INCOME TAX ACT, 1961

Section 220

Recovery - Stay of demand - Guidelines in relation to disposing stay application whether exhaustive leaving no discretion for AO or competent authority -

Assessee was engaged in business of providing engineering procurement and construction management services to oil and gas companies worldwide. It challenged order of PCIT contending that while considering application for stay filed in an appeal preferred, stay application was disposed with a direction to pay 10% of disputed amount by 16-3-2020 and the remaining amount to be paid in two equal installments in April 2020 and May 2020. Held: Assessee contended that question was as to “whether the software licencing fee that has been paid by the assessee is to be treated and allowed as a revenue expenditure. Revenue Authority while deciding on application for stay was required to take note of judgments passed on aforesaid issue, in an appropriate manner. It was also to be noted that the Guidelines are not exhaustive and discretion that is available to AO or the Authority considering application for stay could be exercised taking note of the facts made out and the strength of the case made out in the appeal. Thus, considering reliance placed by the assessee on the said judgments, it was appropriate to modify the order. Accordingly stay of demand was granted during pendency of appeal, subject to certain conditions.

Followed:CIT v. IBM India Ltd. (2013) 357 ITR 88 (Karn) : 2013 TaxPub(DT) 1945 (Karn-HC); CIT v. Toyota Kirloskar Motors Pvt. Ltd. (2012) 349 ITR 65 (Karn) : 2012 TaxPub(DT) 3179 (Karn-HC)

REFERRED :

FAVOUR : Partly in assessee's favour

A.Y. :

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