GOOGLE INDIA PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF

WA/50/2018

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Google India Private Limited filed writ appeals challenging the interim stay order modifications made by the Hon'ble Single Judge, which were originally issued by the Income Tax Appellant Tribunal, Bengaluru. The Tribunal's initial order required the appellant to deposit additional sums towards outstanding tax demands and to retain a portion of the tax demand in their bank account until the disposal of the appeals. The Hon'ble Single Judge modified this order, adjusting the amounts and conditions for the bank guarantees and payments for the assessment years 2009-10 to 2012-13. The High Court upheld the modifications, agreeing with the discretionary powers exercised by both the Tribunal and the Hon'ble Single Judge.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 765748 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-02-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: DEEPAK CHOPRA
• Keywords: Assessment years; Bank guarantee; Income Tax; Tax demand; Writ Appeals
• Section: 254(2A)

Judgement Text

" - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF FEBRUARY 2018 PRESENT THE HON’BLE MR.H.G.RAMESH ACTING CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR WRIT APPEALS No.50-52/2018 C/W WRIT APPEALS No.53-55/2018 , 56-58/2018 & 59-61/2018 (T-IT) BETWEEN: GOOGLE INDIA PRIVATE LIMITED NO.3, RMZ INFINITY, TOWER E 4TH FLOOR, OLD MADRAS ROAD BENGALURU-560 016 (PAN: AACCG0527D) REPRESENTED BY ITS AUTHORIZED SIGNATORY MS.GITANJLI DUGGAL ...APPELLANT (COMMON) (BY SRI DEEPAK CHOPRA FOR SRI ADITYA V. BHAT, ADVOCATES) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1(1) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU-560 095 - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 2 2. THE COMMISSIONER OF INCOME TAX-III, BMTC COMPLEX 80 FEET ROAD, KORAMANGALA BENGALURU-560 095 3. CITIBANK NA 506-507, LEVEL 5 PRESTIGE MERIDIAN 2 # 30 M.G.ROAD BENGALURU-560 001 REP. BY BRANCH MANAGER …RESPONDENTS (COMMON) (BY SRI K.V.ARAVIND, ADVOCATE FOR R1 AND R2) THESE WRIT APPEALS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE COMMON ORDER DATED 13.12.2017 PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITIONS NO.55578/2017, 55579/2017, 55580/2017 AND 55606/2017 (T-IT) FOR ASSESSMENT YEARS 2009-10, 2010-11, 2011-12 & 2012-13, RESPECTIVELY. THESE WRIT APPEALS, HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 08.01.2018, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH KUMAR J., PRONOUNCED THE FOLLOWING:- J U D G M E N T 1. These writ appeals are filed by the appellant- petitioner challenging order dated 13.12.2017 passed by the Hon’ble Single Judge in W.P.No.55578/2017 c/w. W.P.No.55579/2017, W.P.No.55580/2017 and W.P.No.55606/2017. - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 3 2. For the sake of convenience, parties shall be referred to as per their status in the writ petitions. 3. Heard Shri Deepak Chopra, learned Counsel for appellant and Shri K.V.Aravind, learned Counsel for respondents No.1 and 2. 4. Before the Hon’ble Single Judge, petitioner challenged a common order dated 08.12.2017 passed in Stay Petition No.271/Bang/2017 in ITA No.69/Bang/2014 and connected matters passed by the Income Tax Appellant Tribunal, Bengaluru Bench ‘C’, Bengaluru (hereinafter referred to as ‘the Tribunal’). By the said order, the Tribunal, while extending interim orders of stay, directed petitioner to deposit additional sums towards outstanding tax demands in respect of assessment years in question and to retain 20% of tax demand in petitioner’s bank account till the disposal of the appeals before the Tribunal. - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 4 5. The Hon’ble Single Judge, on consideration of the material on record, partially modified Tribunal’s order and directed the petitioner: • to furnish a bank guarantee for 25% of the tax demand in respect of assessment years 2009-10 and 2010-11; • to pay 20% of tax demand in respect of assessment year 2011-12 and to furnish bank guarantee to cover 25% of the tax demand; and • to furnish a bank guarantee for 45% of the tax demand in respect of assessment year 2012-13. 