ITAT Grants Massive Relief: Xiaomi Receives 180-Day Stay on ₹10,833 Crore Tax Demand Amid Procedural Delays

ITAT Grants Massive Relief: Xiaomi Receives 180-Day Stay on ₹10,833 Crore Tax Demand Amid Procedural Delays​

ITAT Rules in Favor of Xiaomi, Granting Extended Stay Against Tax Revenue​

The Income Tax Appellate Tribunal (ITAT) has provided significant temporary relief to Xiaomi Technology India Pvt. Ltd., extending the stay on a substantial tax demand amounting to approximately ₹10,833 crore. The Bengaluru bench of the ITAT ruled that this extension is warranted because the delay in disposing of the complex 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 tribunal clarified that the stay would remain in effect for a period of 180 days or until the matter is finally disposed of, whichever occurs earlier. The tribunal noted that the original stay had been granted in August 2023 and has subsequently undergone multiple extensions while waiting for a hearing date.

Addressing Procedural Delays and Tax Security​

The core finding by the bench was that the appeal could not be heard promptly because the Departmental Representative (DR) consistently sought adjournments related to an issue concerning the Document Identification Number (DIN). Consequently, the ITAT concluded that Xiaomi should not be held responsible for the delay in adjudication.

The tribunal accepted submissions regarding the security provided to the revenue by the company. Xiaomi had informed the bench that fixed deposits, valued at around ₹3,700 crore and having risen to approximately ₹4,157 crore with accrued interest until May 31, were already attached by the tax authorities. This attachment provides substantial assurance to the revenue department.

Tribunal Directs Expeditious Hearing of Appeals​

A bench comprising Vice President Prashant Maharishi and Judicial Member Keshav Dubey accepted these submissions before extending the stay. The tribunal also noted that Xiaomi possesses several other pending appeals across various benches, all of which have been granted stays previously.

Crucially, the ITAT further observed that one of the issues in question relates to a DIN requirement, which has since been addressed via a retrospective amendment under the Finance Act, 2026. To move towards final resolution, the tribunal directed that all pending appeals involving Xiaomi must be scheduled for hearing on September 21, 2026, ensuring an expeditious process.

The order explicitly stated: “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.”

Expert Viewpoint: A Reassuring Message for Taxpayers​

Amit Maheshwari, Managing Partner at AKM Global, hailed the ruling as a “welcome and pragmatic” outcome for taxpayers who are navigating lengthy litigation processes before the ITAT. He pointed out that in many appeals, petitioners face situations where their cases remain unheard due to procedural constraints or adjournments sought by the Department.

Maheshwari specifically referenced the Xiaomi case, stating that the tribunal correctly recognized that the delay was not attributable to the taxpayer while simultaneously considering the robust security provided by the attached fixed deposits to the revenue. He added that the ruling sends a crucial reassuring message that taxpayers acting in good faith should not face prejudice due to systemic delays.

The latest order provides necessary temporary respite to Xiaomi, solidifying its status as one of the most prominent and lengthy corporate tax disputes currently pending before appellate bodies.