2019 (4) TMI 309 - AT - Income Tax

Tribunal Grants Stay on Tax Demand for Private Limited Company Due to TDS Non-Deduction

Sodexo SVC India Pvt. Ltd. Versus Asst. CIT (TDS) -2 (2), Mumbai

The Tribunal granted early hearing and a short stay of the outstanding demand of tax and interest for Assessment Years 2010-11 and 2011-12 for a Private ... Stay of outstanding demand of tax and interest thereon - DR submitted that absolute stay of demand should not be granted and the assessee should be asked to pay some amount of tax - assessee stated that the assessee has got 60 days time to file an appeal before the Tribunal pursuant to CIT(A)’s order and he submitted that it is understood that during that period no coercive action should be taken. - HELD THAT:- We are inclined to grant early hearing in this case and stay as under: The registry is directed to fix the case for early hearing on 25.02.2019 and short stay in this case is granted upto 25.03.3019. In the result, the stay applications filed by the assessee are disposed off as above. Issues:Stay of outstanding demand of tax and interest for Assessment Years 2010-11 and 2011-12 due to failure to deduct TDS under section 194C of the Income Tax Act, 1961.Analysis:The assessee, a Private Limited Company operating a semi closed payment system, sought stay of the outstanding demand of tax and interest for Assessment Years 2010-11 and 2011-12 amounting to significant sums. The Assessing Officer (A.O.) found the assessee to be in default for failing to deduct TDS under section 194C of the Act related to a works contract for the supply of goods. The assessee contended that the order was time-barred, having been passed after a lapse of two years. The appeal before the ld. CIT(A) challenging this was dismissed. The assessee's counsel highlighted a previous decision by the Tribunal in favor of the assessee in a similar matter, which the ld. CIT(A) had distinguished. Additionally, the counsel pointed out that the Hon'ble High Court had granted a stay in this case until a specific date. The Tribunal had also granted early hearing and a short stay in a previous year under similar circumstances.The ld. Counsel of the assessee requested an absolute stay of demand, while the ld. Departmental Representative (ld. DR) argued against granting an absolute stay, suggesting that the assessee should be required to pay some amount of tax. The counsel emphasized that the assessee had 60 days to file an appeal before the Tribunal following the ld. CIT(A)'s order and during that period, no coercive action should be taken. Given the circumstances, the counsel argued that the assessee should not be compelled to make tax payments as the ld. CIT(A)'s order was recent.After hearing both parties and examining the records, the Tribunal decided to grant early hearing and a short stay. The case was scheduled for early hearing on a specific date, with the short stay granted until a further date. The stay applications filed by the assessee were disposed of accordingly, with the order pronounced in open court on a specific date.