6. The Hon’ble Single Judge further directed the Tribunal to dispose of the appeals on or before 31.03.2018. 7. Shri Deepak Chopra, learned Counsel for the petitioner mainly contended that, Tribunal, in exercise of it’s power under Section 254 (2A) of the Income Tax Act, 1961 (‘the Act’ for short), could not have directed the petitioner to make additional payments to furnish bank guarantees or to maintain balance in the bank account. - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 5 8. The sheet anchor of Mr. Chopra’s argument was that, the Tribunal, while granting interim protection at the first instance, did consider the matters in entirety and granted stay orders with proper application of mind. Therefore, the Tribunal as also the Hon’ble Single Judge erred in law by imposing additional conditions. 9. Section 254 (2A) reads as follows:- “(2A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) [or sub- section(2)] of section 253: Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order: Provided further that where such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; so, however, that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed: - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 6 Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee.” 10. The tax demand and the amounts paid by the assessee-petitioner for different years have been tabulated in the impugned order as under:- Asst. Year Total demand Rs. Amount paid Rs. 2009-10 101,47,23,190 50,00,00,000 2010-11 159,27,89,430 80,00,00,000 2011-12 163,39,74,680 49,01,92,404 2012-13 486,46,79,020 145,94,03,706 Total 910,61,66,320 324,95,96,110 11. Admittedly, the appeals before the Tribunal are of the calendar years 2014, 2015, 2016 and 2017. The third proviso to Section 254 (2A), mandates that the period or periods extended under the second proviso shall not exceed 365 days and the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 7 12. It is not in dispute that for assessment years 2009-10 and 2010-11, petitioner has deposited about 50% of the tax demands. For the assessment years 2011-12 and 2012-13, it has deposited about 30% of the tax demands. 13. The Hon’ble Single Judge has recorded a finding that the Tribunal, while passing orders under Section 254 (2A) has followed this Court’s order dated 22.11.2017 in Writ Petitions No.52358-52359/2017, wherein, petitioner was directed to retain 20% of the tax demand in the bank. Keeping in view the said order, the Hon’ble Single Judge has issued the directions extracted supra. 14. In effect, the Hon’ble Single Judge has directed the petitioner to furnish bank guarantee equivalent to 25% of the tax demand for the assessment years 2009-10 and 2010-11. For the assessment year 2011-12, the Hon’ble Single Judge has directed the petitioner to deposit 20% of tax demand, which would in all account for 50% of tax demand for the assessment year and to furnish a bank - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 8 guarantee for 25% of the tax demand, in parity with orders made for assessment years 2009-10 and 2010-11. 15. So far as the assessment year 2012-13 is concerned, the Hon’ble Single Judge has modified Tribunal’s order by directing the petitioner to furnish bank guarantee equivalent to 45% of the tax demand in terms of the order passed by this Court in Writ Petition No.13601/2017. 16. An order under Section 254 (2A) of the Act is a discretionary order. Therefore, in our considered view, both Tribunal’s order as well as Hon’ble Single Judge’s order cannot be classified as those which any reasonable person cannot pass. Therefore, we see no error in the discretion exercised by the Tribunal and the Hon’ble Single Judge in modifying Tribunal’s order. Therefore, we refrain to interfere with the order impugned. 17. Resultantly, these appeals fail and are accordingly dismissed. - - WAs No.50-52/2018 C/W WAs No.53-55/2018, 56-58/2018 & 59-61/2018 9 18. In view of dismissal of the writ appeals, the pending interlocutory applications do not survive for consideration and the same are accordingly dismissed. Appeals dismissed. We make no order as to costs. Sd/- ACTING CHIEF JUSTICE Sd/- JUDGE cp* "