A larger bench of the Income Tax (I-T) Appellate Tribunal (ITAT) will on July 6 hear a case related to a tax demand on Tata Education & Development Trust.
The case is crucial as it will set a precedent in other cases related to minimum pay demand from the I-T Department. A recent amendment to the Income Tax Act seeks to curtail the power of the Appellate Tribunal to stay a tax demand without the assessee making any minimum payment.
In the Tata Trust case, the I-T Department is asking for a minimum 20 percent payment of the Rs 100 crore tax demand, even if ITAT grants a stay, The Economic Times reported.
Moneycontrol could not independently verify the story.
Tata Trusts declined to comment when contacted by The Economic Times.
The ITAT will examine the amendment to Section 254 (2A) of the IT Act, according to which the assessee has to pay a minimum of 20 percent of the demanded amount to be granted a stay, the report said. The original Section 254 (2A) gave ITAT the power to stay a demand for 180 days, extend it if required and decide on the payment limits.
The case is also expected to have a bearing on the matter of cancellation of six Tata Trusts licences, the report added.
"While the issue has been raised in the matter concerning tax demand raised against Tata Education & Development Trust, the verdict will act as a precedent and will have a larger bearing on the Tata Trusts case whose licences were cancelled last year," a tax official told the publication.
The estimated tax demand in the above-mentioned case is Rs 12,000 crore, which has not yet been raised by the department, the official added.
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