2020 (11) TMI 264 - AT - Income Tax

Stay of demand - recovery proceedings - HELD THAT - Assessee has already paid a sum of ₹ 43.18 Lakhs out of the disputed demand of ₹ 1.85 Crores for all these three years, after the part relief granted by the CIT(A). Therefore, the payment made as claimed by the assessee after the assessment order is more than 20% of the disputed demand involved in these appeals. Since the assessee has made out prima-facie a good arguable case in these appeals and at least for the AYs.2005-06 and 2006-07 therefore when the assessee has already paid more than 20% of the disputed demand, then, the assessee deserves protection against the coercive action for recovery of the outstanding demand. Assessing Officer is restrained to take any coercive action for recovery of the balance outstanding demand for a period of three months or till the disposal of these three appeals, whichever is earlier.

Summary

Issues:
Stay applications against outstanding demand for assessment years 2005-06, 2006-07, and 2009-10 under section 153A of the Income Tax Act.

Analysis:
The assessee sought stay against the demand arising from assessment orders passed under section 153A for the mentioned assessment years. The majority of the demand was disputed due to additions made by the Assessing Officer without incriminating material found during search and seizure actions. The AR argued that as the assessment years 2005-06 and 2006-07 were not pending at the time of the search, the additions made without any incriminating material were not sustainable. The AR contended that the assessee had paid a significant amount against the demand and deserved protection from coercive recovery actions. The Department objected to the stay, claiming the additions were based on incriminating material discovered during the search. The Tribunal noted that a detailed examination was required to determine the validity of the additions. However, considering that the assessment years were not pending during the search and the assessee had paid over 20% of the disputed demand, the Tribunal granted a stay against coercive recovery actions for three months or until the disposal of the appeals.

The Tribunal acknowledged the arguments presented by both parties and emphasized the need for a detailed examination of the facts and material relied upon by the Assessing Officer. It was noted that the AR had raised valid points regarding the sustainability of the additions made without incriminating material. The Tribunal considered the payment made by the assessee, which exceeded 20% of the disputed demand, as a significant factor in granting the stay against coercive recovery actions. The Tribunal directed both parties to file necessary documents well in advance and set a hearing date for the appeals. The order allowed all the stay applications, providing temporary relief to the assessee against the outstanding demand.

In conclusion, the Tribunal granted a stay against coercive recovery actions for the balance outstanding demand for a specified period, considering the arguments presented by both parties and the payment made by the assessee. The decision highlighted the importance of a detailed examination of the facts and material before forming a final opinion on the validity of the additions made by the Assessing Officer without incriminating material.