2020 (5) TMI 620 - AT - Income Tax

Stay petition - condition of payment to grant the stay of demand - pandemic Covid-19 situation and worldwide lockdown - limited working of courts - HELD THAT - As decided in case of M/s Steria (India) Ltd 2020 (5) TMI 444 - ITAT DELHI as taken note of such extraordinary situation, the Hon'ble Supreme Court of India in Suo Motu Writ Petition 2020 (5) TMI 418 - SC ORDER exercised the power under Article 142 read with Article 144 of the Constitution of India, and mitigated the difficulties that would be faced by the litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws by extending such period of limitation with effect from 15th March, 2020 till further orders. Similarly, Hon'ble Delhi High Court 2020 (3) TMI 1186 - DELHI HIGH COURT took suo motu cognizance of the extraordinary circumstances prevailing on account of nationwide lockdown necessitated due to the spread of COVID-19, and directed that, in all matters pending before it or any courts subordinate to it, where any interim orders concerning stay, etc. were subsisting as on 16th March, 2020 and which were to expire thereafter, the same shall stand automatically extended till 15th May, 2020 or until further orders. As in the present case the stay already granted by the Tribunal vide order dated 8th November, 2020 stood extended till 15th June, 2020.

Summary

Issues:
Extension of stay granted in previous orders for assessment years 2010-11, 2012-13, and 2013-14; Applicability of amended provision under section 254(2A) of the Income Tax Act, 1961; Impact of delay in disposal of appeal on the extension of stay; Consideration of Central action plan issued by CBDT; Interpretation of previous orders and judgments regarding the payment condition for granting stay.

Analysis:
The judgment pertains to the extension of stay granted in previous orders for assessment years 2010-11, 2012-13, and 2013-14. Initially, a conditional stay was granted, but upon the direction of the Honorable Delhi High Court, the Tribunal reconsidered and granted stay without requiring any deposit. The Tribunal consistently decided not to levy any payment condition for granting the stay, except for a few specific issues in the case.

The issue of applicability of the amended provision under section 254(2A) of the Income Tax Act, 1961 was raised. The counsel for the assessee argued that the amendment introduced by the Finance Act, 2020, regarding the payment of 20% of the demand or furnishing equivalent security, does not apply to the current case seeking an extension of the existing stay. The counsel emphasized that the delay in appeal disposal was not due to the assessee's conduct, justifying the extension of stay.

Regarding the impact of the delay in disposal of the appeal on the extension of stay, the counsel highlighted the restricted functioning of the Tribunal due to the nationwide lockdown by the Government of India. The counsel referred to the Central action plan issued by the CBDT, emphasizing the need to consider the prevailing situation in the country while deciding on the extension of stay.

The interpretation of previous orders and judgments regarding the payment condition for granting stay was crucial. The Tribunal considered the orders of the Honorable Supreme Court and the Honorable High Court, which led to the automatic extension of the stay until a specified date. In light of these legal positions, the Tribunal extended the stay granted on 08/11/2019 until 15/6/2020, aligning with the order of the Honorable Delhi High Court dated 15th May 2020.

In conclusion, the Stay Petitions of the assessee were allowed, and the stay granted on 08/11/2019 was extended until 15/6/2020, as per the order of the Honorable Delhi High Court.