TMI Blog2020 (9) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... dated first of January 2020, the interest of the revenue is grossly hampered if the assessee is granted further stay of demand, despite assessee paying further ₹ 5 crores towards the outstanding dues. In view of the above situation, it is not even worth mentioning state of affairs of the assessee and further litigations shown to us by the learned authorised representative for extension of the stay. Even assuming while denying, the assertions made by the learned authorised representative that assessee has a strong prima facie case, we are not inclined to grant further stay of the above demand advocate the stay already granted forthwith. It is further to note that subsequent to the order of the coordinate bench dated first of January 2020, of all these financial affairs were not brought to the notice of the coordinate bench either by the assessee or by the revenue. Therefore on looking at the overall compactus of the fact of the issue involved in the appeal, the financial status of the company appellant petitioner, the present status of the working of the company, known disclosure of the financial statements of the subsidiaries whose investments have been written of, kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the proposed draft order. Pursuant to the aforesaid directions of the DRP, assessment was completed vide order dated 29.01.2016 passed under section .143(3) r.w.s 144C of the Act, assessing the total income of the assessee at ₹ 207,95,55,288, after making several additions/ disallowances. As a result of the aforesaid order passed under section 143(3), of the Act, income tax demand of ₹ 108 crores has been raised on the applicant, which comprises of the following: Income-tax ₹ 69,07,76,277 Interest ₹ 38.92,25.263 Total ₹ 108,00,01,540 03. Against the aforesaid assessment order, the applicant has filed appeal before the Tribunal challenging various additions/ disallowances, which is currently pending for adjudication. As a result of the assessment order passed under section 143(3) r.w.s. 144C of the Act, income tax demand of ₹ 108 crores has been raised on the applicant, comprising of the following: Income-tax ₹ 69,07,76,277 Interest ₹ 38.92,25,263 Total ₹ 108,00,01,540 04. Only two issues are involved in the appeal. a. First issue is a transfer pricing adjustment on account of corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, due to the ongoing COVID-19 pandemic and the consequent nationwide lockdown, the matter could not be taken up for hearing on April 15, 2020. The next date of hearing is yet to be notified. The applicant filed application seeking stay of the outstanding demand before the Deputy Commissioner of Income Tax- Circle-16(l), New Delhi. The Tribunal vide order dated 2.3.2016 (hereinafter referred to as First Stay Order ) in stay application No. 111/Del/2016, granted stay of outstanding demand for six months or disposal of appeal whichever is earlier, subject to payment of ₹ 15 crore. The applicant vide challans dated 21.3.2016, 30.3.2016, 13.4.2016 and 29.4.2016 complied with the terms of stay order dated 2.3.2016. Subsequently, the aforesaid stay was extended by the Tribunal from time to time as under: a) For 6 months vide Second Stay Order dated 9.9.2016 (Stay Application No. 413/Del/2016) b) For 6 months vide Third Stay Order dated 3/3/2017 (Stay Application No. 133/Del/2017) c) For 6 months vide Fourth Stay Order dated 8/9/2017 (Stay Application No. 502/Del/2017) d) For 6 months vide Fifth Stay Order dated 9/3/2018 (Stay Application No. 145/Del/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, held that where any interim orders in the nature of stay, bail, paroles, etc., have been passed in favor of parties by the Hon ble Court and courts subordinate to it, and such orders were subsisting on 16.03.2020, the operation of such orders shall stand automatically extended to 15/5/2020 or till further orders. In the present case, considering that stay granted by the Tribunal vide order sheet dated 21.01.2020 was subsisting on 16.03.2020, in view of the aforesaid orders of the Hon ble Supreme Court and the Hon ble Delhi High Court, the operation of stay granted by the Tribunal, thus, automatically stood extended to 15.05.2020. Considering that the period of stay granted vide Order sheet dated 21.01.2020 as extended by the aforesaid orders of the Hon ble Supreme Court and Hon ble Delhi High Court was expiring on 15.05.2020, the present application is being filed for further extension/ grant of stay of demand till the disposal of appeal by the Tribunal or for such further period, as the Tribunal may deem fit. The applicant has been diligently pursuing the appeal and delay in disposal of the appeal, is not at all attributable to the applicant. For the sake of conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered these contentions in detail. The