Income Tax Appellate Tribunal - Delhi
Nova Power Pvt. Ltd., New Delhi vs Ito, Ward-18(4), New Delhi on 4 October, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'Friday A' NEW DELHI
BEFORE SHRI G.S. PANNU, VICE PRESIDENT
&
SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER
Stay Application No.936/Del/2019
(In ITA No.2491/Del/2019)
Assessment Year: 2007-08
M/s Nova Power P. Ltd. vs Income-tax Officer,
8A/8, WEA Karol Bagh, Ward - 18(4),
New Delhi New Delhi.
PAN: AAACN3792K
Applicant Respondent
Applicant by Shri Pramod Kumar Parida, Advocate
Revenue by Sh. Subhakant Sahu, Sr. DR
Date of Hearing 04.10.2019
Date of Pronouncement 04.10.2019
ORDER
PER K. NARASIMHA CHARY, JM
Seeking stay of the outstanding demand to the tune of Rs.1,62,76,670/- plus additional interest as applicable u/s 220(2) of the Income-tax Act, 1961("the Act") for the Assessment Year 2007-08, M/s Nova Power Pvt. Ltd. (the assessee) foiled this Stay application on several grounds.
2. It is the contention of the assessee that the learned AO treated the share applicants as entry providers giving only accommodation entries 2 made an addition to the tune of Rs.2.25 crores, by order dated 30.3.2015 passed u/s 147/143(3) of the Act. According to the learned AR, the said addition could not have been sustained by the learned CIT(A) because it was only after enquiry and satisfaction in respect of the share applicant and share premium amount the original assessment order dated 24.12.2009v passed u/s 143(3) of the Act. Having originally accepted the same, but by reopening the concluded assessment beyond 4 years, ld. AO exceeded the jurisdiction in view of the first proviso to Section 147 of the Act. He submits that such a defect is incurable u/s 292(2B) of the Act. He further submitted that the addition after reopening of the proceedings is bad in law for violation of the mandatory notice u/s 143(2) of the Act. He also submitted that the third party statements forming basis for the ld. AO to make the addition were not confronted to the assessee and such material was gathered behind the back of the assessee; and that based on the surmises and conjectures, the addition was made. He, therefore, submits that there is a strong prima facie case and balance of convenience in favour of the assessee.
3. He further submitted that the assessee is undergoing financial crunch and is not in a position to meet the demand raised in this matter and, therefore, if no stay is granted, it would affect the legal rights of the assessee irreparably and cause financial hardship.
4. Per contra, it is the submission of the learned DR that the dismissal of the first appeal by the competent authority itself indicates the absence of prima facie case or balance of convenience in favour of the assessee and if stay is granted, it would cause financial hardship to the Revenue 3 also. He further submitted that no evidence is placed before the Tribunal at this stage to establish the financial position of the assessee.
5. We have gone through the record in the light of the submissions made on either side. The technical issues raised by the assessee in respect of the change of opinion by the ld. AO while dealing with the matter u/s 147 of the Act and also non issuance of notice u/s 143(2) of the Act, if go uncontroverted, would go to the root of the matter and vitiates the proceedings, but such allegations are fit to be addressed while deciding the appeal only. However, the rival contentions and the balance of convenience suggests that in order to protect the interests of both the poarties, it is only on making certain payments and furnishing security for the balance amount, the Revenue could be directed not to enforce the demand against the assessee. It is, therefore, just and necessary to grant conditional stay order with a direction to the assessee to be ready with the matter at an earliest point of time.
6. With this view of the matter, we direct the assessee to make payment of Rs.25 lacs in two equal instalments at the rate of Rs.12.50 lacs each by 20.10.2019 and 15.11.2019 respectively and to be ready to proceed with the matter by 27.11.2019. We also record undertaking given by the assessee that they would offer the receivables of Rs.1.25 crores and investments at Rs.12.50 lacs as security for the balance of demand and the assessee is directed to file such undertaking by 31.10.2019.
7. Subject to the above conditions, let there be a stay of balance of demand for a period of six months or till the disposal of the appeal, 4 whichever is earlier and the revenue is directed to defreeze the accounts of the assessee with Bank of India.
8. In the result, Stay Application is allowed.
Order pronounced in the Open Court on 4th October , 2019.
Sd/- sd/-
(G.S. PANNU) (K. NARASIMHA CHARY)
VICE PRESIDEBNT JUDICIAL MEMBER
Dated: 4th October, 2019/VJ
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
5
Draft dictated on 16.8.2019
Draft placed before author 16.8.2019
Draft proposed & placed before the second member Draft discussed/approved by Second Member.
Approved Draft comes to the Sr.PS/PS Kept for pronouncement on Date of uploading order on the website File sent to the Bench Clerk Date on which file goes to the AR Date on which file goes to the Head Clerk.
Date of dispatch of Order.