2019 (6) TMI 39 - AT - Income Tax

Tribunal Grants Stay on Penalty, Allows Appeal Hearing, Assessee's Case Prima Facie

M/s Quippo Telecom Infrastructure Pvt. Ltd. Versus ACIT, Circle 19 (1), C.R. Bldg., New Delhi

The Tribunal granted a stay on the outstanding demand of Rs. 125,00,000 in penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961. The ... Stay of demand - Penalty u/s. 271(1)(C) - disallowance of interest of expenses and disallowance of professional fees - HELD THAT:- The assessee has established the prima facie case in its favour and also balance of convenience is in its favour for grant of stay on the balance outstanding demand in dispute in respect of the AY 2010-11. Accordingly we grant the Stay on the outstanding demand in dispute for the period of 180 days or till the disposal of the aforesaid main appeal, whichever occurs first and also direct the AO not to take any coercive action against the assessee during the stay period or till the disposal of the appeal, whichever occurs first. Also in the interest of justice, the Registry is directed to fix the main appeal of AY 2010-11 for hearing on 15.07.2019. Since the date of hearing is pronounced in the Open Court, hence, there is no need to send the notice for hearing. However, the copy of this Order be given to both the parties DASTI. Issues: Stay of outstanding demand in penalty proceedings u/s. 271(1)(c) of the Income Tax Act, 1961.Detailed Analysis:1. Stay Application u/s 35A of ITAT Rules, 1963: The assessee filed a Stay Application seeking a stay of the balance outstanding demand of Rs. 125,00,000 arising from penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 due to disallowance of interest expenses and professional fees.2. Arguments by the Senior Counsel: The Senior Counsel for the assessee argued that the penalty was initiated without specific charges highlighted by the Assessing Officer (AO). He contended that there was inconsistency in the levy of charges and that the disallowance of interest should be allowed under section 57(iii) as it was directly related to the earning of interest. The counsel requested a stay on the outstanding demand for 180 days or until the disposal of the main appeal.3. Opposition by CIT(DR): The CIT(DR) opposed the stay application, stating that the penalty was imposed for furnishing inaccurate particulars as per the assessment and penalty orders. Additionally, the CIT(A) had confirmed the disallowance on merits.4. Tribunal's Decision: After hearing both parties and examining the records, the Tribunal found that the assessee had established a prima facie case in its favor. The Tribunal granted a stay on the outstanding demand for 180 days or until the disposal of the main appeal. The AO was directed not to take any coercive action during the stay period. The Tribunal also scheduled the main appeal for hearing on 15.07.2019 without the need for a separate notice.5. Disposition of Stay Application: The Tribunal disposed of the assessee's Stay Application as per the directions given, ensuring that the balance of convenience favored the assessee in granting the stay and scheduling the main appeal for an expedited hearing.In conclusion, the Tribunal's judgment granted the stay on the outstanding demand in dispute, provided directions for the AO, and scheduled the main appeal for an early hearing, ensuring fairness and justice in the proceedings.