submission of the revenue is to the financial status of the assessee is not controverted. On the other hand it could be seen from the record that the assessee is also covered by the proceedings u/s 19 of the recovery of the debts and bankruptcy act, 1993 initiated by the banker, namely excess bank Ltd before the debt recovery tribunal and the order passed by such a forum. Record further speaks that the balance sheet, the profit and loss account and its cash flow statement as at 31st of March 2018 were not even signed by the directors. Further there is a consent agreement dated 1/10/2019 and the amendment thereof on 19/11/2019 entered into between the excess bank and the renegade group, in terms of which a settlement was reached pricing the illegal group to pay the settlement amount of ₹ 1 70 crores in three instalments, with the last instalment of ₹ 85 crores payable on or before 30 June 2020. Pursuant to such consent agreement, the debt recovery tribunal passed order dated 1/10/2019 recording the fact of consent agreement. It is not the case of the assessee that the assessee is financially sound. 5. On careful consideration of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record the hardship of the assessee complying with the stay order dated 1/1/2020 in stay application number 1096/del/2019 as assessee has already been restrained by DRT from creating any lien over the assets. Since, regular CIT (DR) is not available therefore one more opportunities given to the learned CIT (DR) to find out the fact to whether of special bench for corporate guarantee is required to be constituted or not, by the next date of hearing failing which the case self be fixed for regulating hearing by the bench itself. Keeping in view of the hard ship faced by the assessee, on account of DIT order dated 1/10/2019 the revenue was restrained from making any coercive recovery from the assessee till the next date of hearing on 15/1/2020. 11. On 16/1/2020 as the learned CIT DR sought and adjournment the hearing was adjourned to 21/1/2020. The revenue was restrained for making any coercive recovery from the assessee till the next date of hearing on 21/1/2020. 12. On 21/01/2020, the bench further noted that the case of the JPMorgan Chase bank which is fixed for special bench Mumbai is now listed on 13 February 2020. In view of the same, the matter is adjourned to 24/2/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of the subsidiary company and mainly the loss arising on account of writing of the permanent diminution in the value of the investment in the subsidiaries of the company of ₹ 1772 crores, it cannot be measured whether the assessee has anything to pay to the government of India towards this tax dues. In this situation, as per the order of the coordinate bench dated first of January 2020, the interest of the revenue is grossly hampered if the assessee is granted further stay of demand, despite assessee paying further ₹ 5 crores towards the outstanding dues. In view of the above situation, it is not even worth mentioning state of affairs of the assessee and further litigations shown to us by the learned authorised representative for extension of the stay. Eeven assuming while denying, the assertions made by the learned authorised representative that assessee has a strong prima facie case, we are not inclined to grant further stay of the above demand advocate the stay already granted forthwith. It is further to note that subsequent to the order of the coordinate bench dated first of January 2020, of all these financial affairs were not brought to the notice of the coordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t s direction is not applicable to the Tribunal in particular. We have gone through all the directions given by the Hon'ble Supreme Court as well as by the various Hon'ble High Courts including the Jurisdictional High Court i.e. Hon ble Delhi High Court. In various Hon'ble High Courts across India and the Hon'ble Supreme Court while direction in Covid-19 situation has categorically mentioned the word Tribunal as well but that is absent in the direction issued by the Hon ble Jurisdictional High Court as well Hon ble Delhi High Court. However, after seeing the scenario of Covid 19 situation and being given guidelines by the Jurisdictional High Court we are taking the interpretation of the said direction of the Hon ble Delhi High Court that the said decision/direction is applicable to the Tribunal. Therefore, despite declining the stay on the merits of the issue but respectfully following the decision of the honourable Delhi High Court, we are extending the Stay till 31st August, 2020, only for Covid-19 reasons. 17. With above direction we dispose of the stay petition. Order pronounced in the Open Court on 14th AUGUST, 2020 - - TaxTMI - TMITax - Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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