Tribunal Grants Partial Stay; Assessee Must Provide Bank Guarantee for 20% of Rs. 101.5 Crores Demand, Stay for 180 Days.

The Tribunal partly allowed the stay application, directing the assessee to provide a bank guarantee for 20% of the outstanding demand of Rs. 101,50,43,635. The recovery of the demand was stayed for 180 days or until the appeal's resolution, whichever is earlier. The Tribunal emphasized the need for an early hearing and required the parties to submit necessary documents timely. It warned that unnecessary adjournments could lead to the stay order being vacated. The order was pronounced in open court on a specified date.

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Issues involved: Stay on recovery of outstanding demand of Rs. 101,50,43,635 pertaining to assessment year 2017-18.

Validity of addition giving rise to the demand:
The senior counsel for the assessee argued that the reopening of assessment under Section 147 of the Act is invalid as there is no taxable income that escaped assessment. He contended that the high assessment made based on certain information lacks merit. Despite providing evidence during proceedings, it was claimed that neither the Dispute Resolution Panel (DRP) nor the assessing officer properly examined them. Additionally, the absence of a Documents Identification Number (DIN) on the DRP directions was highlighted as a flaw rendering the final assessment order invalid. The counsel asserted that the assessee has a strong prima facie case in its favor, thus requesting a stay on the recovery of the demand and offering a bank guarantee for 20% of the outstanding amount.

Opposition to stay and direction to pay 20% of the demand:
The Departmental Representative strongly opposed granting a stay and suggested that the assessee should pay 20% of the outstanding demand.

Decision and rationale:
The Tribunal acknowledged the arguments presented but emphasized that the validity of the addition leading to the disputed demand would be considered during the appeal hearing. Notably, it was observed that the assessee did not appear during the draft assessment stage, leading to judgment based on the best available information. Despite additional evidence provided later, the assessing officer alleged non-compliance with queries during the remand proceedings. Taking into account the prima facie case, balance of convenience, and the fact that the assessee is a non-resident with no assets in India, the Tribunal directed the assessee to furnish a bank guarantee covering 20% of the outstanding demand by a specified date. The recovery of the demand was stayed for 180 days from the date of the order or until the appeal's disposal, whichever is earlier. The bank guarantee was mandated to remain valid until the appeal's resolution. Additionally, an early hearing date was set for the appeal, and parties were instructed to file necessary documents ahead of the hearing. The Tribunal cautioned against unwarranted adjournments, stating that such actions could lead to the vacation of the stay order.

Conclusion:
The stay application was partly allowed, with the Tribunal issuing specific directions regarding the bank guarantee, hearing date, and document submission timeline. The order was pronounced openly in court on a specified date.

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