Narsinh Associates Promoters Builders and Developers Vs DGIT (Investigation) (ITAT Pune)
ITAT Pune Stays Rs. 4.11 Cr Tax Demand Against Rs. 10 Lakh Payment, Citing Hardship from Frozen RERA Account
Can an assessee who failed to properly pursue its case before the lower authorities still secure a stay of a tax demand exceeding Rs. 4.11 crore? The ITAT Pune Bench has answered this in the affirmative, though subject to strict conditions. In a significant order, the Income Tax Appellate Tribunal, Pune Bench allowed two stay applications filed by a real estate developer, seeking protection against outstanding demands of Rs. 2,01,16,092 for AY 2016-17 and Rs. 2,10,20,553 for AY 2014-15. For both years, the assessments were completed ex parte under Section 144 of the Income Tax Act, 1961, with the Assessing Officer making additions in respect of the total sale consideration received during the relevant years. The assessee’s appeals before the CIT(A) were subsequently dismissed in limine due to non-appearance. However, the Tribunal has stayed outstanding tax demands of over Rs. 4.11 crore for both the AYs, subject to payment of only Rs. 5 lakh for each assessment year.
The stay assumes significance as the Tribunal granted relief despite noting that the assessee had not pursued the assessment and appellate proceedings before the CIT(A) in a serious manner. The financial hardship caused by the freezing of the assessee’s RERA-designated bank account, however, weighed in favour of granting conditional stay.
