M/S. LALITHA JEWELLERY MART LTD.,CHENNAI V. DCIT, CENTRAL CIRCLE-1(4), CHENNAI

SA 30/CHNY/2025

AI Insights

The case involves M/s. Lalithaa Jewellery Mart Limited, which sought a stay on the outstanding tax demand arising from assessments for the assessment years 2016-17 to 2021-22, following a search operation under section 132 of the Income Tax Act. The Assessing Officer (AO) had significantly increased the assessed income compared to the returned income, leading to a substantial tax demand. The assessee appealed to the CIT(A), which reduced the demand, but the AO had not fully complied with this order. The Tribunal found that the assessee had made a prima facie case for a stay, considering the financial hardship and the payments already made towards the tax demand.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107114 (ITAT-CHENNAI)
• Appeal Type: Stay Application
• Pronouncement Date: 24-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANAND K KALAKERI
• Assessee Lawyers: D.ANAND
• Keywords: Application of stay
• Section: 153A; 20

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL‘B’ BENCH: CHENNAI \u0003ीएबीटी. वक , ाियक सद\u0011 एवं एवं एवं एवं\u0003ीजगदीश,लेखासद\u0011क ेसम\u001a BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER Stay Application Nos. 29 to 34/Chny/2025 [In ITA Nos.675 to 680/Chny/2025] िनधा\u000eरणवष\u000e/Assessment Years: 2016-17 to 2021-22 M/s.Lalithaa Jewellery Mart Limited #123, Usman Road, T.Nagar, Chennai -600 017. v. The DCIT Central Circle-1(4) Chennai. [PAN: AAACL-1523-A] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.D.Anand, Advocate \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Mr.Shivanand K Kalakeri, CIT सुनवाईक\u001aतारीख/Date of Hearing : 20.03.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 24.03.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: These are Stay applications moved by the assessee-company seeking grant of stay of the outstanding demand arising out of appeals filed in ITA Nos.675 to 680/Chny/2025in relation to for assessment years (‘AYs’) 2016-17 to 2021-22. 2. The facts brought to our notice are that, search operation u/s.132 of the Act was conducted upon the assessee on 04.03.2021. Pursuant to the search, notices u/s 153A of the Act was issued for the earlier six AYs in which as opposed to the aggregate returned income of Rs.898 crores, the AO framed these assessments at aggregate total income of Rs.1949 crores. The AO also completed the assessment for AY 2021 order dated 31.03.2023 de Aggrieved the assessee preferred appeals before the Ld. CIT(A), who is noted to have partly allowed the appeals. Being aggrieved by the Ld. CIT(A)’s orders, the assessee has filed appeals in this Tribunal which pending adjudication. 3. According to the assessee, by virtue of the orders of the Ld. CIT(A), the outstanding demand which stood at Rs.475 crores got reduced to Rs.299 crores (approximately). Drawing our attention to the contents of the stay petition, Ld.AR explained the case facts in brief and asserted that assessee has a strong prima well as on merits and thus, submitted that balance of favour. He further submitted that the AO had f assessments and tax demands raised were which was creating undue financial hardships for the assessee and if stay is not granted to the outstanding tax demand and coercive recovery measures is resorted to, then the entire business spread hundreds of employees would be on the verge of closure. Further, according to the Ld.AR, the assessee as on date had made payments aggregating to Rs.19.54 crores and that they had also requested the AO to adjust the pending refunds of Rs.9.50 crores pertaining to AYs 2013 S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 2 :: crores. The AO also completed the assessment for AY 2021 order dated 31.03.2023 determining total income at Rs.568,97,18,758/ Aggrieved the assessee preferred appeals before the Ld. CIT(A), who is noted to have partly allowed the appeals. Being aggrieved by the Ld. CIT(A)’s orders, the assessee has filed appeals in this Tribunal which According to the assessee, by virtue of the orders of the Ld. CIT(A), the outstanding demand which stood at Rs.475 crores got to Rs.299 crores (approximately). Drawing our attention to the he stay petition, Ld.AR explained the case facts in brief and asserted that assessee has a strong prima-facie case on legal well as on merits and thus, submitted that balance of convenience is favour. He further submitted that the AO had framed high and tax demands raised were which was creating undue for the assessee and if stay is not granted to the outstanding tax demand and coercive recovery measures is resorted to, then the entire business spread across sixty (60) outlets having several hundreds of employees would be on the verge of closure. Further, according to the Ld.AR, the assessee as on date had made payments aggregating to Rs.19.54 crores and that they had also requested the AO e pending refunds of Rs.9.50 crores pertaining to AYs 2013 (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd crores. The AO also completed the assessment for AY 2021-22 by an termining total income at Rs.568,97,18,758/-. Aggrieved the assessee preferred appeals before the Ld. CIT(A), who is noted to have partly allowed the appeals. Being aggrieved by the Ld. CIT(A)’s orders, the assessee has filed appeals in this Tribunal which is According