2021 (4) TMI 710 - AT - Income Tax

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 ... Stay demand - stay on the recovery of the outstanding demand was granted by the Tribunal subject to a rider that 15% of the rectified demand shall be deposited by the assessee on or before 31st March, 2019 - HELD THAT:- Post extension of the stay on the recovery of the outstanding demand the hearing of the appeal for the year in question i.e A.Y. 2014-15 was adjourned from time to time, for the reason, that the assessee’s appeal for A.Y. 2013-14 which involved an issue having a direct bearing on the disposal of the appeal for the year in question was pending before the Tribunal. On an application filed by the assessee seeking extension of the stay on the recovery of the outstanding demand, the Tribunal, vide its order dated 13th March, 2020 was pleased to allow the same. At this stage, we may herein observe that the Tribunal while extending the stay on the recovery of the outstanding demand vide its aforesaid order dated 13th March, 2020, had after taking cognizance of the fact that the assessee had already paid 15% of the outstanding demand for the year in question, had therein directed the A.O to recover/adjust the balance 5% of the outstanding demand from the refund that had accrued pursuant to the order passed by the Tribunal in its case for A.Y. 2012-13. As pointed out by the ld. A.R the department despite the aforesaid specific direction had failed to carry out the necessary adjustment till date. Be that as it may, in our considered view as the delay in disposal of the appeal for the year in question cannot be attributed to any lapse or failure on the part of the assessee, and an amount of 20% of the outstanding rectified demand in the backdrop of the aforesaid directions which were given by the Tribunal on the last occasion while extending the stay on the recovery of the outstanding demand vide its order dated 13th March, 2020 can safely be held to have been deposited by the assessee, therefore, in our considered view the application filed by the assessee for extension of the stay on the recovery of the outstanding demand for the year in question i.e A.Y. 2014-15 merits acceptance. We herein extend the stay on the recovery of the outstanding demand for a period of 180 days from the date of this order or till the disposal of the appeal, whichever is earlier. Before parting, we may herein observe that in case the assessee at any stage seeks an adjournment except for certain unavoidable reasons then the extension of stay granted vide the present order shall stand vacated. 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.