ITAT extends Stay Period for Google India due to Delay in disposal of Appeal [Read Order]

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT), on Monday granted an extension of stay period to IT giants Google India citing a reason for the delay in non-disposal of appeal. The two-judge bench of the Tribunal noted that the delay was not due to the fault of the assessee and therefore, the stay period should be extended.

Earlier, the income tax department had made additions against the Company under three heads, i.e, the amount paid to the parent Company for distribution services under Adword Programmes was subject to TDS under Section 195 of the Income Tax Act. Further, an addition was made after determination of Arm’s Length Price (ALP) u/s.92 of the Act, in respect of international Transactions of rendering Google India IT services and IT-enabled Services and Marketing and Distribution services rendered by GIPL to its Associated Enterprises (AE). The third edition was made since the profits arising out of AdWords program attributable to Google Ireland are not offered to tax.

Originally, the stay was granted by the Tribunal last year and directed the assessee to pay an amount of Rs.475 Crores in four installments. However, the revenue challenged the above stay order passed by the Tribunal before the Hon’ble High Court of Karnataka, and Hon’ble High Court has reduced the payment in 3 installments and the assessee has duly complied with the directions of the Hon’ble High Court in paying the installments. Subsequently, the stay order was extended in S.P. Nos.238, 239 & 240/Bang/2019 Dt.9.8.2019 for a period of six months from the date of the order or till disposal of the appeal.

The case was posted for hearing on 6.11.2019 and 18.11.2019, but the appeal could not be heard due to paucity of time. Further on 8.1.2020, the appeal was adjourned by the Bench to 19.2.2020. Accordingly, the appeals are posted for hearing on 19.2.2020 and prayed for extension of stay.

Since the period of stay is over, the assessee pleaded before the Tribunal that the delay in non-disposal of appeal is not attributable to the assessee.

Allowing the contentions of the assessee, the Tribunal held that “We, considering the facts and circumstances and the stay petition filed by the assessee, hold that the delay in non-disposal of the appeal is not attributable to the assessee. Hence the balance of convenience lies in favor of the assessee for extending the stay as the assessee has complied with the directions of the Tribunal and the Hon’ble High Court in payment of installments. Accordingly, we extend the stay of outstanding demand for a further period of six months from the date of this order or disposal of the appeal whichever is earlier. We order accordingly.”