TMI Blog2016 (11) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... l was not disputed by the Ld. DR, but we are not going into the same at this stage. It is noted by us that in case disallowance made u/s 14A is deleted, then taxable income of the assessee gets converted into loss and therefore no demand would be left as payable. Therefore, totality of the facts of the case suggests that as on date prima facie case and balance of convenience lies in favour of the assessee. - stay granted. - SA No.340/Mum/2016, ITA No.884/Mum/2016 - - - Dated:- 30-9-2016 - Shri C.N. Prasad, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Appellant : Shri P.J. Pardiwalla (AR) For The Respondent : Shri B.S. Bist (DR) ORDER Per Ashwani Taneja (Accountant Member): This stay petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese circumstances, being aggrieved, the assessee has approached the Tribunal by way of present stay application. It has been vehemently argued by the Ld. Counsel that since facts and circumstances of the case remains the same, the AO should have granted extension of stay and since AO failed in his duty, the Tribunal should come to the rescue of the assessee and grant stay of demand thereby extending stay granted by the AO earlier. On merits, it was submitted by the Ld. Counsel that out of the total additions made by the AO, the major addition was on account of disallowance made u/s 14A of the Act, amounting to ₹ 3,57,23,70,000/-. It was submitted that most of the investments were made in the group companies for strategic reasons. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stay. 5. In rejoinder, Ld. Senior Counsel submitted that since the circumstances were quite extreme and AO had clearly stated in his order that coercive measures shall be taken in case of non-payment of demand before 30th September 2016, therefore under these circumstances, the assessee could not have taken risk of attachment of its bank account or any other similar measure by the AO which may have affected the business adversely causing irreparable damage to reputation of the assessee and its business. Therefore, urgent intervention of the Tribunal became essential in this case. Ld. Counsel summed up his argument by stating that once an stay has been granted by the AO and if facts and circumstances of the case remains the same and if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her as under: i) Filing of appeal before Hon ble ITAT against order u/s.143(3) r.w.s. 144(1) dated 28.01.2016 and stay order had been passed by the AO up to 21.09.2016. ii. Assessee has already paid 13,18,36,562/- as per the condition of the fist stay granted by the AO while granting the first stay dated 21.03.2016. iii. Delay in disposal of appeal is not attributable to the assessee. iv. No adverse change in facts and circumstances. 8. But, Ld. AO was not, inclined to extend her stay order and therefore, vide her order dated 19.09.2016 passed u/s 220(6) of the Act, she rejected the prayer of the assessee without assigning any reason and directed the assessee to pay remaining 90% of the demand before 30th Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case remains the same, then the stay must be extended as per principles of natural justice and fair play. Further, if we take into account merits of the case also, we find that the major disallowance is on account of section 14A. It has been contended by the Ld. Counsel that prima facie balance of convenience of the merits of the disallowance lies in favour of the assessee, in view of various judgments of few High Courts available on this issue. Though, the legal position cited by the Ld. Counsel was not disputed by the Ld. DR, but we are not going into the same at this stage. It is noted by us that in case disallowance made u/s 14A is deleted, then taxable income of the assessee gets converted into loss and therefore no demand would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, we find that facts and circumstances of the case before us are straight and simple. The stay has been granted by the AO himself which has been declined to be extended without assigning any reasons. Thus, the order dated 19.09.2016 u/s 220(6) of the AO is unfair, arbitrary, unjustified and contrary to law and facts. Thus, taking into all the facts and circumstances of the case, assessee is hereby granted the stay of recovery of balance demand for a period of six months or disposal of appeal pending before the Tribunal, whichever is earlier. The assessee is directed to not to seek the adjournment unless there are some reasons which are beyond the control of the assessee. Further our stay order shall have no bearing on the merits of the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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