 "HC sets aside ITAT order declining stay on Rs 1,200 cr demand on Samsung")
The Delhi High Court (HC) 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).
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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.
A detailed order copy is awaited.