2020 (3) TMI 42 - AT - Income Tax

Stay on collection/recovery of outstanding tax and interest amount - demand created as a result of assessment under section 143(3) r.w.s. 144C (13) - HELD THAT - No case is made out that by making the partial payment of demands, as directed by the learned Commissioner, the assessee will be subjected to any serious and undue hardship. There is nothing to show that any significant inconvenience will be caused to the assessee in complying with the conditions imposed by the learned Commissioner, while granting the partial stay, or that the order of the learned Commissioner, in so granting the partial stay, is perverse or unreasonable. In these circumstances, we are not inclined to interfere in the matter so far as grant of stay is concerned. In today's world of ultrafast banking transactions, it is difficult to believe that a period of 15 days is less than sufficient to organize an inward foreign remittance, and it is not even the case of the assessee that the assessee has paucity of funds. In any event, it is open to the assessee to point out all the related facts to the Commissioner, and seek appropriate relaxations as he may be advised. Suffice to say that in the absence of any perversity or any unreasonableness on the part of the With the consent of the parties, however, we have posted the matter for an out of turn hearing on 24th February 2020.

Summary

Issues involved:
1. Stay on collection/recovery of outstanding tax and interest amount.
2. Application for out of turn hearing of the appeal.
3. Prima facie case in favor of the assessee.
4. Financial position of the assessee.
5. Grant of stay by the Commissioner of Income Tax.
6. Interference by the Income Tax Appellate Tribunal.
7. Conditions for granting stay on collection/recovery of demands.
8. Powers of the Tribunal to grant stay during the pendency of appeal.
9. Reasonableness of the Commissioner's decision.
10. Dismissal of the stay application.

Detailed Analysis:
1. The assessee applicant sought a stay on the collection/recovery of outstanding tax and interest amount totaling ?22,60,83,354, related to the demand from the assessment under the Income Tax Act, 1961, for the assessment year 2015-16. The applicant also requested an out of turn hearing of the appeal challenging the demand.

2. The Commissioner of Income Tax had already granted a stay on the disputed demands until a specified date, subject to the condition of paying 30% of the demand by a certain deadline. The Tribunal questioned the need for further intervention unless there were genuine hardships or perversity in the stay granted by the Commissioner.

3. The assessee's counsel presented arguments to establish a strong prima facie case, emphasizing the company's structure, investments, and the reasoning behind the disputed tax treatment. The counsel contended that the Assessing Officer's decision was legally unsustainable, highlighting the company's financial stability and the need for time to arrange funds for payment.

4. The Tribunal refrained from commenting on the appeal's merits but did not find the case overwhelmingly in favor of the assessee to warrant a complete stay, emphasizing the need for a strong prima facie case for such relief.

5. Referring to precedents, the Tribunal highlighted that the power to grant stay should not be exercised routinely and only in deserving cases where the appeal's purpose would be frustrated by allowing recovery proceedings to continue. The Tribunal indicated that unless there was perversity or unreasonableness in the lower authorities' decisions, interference was unwarranted.

6. Despite posting the matter for an out of turn hearing, the Tribunal ultimately dismissed the stay application, citing the absence of significant inconvenience or hardship for the assessee in complying with the conditions imposed by the Commissioner.

7. The Tribunal's decision was based on the lack of perversity or unreasonableness in the Commissioner's grant of partial stay, emphasizing the need for strong grounds to interfere in such matters.

8. The Tribunal clarified that the powers to grant stay during the appeal's pendency should not be exercised routinely based solely on prima facie merits, and there was no indication that the partial payment directed by the Commissioner would cause serious hardship to the assessee.

9. The Tribunal concluded that the Commissioner's decision was reasonable, and without any perversity, there was no basis for the Tribunal to intervene in the grant of stay, especially considering the modern banking capabilities for fund transfers.

10. The stay application was ultimately dismissed, with the matter scheduled for an out of turn hearing, directing parties to ensure timely preparation for the appeal's disposal.