M/S TDK INDIA PRIVATE LIMITED,KOLKATA V. DCIT CIRCLE 11(1), KOLKATA, DELHI AND KOLKATA

SA 21/KOL/2024

AI Insights

The case involves M/s. TDK India Private Limited, which filed a stay petition against a tax demand of Rs. 53,25,92,126, comprising tax and interest, for the assessment year 2021-22. The initial demand was reduced to Rs. 24,49,40,000 following a rectification order. The assessee argued that the issues leading to the demand were covered in their favor by previous judgments and that they were entitled to substantial refunds for earlier years, which could offset the demand. The Department of Income Tax opposed the stay. The Tribunal considered the balance of convenience and the merits of the case, leading to the decision to stay the demand partially.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396535 (ITAT-KOLKATA)
• Appeal Type: Stay Application
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Application of stay
• Section: 143(3); 154; 244A

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER S.A. No.: 21/KOL/2024 Arising out of I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited Vs. DCIT, Circle-11(1), Kolkata (Appellant) (Respondent) PAN: AAACI6950Q Appearances: Assessee represented by : Arijit Chakravorty, Adv. Department represented by : S.B. Chakraborthy, JCIT, Sr. DR. Date of concluding the hearing : 23-May-2025 Date of pronouncing the order : 28-May-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: The assessee has filed the present Stay Petition SA No. 21/KOL/2024 in ITA No. 2565/KOL/2024 dated 17.12.2024 requesting for stay of demand of Rs. 53,25,92,126/- which comprises tax of Rs. 35,04,70,628/- and interest of Rs. 18,21,21,498/-. 2. It is submitted in the stay application that the applicant has filed an application for stay of demand on 26.11.2024 with the Assessing Officer (hereinafter referred to as Ld. 'AO') and the same has been Page | 2 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. disposed of by the Ld. AO asking the assessee to pay the demand raised by him without giving any cogent reason for not granting stay of demand. The reasons for seeking stay are mentioned in Annexure-3 of the application. It is stated in the petition that there is no need for security as issues are covered in favour of the assessee and the assessee has requested that the entire outstanding demand may be stayed till the disposal of the appeal by the Tribunal. It was informed to the Bench that the appeal of the assessee has been fixed on 24.07.2025. 3. Further, during the hearing before us, the assessee had earlier filed a letter dated 27 March, 2025 stating that the assessee has received the revised demand notice u/s 156 of the Act along with the computation sheet after rectification order u/s 154 r.w.s. 143(3) of the Act dated 25.03.2025 and the demand has been reduced to Rs. 24,49,40,000/-. A copy of the demand notice is stated to be enclosed in Annexure-3A and 3B. However, the copies are not enclosed. It is submitted in the letter dated 27.03.2025 that the total demand would be substantially reduced after considering the issues that are covered in favour of the assessee and the mistake apparent from record related to interest u/s 234C of the Act, which is to be reduced to Rs. 31,78,184/- in place of Rs. 1,31,32,213/- charged. Accordingly, the balance outstanding demand is of Rs. 3,92,12,439/- on account of rectification and mistake apparent from record and the issues covered in favour of the assessee. It is stated that the assessee is entitled to refund along with interest u/s 244A of the Act for Rs. 31,29,39,494/- for AYs 2011-12, 2012-13 and 2013-14 and it has been requested that the entire demand may be stayed. In para 4.2 of the letter dated 27.03.2025, it is stated that without prejudice to the above contention of the assessee that the entire demand should be stayed, the ITAT may Page | 3 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. adjust 20% of the balance outstanding demand i.e. Rs.78,42,487/- against the refund of AY 2011-12 to AY 2012-13 and balance refund amounting to Rs. 30,50,97,006/- should be refunded to the assessee as per the provisions of the Act after passing the OGE. In the reconciliation of tax demand raised in the demand