The Delhi High Court on Monday set aside the Income Tax
Appellate Tribunal (ITAT)’s November 22 order dismissing Samsung India’s
application seeking stay on the tax department’s demand for Rs 1,213 crore.
By doing this, the HC has allowed the writ petition filed by
Samsung India against the ITAT order wherein the tribunal had dismissed its
plea as being premature since no coercive action was yet initiated by the tax
department.
The HC ruled that the tax demand was outstanding in case of
Samsung and hence, the ITAT should have decided the stay petition on merits
rather than dismissing it on ground of being premature.
The order was pronounced by Justices Vibhu Bakhru and Swarna
Kanta Sharma.
"In this case, the demand was already outstanding but no
coercive action had been taken as yet to recover the demand. Many similar stay
petitions are either dismissed or delayed from hearing on the ground that
recovery proceedings are not yet initiated. This is a welcome ruling as
taxpayers have been facing uncertainty as their bank accounts can be attached
through recovery proceedings by the tax department, anytime by giving just a
few days’ notice. So, even though the department hasn’t taken any coercive
measure, the fact that the demand is outstanding, taxpayers can, as a
pre-emptive measure, get a stay and would not have to worry about running to
the courts when the department takes action,” Amit Maheshwari, tax partner, AKM
Global, said.
The ITAT had said that Samsung's
stay application was premature since no coercive action for recovery had been
initiated by the AO (Assessing Officer).
The HC, however, held that given the fact that the demand is
outstanding, the tribunal's reasoning that the application is premature is not
sustainable. The stay application has been restored to the file of ITAT with
directions to expeditiously decide the said application on merits.
Advocates
Himanshu S Sinha, Prashant Meharchandani, Vibhu Jain, and Jainender Singh
Kataria appeared for Samsung.