2021 (10) TMI 512 - AT - Income Tax

Stay of outstanding demand - assessee s application u/s 154 of the Act is still pending before the assessing officer - HELD THAT - As stay of outstanding demand raised for the impugned assessment year was granted to the assessee initially vide order dated 27-01-2020 on the condition that assessee would not press for issuance of refund amounting to ₹ 22,46,40,320/-. Subsequently, the stay granted earlier was extended vide order dated 26-02-2021 on the same conditions as were imposed earlier. Though, learned senior counsel for the assessee has pleaded for variation in the conditions of stay; however, we are not inclined to do so. Reason being, assessee s application u/s 154 of the Act is still pending before the assessing officer and the actual demand as per the claim of the assessee has not yet crystallized - considering the fact that non disposal of the corresponding appeal of the assessee is not solely attributable to the assessee, we are inclined to extend the stay for a further period of 180 days or till disposal of the appeal, whichever is earlier, under the same terms and conditions on which the stay was granted earlier. AO is directed to dispose of the rectification application filed by the assessee expeditiously after providing opportunity of hearing to the assessee.

Summary

Issues:
Extension of stay of recovery of outstanding demand for the assessment year 2015-16.

Analysis:

Issue 1: Extension of stay of recovery
The assessee filed an application seeking an extension of stay of recovery of outstanding demand for the assessment year 2015-16. The Tribunal had initially granted stay on the condition that the assessee would not press for a refund of a specific amount. The senior counsel for the assessee argued that there was a mistake in computing the tax liability, resulting in a demand notice for a higher amount. The actual tax liability was claimed to be significantly lower. The assessee had also filed an application for rectification of the demand notice under section 154 of the Income Tax Act, but the assessing officer had not taken any action on it. The assessing officer had initiated penalty proceedings based on the demand raised. The counsel requested a variation in the conditions of stay or a direction to dispose of the rectification application promptly.

Issue 2: Tribunal's decision
The Tribunal considered the submissions from both sides and reviewed the records. It noted that the actual demand had not yet been finalized as the rectification application was pending. While the senior counsel requested a variation in the conditions of stay, the Tribunal decided not to alter the conditions. However, acknowledging that the delay in disposing of the appeal was not solely the assessee's fault, the Tribunal extended the stay for a further 180 days or until the appeal's disposal, whichever was earlier, under the same terms and conditions as before. The assessing officer was directed to expedite the disposal of the rectification application after providing the assessee with a hearing opportunity.

In conclusion, the Tribunal allowed the stay application, as indicated above, and pronounced the order on 08/10/2021.