to the assessee, by virtue of the orders of the Ld. CIT(A), the outstanding demand which stood at Rs.475 crores got substantially to Rs.299 crores (approximately). Drawing our attention to the he stay petition, Ld.AR explained the case facts in brief and on legal issues as convenience is in its ramed high pitched and tax demands raised were which was creating undue for the assessee and if stay is not granted to the outstanding tax demand and coercive recovery measures is resorted to, across sixty (60) outlets having several hundreds of employees would be on the verge of closure. Further, according to the Ld.AR, the assessee as on date had made payments aggregating to Rs.19.54 crores and that they had also requested the AO e pending refunds of Rs.9.50 crores pertaining to AYs 2013-14 to 2015-16 against the outstanding demand and therefore, it was claimed that the company had paid almost Rs.29 tax demand. The Ld. AR also brought to our notice t immovable properties worth more than Rs 200 crores have been attached by the Department. Overall, demand ought to be stayed. In the alternate, the Ld AR requested that, if the assessee is required t Revenue, then it ought to be granted staggered monthly installments for the same and alsoout of turn hearing of its appeals. 4. Per contra, the Ld.CIT DR contested the claim of the assessee. According to him, the outstanding tax demand was Rs.472.88 crores and not Rs.299.67 crores as the Ld. DR, though properties attached were of val crores, but since these properties has already been mortgaged with banks, the attachment did not protect the interests of the Revenue. He also submitted the field report obtained from the AO, which showed that, the assessee had paid onl not even 2.5% of the total demand and hence demanded that the assessee should be directed to make balance amount of 20% of tax demand of Rs.94 crores (i.e. 20% of Rs.472.88 crores). S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 3 :: 16 against the outstanding demand and therefore, it was claimed that the company had paid almost Rs.29 crores pursuant to the disputed tax demand. The Ld. AR also brought to our notice that the assessee’s immovable properties worth more than Rs 200 crores have been attached Overall, therefore he prayed that, the impugned demand ought to be stayed. In the alternate, the Ld AR requested that, if the assessee is required to pay 20% of the disputed tax demanded by the Revenue, then it ought to be granted staggered monthly installments for the same and alsoout of turn hearing of its appeals. Per contra, the Ld.CIT DR contested the claim of the assessee. According to him, the outstanding tax demand was Rs.472.88 crores and not Rs.299.67 crores as submitted by the assessee. Further, according to the Ld. DR, though properties attached were of value more than Rs.200 crores, but since these properties has already been mortgaged with banks, the attachment did not protect the interests of the Revenue. He also submitted the field report obtained from the AO, which showed that, the assessee had paid only an amount of Rs.18,54,50,000/ not even 2.5% of the total demand and hence demanded that the assessee should be directed to make balance amount of 20% of tax demand of Rs.94 crores (i.e. 20% of Rs.472.88 crores). (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd 16 against the outstanding demand and therefore, it was claimed to the disputed hat the assessee’s immovable properties worth more than Rs 200 crores have been attached therefore he prayed that, the impugned demand ought to be stayed. In the alternate, the Ld AR requested that, if o pay 20% of the disputed tax demanded by the Revenue, then it ought to be granted staggered monthly installments for Per contra, the Ld.CIT DR contested the claim of the assessee. According to him, the outstanding tax demand was Rs.472.88 crores and the assessee. Further, according to ue more than Rs.200 crores, but since these properties has already been mortgaged with banks, the attachment did not protect the interests of the Revenue. He also submitted the field report obtained from the AO, which showed that, y an amount of Rs.18,54,50,000/-, which was not even 2.5% of the total demand and hence demanded that the assessee should be directed to make balance amount of 20% of tax 5. We have heard both the pa placed on record. The facts as noted are that, the assessee is engaged in the business of dealing in jewellery items having sixty (60) outlets. Consequent to search action, assessments were framed u/s 153A/143(3) of the Act which resulted in additions of undisclosed income in excess of Rs.1051 crores, all of which are in dispute. It is observed by us that, as per the AO’s report, the outstanding demand is Rs.472 crores, but according to the assessee’s calculation, th Ld. CIT(A)’s order partly deleting the addition/s, which would consequentially result in reduction of tax liability to Rs.299 crores. The Ld. AR has rightly showed us that, the calculations set out in the AO’s report is riddled with mistakes. Accordingly, the purported figure of Rs.472 crores is found to be excessive and that it ought to be around Rs.300 crores (approx.). The AO is therefore directed to give effect to the Ld. CIT(A)’s appellate order/s and re demand along with interest as per law. It is also not in dispute that, the assessee has already remitted taxes of Rs.19.54 crores and has requested for