T T STEEL SERVICES INDIA PRIVATE LIMITED,RAMANAGAR V. DCIT, CIRCLE-7(1)(1), BENGALURU

SA 6/BANG/2025

AI Insights

The case involves M/s TT Steel Service India Pvt. Ltd., which filed stay petitions under section 254(2A) of the Income Tax Act, 1961, against the outstanding tax demands for the Assessment Years 2020-21 and 2021-22, amounting to Rs. 15,32,32,480 and Rs. 28,89,62,420 respectively. The assessee argued that the upward adjustments made by the Revenue were based on incorrect assumptions of facts, particularly concerning international transactions with Associated Enterprises (AE) and Non-Associated Enterprises (Non-AE). The Tribunal considered the payments already made by the assessee, which exceeded the required 20%, and the potential irreparable loss due to the high-pitched assessment and bank attachment. The Tribunal found in favor of the assessee, emphasizing the need to prevent undue hardship and maintain the balance of convenience until the appeal's disposal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41284 (ITAT-BANGALORE)
• Appeal Type: Stay Application
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARITHIVEL V
• Assessee Lawyers: MAHAVEER C JAIN
• Keywords: Transfer pricing; International transaction

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER SA No.5 & 6/Bang/2025 (In ITA Nos.1741 & IT(TP)A No. 2599/Bang/2024) Assessment Years : 2020-21 & 2021-22 M/s TT Steel Service India Pvt. Ltd., Plot No.33 and 34, Bidadi Industrial Area, Ramanagara Taluk, Bidadi S.O, Bidadi, Ramanagar – 562 109. PAN – AAFCT 0414 M Vs. The Dy. Commissioner of Income Tax, Circle – 7(1)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Mahaveer C Jain, CA Revenue by : Shri Parithivel V, JCIT (DR) Date of hearing : 10.02.2025 Date of Pronouncement : 11.02.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The assessee has filed the present stay petitions under section 254(2A) of the Income Tax Act, 1961, seeking stay of outstanding demand for the Assessment Years 2020-21 and 2021-22. 2. The demand raised by the Revenue for AYs 2020-21 and 2021-22 amounts to Rs. 15,32,32,480/- and Rs. 28,89,62,420/- respectively. The assessee has already made a payment of Rs. 3,06,46,496/- and S.A No.5 & 6/Bang/2025 Page 2 of 4 . Rs. 8,84,38,980/-, collectively amounting to more than 20% of the total outstanding demand for both years. As such, the assessee has paid the taxes of Rs. 3,06,46,496/- voluntarily and the amount of Rs.8,84,38,980/- was recovered by the AO after attaching the bank of the assessee. 3. The assessee has contended that, in light of the payments already made exceeding the stipulated 20% threshold, the balance demand should be stayed until the disposal of the appeal. 4. It was further submitted by the assessee that the upward adjustment made by the Revenue is based on wrong assumption of facts. According to the assessee, the Revenue while making upward adjustment has considered all the international transaction carried out by the assessee with AE and Non-AE which has resulted huge demand of tax. Thus, the assessee contended that it has a strong case on merit which is covered in its own case in its favour by the order of the ITAT and Hon’ble Jurisdictional High Court. In view of the above the ld. AR appearing for the assessee prayed for the grant of stay till the disposal of the appeal otherwise, it will cause genuine hardship if the coercive actions are taken for the recovery of the outstanding demand from the assessee. 5. On the other hand, the learned Departmental Representative opposed the stay petition but did not dispute the fact that the assessee has already deposited more than 20% of the outstanding demand. S.A No.5 & 6/Bang/2025 Page 3 of 4 . 6. We have heard the rival contentions of both the parties and perused the materials available on record. The parameters to be taken into account in considering the grant of stay of disputed demand are well settled – the existence of a prima facie case, financial stringency and the balance of ‘Financial stringency’ would include within its ambit the question of ‘irreparable injury’ and ‘undue hardship’ as well and arrive at the balance of convenience in the matter. From the preceding discussion, we note that the AO/TPO erred grossly in making the upward adjustment after taking into the consideration the international transactions carried out by the assessee with non-AE which is against the settled principles of law and prima facie evidences that the high- pitched assessment has been made by the revenue. 6.1 Having regard to the facts of the case as discussed above, irreparable loss to the assessee on account of attachment of the bank, especially the high-pitched assessment framed by the revenue, we are of the view that the balance of convenience lies in favour of the assessee. Therefore, we exercise our discretion in favour of the assessee for the stay on the recovery of the outstanding demand. As such there should not any recovery by the Revenue from the assessee beyond the amount of Rs. 3,06,46,496/- and Rs. 8,84,38,980/ for both the years. Accordingly, we direct that the balance outstanding demand be kept in abeyance till the disposal of the appeal by the Tribunal or for a period of 6 months whichever is earlier. Further, as the attachment of the assessee’s bank account is causing undue hardship, we hereby direct the Revenue to lift the attachment of the assessee’s bank account forthwith in the given facts and circumstances. S.A No.5 & 6/Bang/2025 Page 4 of 4 . 6.2 It is also important to note that the assessee shall not seek any adjournment of the case on the date of hearing and if it does so, the bench hearing the appeal of the assessee will be at liberty to revoke this order granting stay of recovery of the outstanding demand. Thus, the stay petitions filed by the assessee are allowed in terms of above. 7. In the result, both the stay petitions are allowed. Order pronounced in court on 11th day of February, 2025 Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 11th February, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore "