposed the stay application, citing the strong case of the revenue. The DR highlighted the cash and bank balance of ?2789 million held by the assessee and the total tax along with interest amounting to about 1100 crores. The DR recommended that the assessee should be directed to pay at least 50% of the outstanding demand. However, the Tribunal, after considering the arguments from both sides, found that the assessee had a prima facie case for the grant of stay subject to certain conditions.

3. Grant of Stay and Conditions:
The Tribunal granted the stay on the outstanding demand for a period of 6 months or until the disposal of the appeal, subject to the payment of ?200 crores by the assessee to the revenue within 30 days. The Tribunal directed the Assessing Officer to adjust the refund of ?193.34 crores for A.Y. 2010-11 against the outstanding demand for A.Y. 2014-15. The request for an out-of-turn hearing was accepted, and the appeal was fixed for a specific date.

4. Conclusion:
The Tribunal disposed of the stay application based on the considerations of the prima facie case in favor of the assessee, the financial condition of the assessee, and the adjustment of the refund against the outstanding demand. The Tribunal granted the stay subject to specific conditions and directed the assessee to comply with the payment terms and hearing schedule to maintain the stay.

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