The Income Tax Appellate Tribunal (ITAT) has extended the stay on a tax demand of about Rs 10,833 crore against Xiaomi Technology India Pvt. Ltd. for another 180 days, observing that the delay in disposal of the appeal was not attributable to the company but resulted from repeated adjournments sought by the Income Tax Department.
In an order pronounced on July 6, the Bengaluru bench of the ITAT said the stay would continue for 180 days or until the appeal is disposed of, whichever is earlier. The tribunal noted that the original stay was granted in August 2023 and has since been extended several times.
The bench observed that the appeal could not be heard because the Departmental Representative repeatedly sought adjournments on the ground that one of the issues involved related to the Document Identification Number (DIN). It therefore held that the delay in the disposal of the appeal could not be attributed to Xiaomi.
The company also submitted that fixed deposits worth about Rs 3,700 crore, which had increased to around Rs 4,157 crore with accrued interest till May 31, had already been attached by the tax authorities, providing substantial security to the revenue.
A bench comprising Vice President Prashant Maharishi and Judicial Member Keshav Dubey accepted the submissions and extended the stay. It also noted that Xiaomi has several pending appeals before coordinate benches where stays have already been granted.
The tribunal further observed that one of the issues involved relates to the DIN requirement, which has since been addressed through a retrospective amendment under the Finance Act, 2026. It directed that all pending appeals involving Xiaomi be listed for hearing on September 21, 2026, so they can be disposed of expeditiously. The tribunal order noted, “It is stated that appeal could not be disposed of because the learned DR sought adjournments on the ground that one of the issues involved related to DIN issues. Therefore, the delay in disposal of the appeal is not attributable to the assessee”.
An tax expert said the ruling is a “welcome and pragmatic” one for taxpayers facing prolonged litigation. “In many matters pending before the ITAT, taxpayers often find themselves in a difficult position where appeals remain unheard for reasons beyond their control, such as adjournments sought by the Department or other procedural constraints. Despite being fully prepared to argue their case, they continue to face the uncertainty of substantial outstanding tax demands and the burden of repeatedly seeking extensions of stay,” he said.
Referring to the Xiaomi case, he said the tribunal rightly recognised that the delay in disposal of the appeal was not attributable to the taxpayer while also taking into account the significant security already available to the revenue through attached fixed deposits. “The ruling sends a reassuring message that taxpayers acting in good faith should not be prejudiced by systemic delays and can expect continued protection from coercive recovery proceedings until their appeals are heard and decided,” he added.
The latest order provides temporary relief to Xiaomi, which is one of the largest pending corporate tax disputes.
