In a major setback to Network giant Google India, the Income Tax Appellate Tribunal, Bengaluru has refused grant stay to the Company after losing a six year old tax avoidance case last month.
Last month, the ITAT had upheld the order of the department treating the assessee as “the assessee in default” for non-deduction of tax in respect of payment made by the assessee to Google Ireland Ltd., as the same was in the nature of royalty both under the provisions of domestic law as well as under DTAA between India and Ireland in the order passed by the TDS officer u/s 201(1) & 201(1A) of the Income-tax Act, 1961.
As per the above order of assessment, the Company was asked to pay Rs.129,42,20,422/- as tax. In the year 2014, the Tribunal has allowed an interim stay to the Company subject to payment of rupees 70 crores.
Later, the stay had been extended by the Tribunal three times.
The ITAT had upheld the demand while disposing the second appeal last month. By this, the demand has become alive and for this reason, the Company approached the Tribunal again seeking extension of stay granted to them.
“Admittedly there is change of d circumstances from the first stay order, since this Tribunal had disposed of the appeal involving identical issue for earlier years against the assessee. Therefore, the principle that in absence of change of circumstances and the delay in disposal of appeal is not attributable to the assessee-company, stay should be extended, is not applicable to the present case. This would revert to the position of the first stay application,” the bench said.
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