In a breather to Samsung India Electronics Pvt., the Delhi High Court on Monday overturned an order of the Income Tax Appellate Tribunal that had dismissed the electronic manufacturer's plea to pause proceedings on a Rs 1,213-crore tax demand.
Last month, the ITAT had rejected Samsung's stay application on the ground that its petition was "premature". The tribunal had also stated that the stay application was meritless at the time as the revenue department had not taken any coercive steps to recover the tax demand.
The high court was not moved by the tribunal's reasoning and said that the demand raised by the revenue authorities was outstanding and, therefore, the ITAT could not have dismissed the plea as being premature.
As a result, a division bench comprising Justices Vibhu Bakhru and Swarna Kanta Sharma sent the stay application back to the tribunal for a fresh consideration on merits. “We request the learned ITAT to dispose of the petitioner's application as expeditiously as possible,” the high court's order read.
Welcoming the ruling, Amit Maheshwari, partner at AKM Global, said that the fact that recovery proceedings have not yet begun results in the dismissal or delay of many similar stay petitions.
Maheshwari added that the high court's order will ensure that even though the department hasn't taken any coercive measure, the fact that the demand is outstanding means taxpayers can, as a preemptive measure, get a stay and would not have to worry about running to the courts when the department takes action.
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