adjustment of pending refunds to the tune of Rs.9.50 crores, which once given effect to by the AO, shall take the total payments to Rs.29 crores. It is also noted that, the Revenue has already taken coercive steps and has attached immovable properties worth in excess of Rs.200 crores albeit, the properties were already mortgaged with banks S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 4 :: We have heard both the parties and have also perused the material The facts as noted are that, the assessee is engaged in the business of dealing in jewellery items having sixty (60) outlets. Consequent to search action, assessments were framed u/s 153A/143(3) the Act which resulted in additions of undisclosed income in excess of Rs.1051 crores, all of which are in dispute. It is observed by us that, as per the AO’s report, the outstanding demand is Rs.472 crores, but according to the assessee’s calculation, the AO has not given effect to the Ld. CIT(A)’s order partly deleting the addition/s, which would consequentially result in reduction of tax liability to Rs.299 crores. The Ld. AR has rightly showed us that, the calculations set out in the AO’s report dled with mistakes. Accordingly, the purported figure of Rs.472 crores is found to be excessive and that it ought to be around Rs.300 crores (approx.). The AO is therefore directed to give effect to the Ld. CIT(A)’s appellate order/s and re-compute the correct figure of tax demand along with interest as per law. It is also not in dispute that, the assessee has already remitted taxes of Rs.19.54 crores and has requested for adjustment of pending refunds to the tune of Rs.9.50 crores, which to by the AO, shall take the total payments to Rs.29 crores. It is also noted that, the Revenue has already taken coercive steps and has attached immovable properties worth in excess of Rs.200 crores albeit, the properties were already mortgaged with banks etc. Further, the (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd rties and have also perused the material The facts as noted are that, the assessee is engaged in the business of dealing in jewellery items having sixty (60) outlets. Consequent to search action, assessments were framed u/s 153A/143(3) the Act which resulted in additions of undisclosed income in excess of Rs.1051 crores, all of which are in dispute. It is observed by us that, as per the AO’s report, the outstanding demand is Rs.472 crores, but e AO has not given effect to the Ld. CIT(A)’s order partly deleting the addition/s, which would consequentially result in reduction of tax liability to Rs.299 crores. The Ld. AR has rightly showed us that, the calculations set out in the AO’s report dled with mistakes. Accordingly, the purported figure of Rs.472 crores is found to be excessive and that it ought to be around Rs.300 crores (approx.). The AO is therefore directed to give effect to the Ld. rect figure of tax demand along with interest as per law. It is also not in dispute that, the assessee has already remitted taxes of Rs.19.54 crores and has requested for adjustment of pending refunds to the tune of Rs.9.50 crores, which to by the AO, shall take the total payments to Rs.29 crores. It is also noted that, the Revenue has already taken coercive steps and has attached immovable properties worth in excess of Rs.200 crores etc. Further, the contemporaneous facts tax returns and that, for AYs 2016 declared income of more than Rs.898 crores and paid taxes thereon. Even for AY 2025-26, the Ld. AR has separately remitted advance tax of Rs.15 crores in this financial year. Having taken note of these facts, according to us, if the assessee is required to pay the entire 20% of disputed demand upfront, it wo cause undue financial hardship to them. 6. However, considering the totality of the facts and circumstances of the case, we are also not inclined to grant blanket stay of recovery. According to us, the 20% of the disputed demand effect to Ld. CIT(A)’s order) Rs.60-65 crores, out of which Rs.29 crores stands paid / to be adjusted, as observed above, and apart from the same, immovable properties have also been attached. Having gone through grounds of appeal raised by the assessee in the appeals preferred by it, we find that, the assessee has made out prima interim relief, and according to us, the balance of convenience is in their favour. However, without commenting anything on the merits of the case, which would be appropriately dealt with at the time of hearing of appeal, but so far as it is necessary to evaluate the prima facie case for the S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 5 :: contemporaneous facts show that, the assessee has been regularly filing tax returns and that, for AYs 2016-17 to 2021-22, the assessee has declared income of more than Rs.898 crores and paid taxes thereon. Even 26, the Ld. AR has brought to our notice that, the assessee has separately remitted advance tax of Rs.15 crores in this financial year. Having taken note of these facts, according to us, if the assessee is required to pay the entire 20% of disputed demand upfront, it wo cause undue financial hardship to them. onsidering the totality of the facts and circumstances of , we are also not inclined to grant blanket stay of recovery. According to us, the 20% of the disputed demand (after giving proper effect to Ld. CIT(A)’s order), prima-facie, may work out in the range of 65 crores, out