9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (4) TMI 977 - AT - Income TaxStay on recovery of the outstanding demand - HELD THAT - Despite earlier directions given by ITAT while granting conditional part stay of outstanding demand of income-tax and interest to recover and adjustment of Rs. 39 crores from the refund due to the assessee against outstanding demand of income-tax and interest due thereon the said recovery and adjustment of Rs. 39 crores has not been done by the Revenue. The AO shall take immediate steps to recover and adjust Rs. 39 crores from the refund due to the assessee otherwise the assessee is directed to deposit the said amount of Rs. 39 crores if no refund is due and payable to the assessee. The AO shall adjust the same against the outstanding demand of income-tax and interest thereon. The assessee on its part shall also co-operate with the AO to submit relevant information w.r.t. adjustment of refunds claimed to be due to the assessee to the tune of Rs. 39 crores or otherwise the assessee shall make payment/deposit of Rs. 39 crores with Revenue/Government if no refund is found to be due and payable to the assessee We stay recovery of remaining outstanding demand towards income-tax and interest thereon of Rs. 230.97 crores vide this order in stay application for a period of 180 days or till the disposal of the appeal which ever is earlier with the condition that Rs. 39 crores be adjusted/deposited towards the outstanding demand. The stay on recovery of aforesaid outstanding demand will become effectively operational on recovery and adjustment of Rs. 39 crores either by adjustment of refund or deposit by assessee as directed by us as above. AO will take immediate steps towards the same. The appeal was adjourned sine-die as the issue involved in this appeal concerns issue of DIN and the same shall continue to be so till application for fixation of hearing is moved.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in this stay application include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Entitlement to Stay on Recovery of Outstanding Demand Legal Framework and Precedents: The Tribunal exercises discretionary power to grant stay of recovery under the Income Tax Act, balancing the assessee's prima facie case and the Revenue's interest. Earlier stay orders dated 09.09.2022, 17.03.2023, and 22.09.2023 had granted conditional stay on recovery subject to adjustment of Rs. 39 crores refund against the demand. Court's Interpretation and Reasoning: The Tribunal found that the assessee has made out a prima facie case for conditional stay of recovery of the outstanding demand of income-tax and interest. The Tribunal refrained from commenting on the merits of the additions but acknowledged the assessee's submissions regarding the nature of disputed additions. Key Evidence and Findings: The assessee's cooperation in appellate proceedings and the history of conditional stay granted earlier were noted. The failure of the Revenue to adjust Rs. 39 crores refund as directed was a significant factor. Application of Law to Facts: The Tribunal ordered that the stay would be granted on the same terms as previously, contingent on the adjustment or deposit of Rs. 39 crores towards the outstanding demand. Immediate steps were directed to be taken by the Assessing Officer (AO) for this purpose. Treatment of Competing Arguments: The Revenue submitted that the adjustment of Rs. 39 crores refund had not been done and urged continuation of stay on similar terms. The Tribunal agreed but emphasized the necessity of adjustment or deposit of Rs. 39 crores as a pre-condition. Conclusion: Conditional stay of recovery of Rs. 230.97 crores (remaining after Rs. 39 crores adjustment) granted for 180 days or till disposal of appeal, whichever earlier. Issue 2: Legality of Additions to Income Legal Framework and Precedents: Additions to income are subject to scrutiny under relevant provisions of the Income Tax Act and accounting standards such as Ind AS-105. The principle of consistency in stock valuation and avoidance of double taxation is well established. The Supreme Court's judgment in CIT v. Brandix Mauritius Holdings Limited was cited regarding procedural compliance and validity of notices. Court's Interpretation and Reasoning: The Tribunal refrained from adjudicating on the merits but recorded the assessee's contentions that:
Key Evidence and Findings: The assessee submitted details of asset transfer, accounting treatment, and rectification application for interest addition. The DRP had directed verification of these claims, but the AO proceeded with additions. Application of Law to Facts: The Tribunal noted these claims but did not express opinion on their validity, as the stay application is concerned only with recovery, not merits. Treatment of Competing Arguments: The Revenue maintained the additions were justified. The Tribunal's approach was to maintain neutrality on merits pending appeal disposal. Conclusion: No decision on merits; issues to be decided in main appeal. Issue 3: Validity of DRP Order and Intimation Letter Concerning Documentation Identification Number (DIN) Legal Framework and Precedents: Circular No. 19/2019 dated 14.08.2019 mandates issuance of valid DIN for notices/orders to be valid. The Supreme Court's Brandix judgment emphasized compliance with procedural requirements including DIN for validity of notices. Court's Interpretation and Reasoning: The Tribunal acknowledged the assessee's challenge to the DRP order and intimation letter on grounds of absence of valid DIN, rendering them invalid and bad in law. Key Evidence and Findings: The appeal was adjourned sine die due to the DIN issue, reflecting the procedural significance of this challenge. Application of Law to Facts: The Tribunal recognized that the procedural defect may impact the validity of the DRP order and intimation, thus affecting the assessment proceedings. Treatment of Competing Arguments: The Revenue sought adjournment citing the DIN issue, implicitly conceding its relevance. Conclusion: The DIN issue is a live procedural challenge, leading to adjournment of appeal sine die. Issue 4: Adjustment or Deposit of Rs. 39 Crores Refund Against Outstanding Demand Legal Framework and Precedents: The Tribunal's earlier orders mandated adjustment of refund against outstanding demand as a condition precedent for stay. This principle ensures partial recovery while preserving assessee's rights during appeal. Court's Interpretation and Reasoning: The Tribunal emphasized that despite earlier directions, the AO had not adjusted the Rs. 39 crores refund. It directed immediate steps for adjustment or, if no refund is due, deposit by the assessee. Key Evidence and Findings: The assessee's cooperation and submissions regarding refund claims were noted. Application of Law to Facts: The Tribunal made the stay conditional on this adjustment/deposit, making the stay effective only upon compliance. Treatment of Competing Arguments: Both parties agreed on the necessity of this condition, and the Tribunal enforced it. Conclusion: Rs. 39 crores must be adjusted or deposited immediately to activate the stay. 3. SIGNIFICANT HOLDINGS The Tribunal held:
Core principles established include:
Final determinations on each issue are:
|
