Oyo Hotels And Homes Private Limited v. Principal Commissioner Of Income-Tax Delhi - 7& Ors

$~59 *IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 9488/2025 OYO HOTELS AND HOMES PRIVATE LIMITED .....PetitionerThrough:Mr Ajay Vohra, Sr. Advocate withMr Manuj Sabharwal, Advocate. versus PRINCIPAL COMMISSIONER OF INCOME-TAX DELHI - 7& ORS......Respondents Through:Mr Puneet Rai, SSC. CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIAO R D E R%10.07.2025 CM APPLs. 40049/2025 and 40050/2025 1.Exemption allowed, subject to all just exceptions.2.The application is disposed of.W.P.(C) 9488/2025 and CM APPL. 40048/2025 3.Issue notice. Mr. Rai, the learned counsel appearing for the Revenue,accepts notice. 4.The petitioner has filed the present petition, inter alia, praying thatdirections be issued to the respondents not to treat the Assessee in defaultunder Section 220(6) of the Income Tax Act, 1961 [the Act] in view of theoutstanding demand of ₹11,39,93,05,320/- arising out of the assessment order dated 28.12.2022 in respect of Assessment Year 2021-22 till thedisposal of the petitioner’s appeal. 5.The petitioner had filed its return of income for AY 2021-22disclosing a loss of ₹8,59,11,33,141/-. The said return was picked up for scrutiny and the Assessing Officer passed an assessment order dated28.12.2022 assessing the petitioner’s income at ₹31,41,99,76,520/- as against the loss declared by the petitioner. The AO had, inter alia, added asum of ₹38,85,51,75,255/- which as received as premium on issuance of Compulsorily Convertible Preference Shares by the Assessee to its holdingcompany M/s Oravel Stays Ltd.The AO held that the premium was inexcess of the fair market value. 6.Admittedly, the issue whether share premium received by theAssessee on issuance of shares to its holding company could be taxed underSection 56(2)(viib) has been decided in favour of the Assessee and iscovered in favour of the Assessee by the ITAT’s decision in Assessee’s casefor AY 2018-19, albeit arising from an appeal preferred against an orderpassed under Section 263 of the Act. 7.If the aforesaid addition on account of the share premium is deleted,the demand, as sought to be raised, would stand extinguished. In the givenfacts, the learned Commissioner of Income Tax had also passed anorder dated 13.02.2024 granting stay of the recovery of the demand for aperiod of three months, subject to the petitioner depositing a sum of ₹1 crore, which the petitioner has deposited. By an order dated 31.07.2024, thestay was further extended by a period of six months effective from13.05.2024. 8.The petitioner has also filed an application for early disposal of itsappeal, which has not been considered as yet. 9.This court is informed that the petitioner’s appeal before the National Faceless Assessment Centre is at the final stage. In the peculiarfacts and circumstances of the case, we consider it apposite to stay theimpugned demand till the disposal of the petitioner’s appeal by NFAC. Thepetition is disposed of in the aforesaid terms. 10.Considering that the hearing was held by video conferencing on04.02.2025, we also request NFAC to dispose of the petitioner’s appeal asexpeditiously as possible and preferably within a period of eight weeks fromdate. 11.Pending application shall also stand disposed of. VIBHU BAKHRU, J JULY 10, 2025/tr TEJAS KARIA, J