2024 (1) TMI 210 - AT - Income Tax

Stay on recovery of outstanding demand - DRP directions issued to the assessee does not contain a Documents Identification Number (DIN) - reopening of assessment u/s 147 challenged as in course of proceedings before the Dispute Resolution Penal, though, assessee has furnished various evidences, however, neither the DRP nor the assessing officer properly examined them. Further, as submitted, the DRP directions issued to the assessee does not contain a Documents Identification Number (DIN) - HELD THAT - We find that at the draft assessment stage, assessee did not appear resulting in completion of assessment to the best of judgment. Of course, in course of proceedings before the DRP, the assessee did furnish additional evidences. However, it is the allegation of the assessing officer that during the remand proceedings, assessee did not comply to various queries raised by him. Considering the prima facie case, balance of convenience and various other factors including the fact that the assessee is a non-resident having no assets in India, to secure the interest of the revenue, we direct the assessee to furnish a bank guarantee covering 20% of the outstanding demand. The bank guarantee shall be furnished by the assessee before the assessing officer on or before 31st October 2023. Subject to furnishing of bank guarantee, recovery of the outstanding demand shall remain stayed for a period of 180 days from the date of this order or till the disposal of the corresponding appeal, whichever is earlier. We make it clear that bank guarantee shall remain in force till disposal of the corresponding appeal. Considering the request of the learned counsel appearing for the assessee for fixing early date of hearing in the appeal, which was not opposed by the learned Departmental Representative, we direct the Registry to fix the appeal for hearing on 12.10.2023, on an out of turn basis. Paper books, if any, must be filed by the parties sufficiently ahead of the date of hearing of the appeal. Since, the date of hearing of appeal was announced in open court in presence of both the parties, separate notice of hearing need not be issued to the parties. It is made clear, in case of any adjournment being sought by the assessee without compelling reasons, there is likelihood of vacation of this order.

Summary

Issues involved: Stay on recovery of outstanding demand of Rs. 101,50,43,635 pertaining to assessment year 2017-18.

Validity of addition giving rise to the demand:
The senior counsel for the assessee argued that the reopening of assessment under Section 147 of the Act is invalid as there is no taxable income that escaped assessment. He contended that the high assessment made based on certain information lacks merit. Despite providing evidence during proceedings, it was claimed that neither the Dispute Resolution Panel (DRP) nor the assessing officer properly examined them. Additionally, the absence of a Documents Identification Number (DIN) on the DRP directions was highlighted as a flaw rendering the final assessment order invalid. The counsel asserted that the assessee has a strong prima facie case in its favor, thus requesting a stay on the recovery of the demand and offering a bank guarantee for 20% of the outstanding amount.

Opposition to stay and direction to pay 20% of the demand:
The Departmental Representative strongly opposed granting a stay and suggested that the assessee should pay 20% of the outstanding demand.

Decision and rationale:
The Tribunal acknowledged the arguments presented but emphasized that the validity of the addition leading to the disputed demand would be considered during the appeal hearing. Notably, it was observed that the assessee did not appear during the draft assessment stage, leading to judgment based on the best available information. Despite additional evidence provided later, the assessing officer alleged non-compliance with queries during the remand proceedings. Taking into account the prima facie case, balance of convenience, and the fact that the assessee is a non-resident with no assets in India, the Tribunal directed the assessee to furnish a bank guarantee covering 20% of the outstanding demand by a specified date. The recovery of the demand was stayed for 180 days from the date of the order or until the appeal's disposal, whichever is earlier. The bank guarantee was mandated to remain valid until the appeal's resolution. Additionally, an early hearing date was set for the appeal, and parties were instructed to file necessary documents ahead of the hearing. The Tribunal cautioned against unwarranted adjournments, stating that such actions could lead to the vacation of the stay order.

Conclusion:
The stay application was partly allowed, with the Tribunal issuing specific directions regarding the bank guarantee, hearing date, and document submission timeline. The order was pronounced openly in court on a specified date.