of which Rs.29 crores stands paid / to be adjusted, as observed above, and apart from the same, immovable properties have also been attached. Having gone through contents of Stay Petition and grounds of appeal raised by the assessee in the appeals preferred by it, we find that, the assessee has made out prima-facie case for interim relief, and according to us, the balance of convenience is in their However, without commenting anything on the merits of the case, would be appropriately dealt with at the time of hearing of appeal, but so far as it is necessary to evaluate the prima facie case for the (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd that, the assessee has been regularly filing 22, the assessee has declared income of more than Rs.898 crores and paid taxes thereon. Even has brought to our notice that, the assessee has separately remitted advance tax of Rs.15 crores in this financial year. Having taken note of these facts, according to us, if the assessee is required to pay the entire 20% of disputed demand upfront, it would onsidering the totality of the facts and circumstances of , we are also not inclined to grant blanket stay of recovery. (after giving proper may work out in the range of 65 crores, out of which Rs.29 crores stands paid / to be adjusted, as observed above, and apart from the same, immovable properties have contents of Stay Petition and grounds of appeal raised by the assessee in the appeals preferred by it, facie case for grant of ad- interim relief, and according to us, the balance of convenience is in their However, without commenting anything on the merits of the case, would be appropriately dealt with at the time of hearing of appeal, but so far as it is necessary to evaluate the prima facie case for the purpose of disposing the stay application, Accordingly, we are inclined to allow out of turn hearing of these appeals and the Registry is directed to post the matters 680/Chny/2025] on further sum of Rs.5 crores on proof of the same with the Registry. not seek adjournment of the hearing of its appeal except under unavoidable circumstances 7. The assessee shall thereafter co installments as stated (infra). Date 15.05.2025 15.06.2025 15.07.2025 15.08.2025 8. The assessee is accordingly granted conditional ad demand subject to compliance with the above directions and remittance of the amounts, as stated above, on or before 15 S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 6 :: purpose of disposing the stay application, we have considered the same. Accordingly, we are inclined to allow out of turn hearing of these appeals and the Registry is directed to post the matters [ITA No 675 to on 30.04.2025, provided the assessee remits further sum of Rs.5 crores on or before 15.04.2025 of the same with the Registry. Needless to add, the assessee shall not seek adjournment of the hearing of its appeals before the Tribunal, except under unavoidable circumstances. The assessee shall thereafter continue to remit further taxes in the installments as stated (infra). Date Amount (Rs.) 15.05.2025 5 crores 15.06.2025 10 crores 15.07.2025 10 crores 15.08.2025 Balance figure - to ensure that 20% of the disputed tax demand (after giving effect to Ld. CIT(A)’s order) net of adjustment/s of refund, is to be paid The assessee is accordingly granted conditional ad- demand subject to compliance with the above directions and remittance of the amounts, as stated above, on or before 15th of every month, shown (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd we have considered the same. Accordingly, we are inclined to allow out of turn hearing of these appeals [ITA No 675 to provided the assessee remits or before 15.04.2025 and submits Needless to add, the assessee shall before the Tribunal, ntinue to remit further taxes in the to ensure that 20% of the disputed tax (after giving effect to net of adjustment/s of refund, is to -interim stay of demand subject to compliance with the above directions and remittance of every month, shown therein, or until the time the appeals are disposed off by the Tribunal, whichever is earlier. Until then, no coercive action shall be taken against the assessee till the date of next hearing. 9. In light of the above directions, th assessee stand disposed off. Order pronounced i Sd/- (जगदीश) (JAGADISH) लेखासद\u0007य/ACCOUNTANT MEMBER चे\u0003ई/Chennai, \u0005दनांक/Dated: 24-03-2025 DS आदेशक \u000eितिलिपअ\u0014ेिषत/Copy to 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकरआयु\u000f/CIT, Chennai / 4. िवभागीय\bितिनिध/DR 5. गाड\u0018फाईल/GF S.A.Nos.29 to 34/Chny/2025 (AY 20 Lalithaa Jewellery Mart P Ltd :: 7 :: therein, or until the time the appeals are disposed off by the Tribunal, whichever is earlier. Until then, no coercive action shall be taken against the assessee till the date of next hearing. In light of the above directions, the stay applications of the assessee stand disposed off. Order pronounced in open court on 24th March, 2025. /ACCOUNTANT MEMBER Sd/ (एबी टी. (ABY T. VARKEY याियकसद\u0007य/JUDICIAL MEMBER 25 Copy to: , Chennai / Madurai / Salem / Coimbatore. (AY 2016-17 to 2021-22) Lalithaa Jewellery Mart P Ltd therein, or until the time the appeals are disposed off by the Tribunal, whichever is earlier. Until then, no coercive action shall be taken against e stay applications of the . Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER / Salem / Coimbatore. "