Tribunal clarifies stay computation: 20% on total disputed demand, not outstanding. Adverse order: no coercive action.

The Tribunal held that the computation of 20% for the stay should be based on the total disputed demand, not the outstanding demand. The matter was remitted to the Assessing Officer to verify payment of 20% of the disputed demand and grant appropriate stay. If an adverse order was issued, no coercive action could be taken against the assessee for two weeks. The stay application was allowed for statistical purposes, with no coercive action for two weeks in case of an adverse order.

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Issues: Stay on tax and interest demands under section 143(3) r.w.s. 144C for the assessment year 2019-20.

Analysis:
1. The assessee applicant sought a stay on tax and interest demands totaling Rs. 1031,46,82,967/- resulting from an assessment order under section 143(3) r.w.s. 144C of the Income Tax Act 1961 for the assessment year 2019-20.

2. The Assessing Officer directed the assessee to pay 20% of the outstanding demand as per notice under section 156 of the Income Tax Act, immediately, and file proof of filing an appeal before the ITAT. The issue arose whether the 20% computation should be based on the disputed demand or the outstanding demand. The assessee argued that they had already paid more than 20% of the disputed tax liability, hence the balance disputed demands should be stayed. The Departmental Representative suggested remitting the matter to the Assessing Officer for proper adjudication on the stay petition.

3. The Tribunal held that the computation of 20% for the stay should be with respect to the total disputed demand, not the outstanding demand specified under section 156. The matter was remitted to the Assessing Officer to verify if 20% of the disputed demand was paid, and if so, to pass an appropriate order granting stay to the assessee. If an adverse order was passed, no coercive action could be taken against the assessee for two weeks. The related appeal was scheduled for hearing on 16th November 2022 for expeditious disposal.

4. The stay application was allowed for statistical purposes based on the above terms, with no coercive action against the assessee for two weeks in case of an adverse order. The judgment was pronounced on the 3rd day of October 2022.

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