Extension of Stay Granted for Tax Demand, High Court Extends Time Limit for Interim Stay Orders

The Tribunal granted an extension of stay on the recovery of an outstanding demand for A.Y. 2014-15, requiring the applicant to deposit 15% of the demand and adjusting the remaining 5% from the refund. The High Court extended the time limit for interim stay orders due to the COVID-19 outbreak. The Tribunal extended the stay for 180 days or until appeal disposal, with the condition that any adjournment requests may vacate the stay, considering the compliance of the applicant and the circumstances leading to the delay in appeal disposal.

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Issues:
Extension of stay on recovery of outstanding demand for A.Y. 2014-15.

Analysis:
The applicant sought an extension of the stay on the recovery of an outstanding demand of Rs. 13,49,85,350 for A.Y. 2014-15. Previously, the Tribunal had stayed the recovery subject to the condition that 15% of the rectified demand of Rs. 15,88,06,350 be deposited by the assessee. The applicant complied by depositing Rs. 2,38,21,000, which was 15% of the demand, within the stipulated time frame.

The stay on recovery was extended by the Tribunal on 06.09.2019 due to pending appeals related to A.Y. 2013-14. The applicant's appeal for A.Y. 2014-15 was scheduled for 04.03.2021. As the stay was expiring, the applicant filed for an extension on 03.03.2020. The Tribunal, in its order dated 13.03.2020, directed the AO to adjust any refund accrued from A.Y. 2012-13 against the outstanding demand for A.Y. 2014-15. The Tribunal noted that 15% of the demand had been paid by the applicant and directed the adjustment of the remaining 5% from the refund.

Due to the COVID-19 outbreak, the High Court extended the time limit for interim stay orders multiple times. The applicant filed for an extension considering these circumstances. The applicant argued that as the delay in appeal disposal was not due to any fault of theirs, and as 20% of the demand had been deposited or was with the government, the stay extension was justified.

The Departmental Representative had no objection to extending the stay if 20% of the demand had been deposited. The Tribunal reviewed the orders of lower authorities and previous stay extensions. It noted the compliance of the applicant in depositing 15% of the demand and the pending adjustment of the remaining 5% from the refund. The Tribunal found that the delay in appeal disposal was not the fault of the applicant and deemed that 20% of the demand had been effectively deposited. Consequently, the Tribunal extended the stay for 180 days or until appeal disposal, whichever is earlier, with a condition that any adjournment requests may vacate the stay.

In conclusion, the Tribunal granted the extension of stay on the recovery of the outstanding demand for A.Y. 2014-15 based on the compliance of the applicant, the pending adjustment from the refund, and the circumstances surrounding the delay in appeal disposal.

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