2020 (11) TMI 614 - HC - Income Tax

Stay of demand - recovery proceedings - HELD THAT - As the disputed demand arises out of an issue which is covered in petitioner favour by a decision of a Coordinate Bench of this Court in DIT v. Ericsson A.B. 2011 (12) TMI 91 - DELHI HIGH COURT this Court grants a stay of the demand of Rupees twenty-nine crores, ninety-three lakhs, six hundred and three arising out of the final assessment order dated 07th February, 2020 for the relevant assessment year 2017-2018 till the disposal of the appeal pending before the CIT (Appeal). The CIT (Appeal) is directed to decide the petitioner s appeal as expeditiously as possible preferably within a period of twelve weeks. Since the appeal has been directed to be disposed expeditiously, Mr. Kamal Sawhney, learned counsel for petitioner assures and undertakes to this Court that the petitioner shall not seek refund for the Assessment Year 2016-2017 till the disposal of the said appeal.

Summary

Issues:
1. Stay of demand based on non-reasoned letter showing non-application of mind.
2. Commissioner's response to petitioner's submissions on settled issues.
3. Granting stay of demand based on favorable court decisions.
4. Assurance not to seek refund pending appeal.

Analysis:
1. The High Court observed that the impugned letter dated 20th October, 2020, regarding a stay application, lacked reasoning and failed to consider the petitioner's submissions adequately. The Court noted the need for a reasoned decision based on the facts presented.

2. The Commissioner, Income Tax, was questioned by the Court regarding any other orders or file notings addressing the petitioner's argument that the disputed demand was settled in their favor by previous court decisions. The Commissioner acknowledged that the issue was covered in the petitioner's favor by the High Court's decisions in cases like DIT v. Ericsson A.B. and DIT v. Nokia Networks OY.

3. Considering that the disputed demand was related to an issue already favorably decided by a Coordinate Bench of the High Court, the Court granted a stay on the demand amounting to Rupees twenty-nine crores, ninety-three lakhs, six hundred and three. The stay was to remain in effect until the appeal pending before the CIT (Appeal) was resolved, with a directive for expeditious disposal within twelve weeks.

4. To ensure compliance and fairness, the petitioner's counsel assured the Court that no refund would be sought for the Assessment Year 2016-2017 until the appeal process was concluded. This assurance was made in light of the stay granted on the demand and the need for a timely resolution of the appeal.

5. Consequently, with the directions given and assurances provided, the High Court disposed of the writ petition and related applications. The Court ordered the immediate uploading of the judgment on the website and the forwarding of a copy to the petitioner's counsel via email to ensure prompt dissemination of the decision.