Partial Stay Granted on Penalty Demand under Section 271AAB: Assessee's Financial Hardship Considered

The Tribunal partially stayed the balance penalty demand of Rs. 20,00,000 under section 271AAB of the Act, after the assessee had already paid Rs. 10,00,000. The stay was granted for 3 months or until the appeal's disposal, with a directive against seeking adjournments without valid reasons. The decision highlighted the financial hardship faced by the assessee and emphasized the need for timely compliance.

---

---

Issues Involved: Stay application against penalty demand under section 271AAB of the Act

Analysis:
1. Issue of Penalty Demand and Stay Application: The judgment deals with a stay application filed by the assessee against a penalty demand raised by the Assessing Officer under section 271AAB of the Act, which was later revised under section 154 of the Act. The total penalty demand amounted to Rs. 30,00,000.

2. Contentions of the Assessee: The Learned Authorized Representative (AR) representing the assessee submitted that the assessee had already paid Rs. 10,00,000 of the total penalty demand and requested the balance demand to be stayed until the appeal's disposal. The AR argued that the penalty had been increased from 10% to 30% due to a slight delay in filing the income tax return by 21 days. The AR further contended that the merits of the case favored the assessee, expressing hope for a favorable decision. Financial hardship was highlighted, stating the lack of liquid funds to pay the balance demand.

3. Revenue's Opposition: The Learned Departmental Representative (DR) opposed the stay petition, suggesting that the assessee should deposit at least 50% of the outstanding demand instead of seeking a stay for the balance amount.

4. Decision and Directions: After hearing both parties and reviewing the records, the Tribunal noted that the assessee had already paid 1/3rd of the total outstanding demand. The Tribunal decided to stay the balance demand for 3 months or until the appeal's disposal, whichever is earlier. Additionally, the assessee was directed not to seek adjournments without a valid reason, failing which the stay would be vacated.

5. Final Disposition: The Tribunal disposed of the stay application with the aforementioned directions, emphasizing that the order was pronounced in open court on 09/03/2018.

This judgment primarily addresses the stay application against a penalty demand under section 271AAB of the Act, outlining the arguments presented by both parties and the Tribunal's decision to partially stay the balance demand pending the appeal's outcome.

---