notice, the assessee has submitted that out of the total tax demand which is now reduced to Rs. 24,49,40,000/-, a sum of Rs. 20,40,66,500/- relates to the issues which are covered by the assessee’s own case/ITAT’s judgment in other case and only a sum of Rs. 4,08,73,482/- is not covered by the judicial precedents. The Ld. DR opposed the request of the assessee for granting stay. 4. During the course of the hearing before the Bench, the assessee has also filed an application dated 1st May, 2025 stating as under: “1.1. We refer to Stay Application No. SA 21/KOL/2024 filed on 17 December 2024 for the stay of the outstanding demand for AY 2021-22 amounting to INR 53,25,92,130. Based on the rectification order under section 154 read with section 143(3) dated 25 March 2025, the outstanding amount has been reduced to INR 24,49,40,000. 1.2. During the hearing of the Stay Application on 28 March 2025 before the Hon'ble ITAT. the Applicant submitted that it is entitled for refund amounting to INR 37,07,14,468. 1.3. Hon'ble ITAT has given direction to Ld. AO to process the pending refund claims of the applicant for all the years and submit a report/copy of orders for each assessment year detailing the refund due to the Applicant for each year. 1.4. The Applicant has provided details of its refund claims to Ld. AO for various AYs. The details of these submissions are tabulated below: Page | 4 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. Sr. No Date Remarks 1 31 January 2025 Application along with all the relevant detail/ documents filed before Ld. AO to process the refund due for AY 2012-13 2 3 February 2025 Application along with all the relevant details/ documents filed before Ld. AO to process the refund due for AY 2011-12 3 7 February 2025 Application along with all the relevant details/ documents filed before Ld. AO to process the refund due for AY 2013-14 4 27 March 2025 Follow-up letter filed before Ld. AO to process the refund due for AY 2011-12 to AY 2013-14 5 4 April 2025 High Court Order dated 6 January 2023 shared via email with Ld. AO to process the refund due for AY 2011-12 to AY 2013- 14 1.5. The Applicant has re-submitted all the relevant details for AY 2011-12 to AY 2013-14 along with the relevant details of AY 2014-15 to AY 2017-18 to the Ld. AO to process the refund due to various years vide its letter dated 21 April 2025 (submitted on 22 April 2025). 1.6. With an intention to expedite Hon'ble ITAT's direction to determine the refund for various years, our consultant from Pune visited Ld. AO's office in Kolkata on 25 April 2025 and spent considerable time explaining the submission in detail. Further, pursuant to meeting and instruction from Ld. AO, we have again submitted the relevant data for AY 2011-12 to AY 2013- 14 via multiple emails dated 28 April 2025 and physical copies of all the documents were also submitted to Ld. AO's office on 28 April 2025. 1.7. Despite the best-efforts. Ld. AO has able to process the order giving effect to for only AY 2011-12 to AY 2013-14. However, the copies of orders have neither been uploaded on income tax portal nor served to the applicant yet therefore, the applicant is unaware of the total refund processed by the Ld. AO for these years. 1.8. The Applicant submits that as per its computation for AY 2011-12 to AY 2013-14 as provided to the Ld. AO, it is entitled to refund of INR 31,29,39,494 as per the below computation (copy of detailed computation enclosed by way of Annexure 1 to Annexure 3): Sr. No AY Total Refund (Principal Amount) Interest u/s 244A*. Total Refund 1 AY 2011-12 6,74,34,271 3,09,72,700 9,84,06,971 2 AY 2012-13 5,46,07,334 2,59,38,484 8,05,45,818 3 AY 2013-14 10,97,68,683 2,42,18,022 13,39,86,705 Total 23,18,10,288 8,11,29,206 31,29,39,494 *Interest computed till the time of filing the application to process the refund Page | 5 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. 1.9. In light of the above, the applicant submits that total outstanding demand for AY 2021-22 as per demand notice u/s 156 pursuant to order passed u/s 154 r.w.s 143(3) dated 25 March 2025 is INR 24,49,40,000. After considering the refund of AY 2011-12 to AY 2013-14 amounting to INR 31,29,39,494, this is sufficient to cover the 20% of the outstanding demand of INR 4,89,88,000 (i.e. 24,49,40,000*20%). 1.10. The Hon'ble ITAT may direct Ld. AO to provide a copy of the order(s) passed for AY 2011-12, AY 2012-13 and AY 2013-14 to enable the Applicant to make an effective representation before Hon'ble ITAT and also instruct the Ld. AO to pass the orders and determine the refunds of the other AYs.” 5. We have gone through the submissions made. In the submission dated 06.03.2025 in connection with the hearing scheduled on 07.03.2025, it is stated that out of the total tax demand of Rs. 53.34 Crore, demand relating to the issues covered by the assessee’s own case and in other cases of ITAT, Kolkata Bench’s judgments is Rs. 23.29 Crore and the balance amount of Rs. 30.05 Crore relates to issues which are passed contrary to the directions of the Dispute Resolution Panel for which rectification application was pending and which after the disposal of the rectification application has been worked out at Rs. 24.49 Crore. The Ld. AR drew our attention to the letter dated 01.05.2025 in which details of application made to the Ld. AO for processing of the refunds has been given and the details of computation of principal amount of refund of Rs. 23,18,10,288/- and interest amount of Rs. 8,11,29,206/- have been given as mentioned in para 4. 6. The assessee has also filed a copy of the rectification order dated 25.03.2025 in which the demand of Rs. 24,49,40,000/- has been mentioned for AY 2021-22. The assessee contends that it is entitled to refunds for AYs 2011-12, 2012-13 and 2013-14 as a result of quashing of the assessment orders by the Hon'ble Calcutta High Court and after passing OGE orders, the assessee is entitled to a substantial refund of Rs. 31,29,39,494/- which is as per the chart below: Page | 6 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. Sr. No AY Total Refund (Principal Amount) Interest u/s 244A* Total Refund 1 AY 2011-12 6,74,34,271 3,09,72,700 9,84,06,971 2 AY 2012-13 5,46,07,334 2,59,38,484 8,05,45,818 3 AY 2013-14 10,97,68,683 2,42,18,022 13,39,86,705 Total 23,18,10,288 8,11,29,206 31,29,39,494 It is further submitted that though the assessee has filed the application seeking orders for giving effect to the Hon'ble Calcutta High Court’s order for these three years before the Ld. AO, however, the applications are still pending for issue of refunds. 7. The Ld. DR could not controvert the submissions of the Ld. AR in this regard. 8. We have considered the submission made. The total refund for the three years due to the assessee, excluding the amount of interest u/s 244A of the Act, works out to Rs. 23,18,10,288/-. The demand outstanding for the impugned assessment year is Rs. 24,49,40,000/-, 20% of which works out to Rs. 4,89,88,000/-. Since the appeal is fixed for hearing on 24.07.2025, even without considering the merits of the case for the balance of convenience and as proposed by the assessee, the refund due as claimed by the assessee mentioned at Rs. 23,18,10,288/- can be utilized as a security against 20% of the outstanding demand. The Ld. AO is, therefore, directed to retain a sum of Rs. 4,89,88,000/- out of the principal amount of refund due on account of the orders giving effect for the three assessment years on account of quashing of the assessment orders by the Hon'ble Calcutta High Court and the rest of the demand of the assessee shall be stayed for a period of six months or the disposal of the appeal before the Tribunal, whichever is earlier. The assessee is directed not to seek any adjournment and in case the assessee chooses to do so, the stay granted shall automatically stand vacated. Page | 7 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. 9. The stay application of the assessee is thus allowed in view of the directions as above. Order pronounced in the open Court on 28th May, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.05.2025 Bidhan (P.S.) Page | 8 S.A. No.: 21/KOL/2024 AOO I.T.A. No.: 2565/KOL/2024 Assessment Year: 2021-22 M/s. TDK India Private Limited. Copy of the order forwarded to: 1. M/s. TDK India Private Limited, WBIDC Growth Centre, Kulia Kanchrapara Road, PO NS Sanatorium, Kalyani, Nadia, West Bengal, 741251. 2. DCIT, Circle-11(1), Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "