DCIT CIR 7(1)(1), MUMBAI V. GOLDMAN SACHS INDIA SECURITIES P. LTD, MUMBAI

MA 173/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3441 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2012-2013
• Appeal Filed On: 07-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBE
• Keywords: Application of stay; Extension of stay

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL -KBENCH MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER (M.A. NO. 173/M/2019 IN S.A. NO. 492/MUM/2018)-AY 2 012-13) (M.A. NO. 174/M/2019 IN S.A. NO. 493/MUM/2018)-AY 2 010-11) ASST. CIT- 7(1)(1), MUMBAI. VS. GOLDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED, 951A, RATIONAL HOUSE, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI-400025 PAN: AAFCA6819F APPELLANT RESPON DENT APPLICANT BY : SH. SACHCHIDANAND DUBE (DR) RESPONDENT BY : SHRI MADHUR AGARWAL (AR) DATE OF HEARING :03 .05.2019 DATE OF PRONOUNCEMEN T :03 .05.2019 ORDER PER PAWAN SINGH, J.M. 1. THESE TWO MISCELLANEOUS APPLICATION FILED BY THE RE VENUE UNDER SECTION 254(2A) OF INCOME TAX ACT, 1961 (HEREINAFTER 'THE ACT') FOR RECALL OF THE STAY ORDER PASSED BY THE TR IBUNAL IN STAY APPLICATION NO. 492 & 493/MUM/2018 IN ITAS NO. 1428 /M/2017 & IN ITA NO. 115/MUM/2015 DATED 14.12.2018 FOR ASSESS MENT YEAR 2012-13 A& 2010-11 RESPECTIVELY. 2. IN THE MISCELLANEOUS APPLICATION NO. 173/MUM/2019, THE APPLICANT/REVENUE STATED THAT THE ORDER OF STAY OF RECOVERY OF OUTSTANDING DEMAND BE VACATED FORTHWITH FOR THE REA SONS THAT WHILE MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 2 GRANTING STAY IN S.A. NO. 492/MUM/2018 DATED 14.12. 2018 IN ITA NO. 1428/MUM/2017, THE DEMAND IS STAYED FOR MORE TH AN 365 DAYS. THE FIRST STAY WAS GRANTED BY TRIBUNAL ON 28.04.201 7, WHICH WAS EXTENDED FROM TIME TO TIME. 3. IN THE MISCELLANEOUS APPLICATION NO. 174/MUM/2019, THE APPLICANT/REVENUE STATED THAT THE ORDER OF STAY OF RECOVERY OF OUTSTANDING DEMAND BE VACATED FORTHWITH FOR THE REA SONS THAT WHILE GRANTING STAY IN S.A. NO. 493/MUM/2018 DATED 14.12. 2018 IN ITA NO. 1115/MUM/2015, THE DEMAND IS STAYED FOR MORE TH AN 365 DAYS. THE FIRST STAY WAS GRANTED BY TRIBUNAL ON 28.04.201 7, WHICH WAS EXTENDED FROM TIME TO TIME. 4. IT IS FURTHER STATED THAT AS PER THIRD PROVISO TO S ECTION 254(2A) THE STAY BEYOND 365 DAYS WILL STAND VACATED AFTER EXPIRY OF THE SAID PERIOD AND THAT THE DEPARTMENT MAY BE PERMITTED TO PROCEED WIT H RECOVERY ACTION FOR OUTSTANDING DEMAND. IN THE PRAYER CLAUSE, THE A PPLICANT PRAYED FOR OUT OF TURN HEARING OF THE APPLICATION (APPEAL). 5. THE LEARNED SR. D.R. FOR REVENUE STATED THAT A TOTA L OUTSTANDING/BALANCE TAX DEMAND IN THIS CASE FOR A.Y . 2012-13 IS RS. 9,95,61,730/- AND SIMILARLY FOR ASSESSMENT YEAR 20 10-11, THE DEMAND IS RS. 1,24,56,660/-. THE LD. DR FOR THE REV ENUE PRAYED FOR VACATION OF STAY AFTER THE EXPIRY OF THIS PERIOD, I .E. 365 DAYS. THE LD. D.R. FOR THE REVENUE WAS ASKED TO POINT OUT ANY MIS TAKE APPARENT MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 3 FROM RECORD IN THE ORDER OF THE TRIBUNAL. THE LD. D R SUBMITS THAT HIS PRAYER IS FOR VACATION OF STAY IN VIEW OF THE 3RD P ROVISO TO SECTION 254(2A) . FURTHER THE LEARNED D.R. RELIED ON THE RECENT DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ASIAN RESURFACING OF ROAD AGENCY P. LTD. AND OTHERS VS. CENTRAL BUREAU OF INV ESTIGATION IN CRIMINAL APPEAL NOS. 1375 & 1376 OF 2013, JUDGEMENT DATED 28.03.2018. THE LEARNED SR. D.R. ARGUED THAT IN THI S CASE THE HON'BLE SUPREME COURT ORDERED THAT ALL THE CASES HELD UP DU E TO STAY ORDER WILL AUTOMATICALLY RESTART AT THE END OF SIX MONTHS FROM THE DATE OF THE ORDER OF THE HON'BLE SUPREME COURT. BUT IN EXCEPTIO NAL CASES IF THE JUDGE THINKS THAT THE STAY ORDER SHOULD CONTINUE FO R SOME MORE TIME, THE JUDGE WOULD HAVE TO OUTLINE THE REASONS IN A WR ITTEN ORDER. THE SIX MONTH RULE WOULD ALSO APPLY TO ALL STAY GRANTING OR DERS GRANTED BY COURTS. IN THIS LINE THE LEARNED SR. D.R. ALSO REQU ESTED FOR VACATION OF THE STAY IN THIS CASE. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITS THAT APPEAL FOR ASSESSMENT YEAR 2012-13 IN ITA NO. 1428/ MUM/2017 HAS ALREADY BEEN ADJUDICATED BY THE TRIBUNAL VIDE ORDER DATED 22.02.2019. THE REVENUE HAS FILED THE PRESENT APPLICATION ON 07 .03.2019 WITHOUT VERIFYING THE FACT. THEREFORE, THE MISCELLANEOUS AP PLICATION NO. 173/MUM/2019 IS NOT MAINTAINABLE AND MAY BE TREATED AS INFRUCTUOUS. FOR MISCELLANEOUS APPLICATION NO. 174/MUM/2019, THE LD. AR MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 4 SUBMITS THAT THE STAY FOR ASSESSMENT YEAR 2010-11 W AS FURTHER EXTENDED FOR SIX MONTH OR TILL THE DISPOSAL OF APPE AL WHICHEVER IS EARLIER, ON 29.03.2019 VIDE S.A NO. 147/MUM/2019. T HUS, THIS MISCELLANEOUS APPLICATION IS ALSO NOT MAINTAINABLE. 7. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE CASE LA W RELIED BY APPLICANT/ REVENUE IS NOT APPLICABLE AS ON SIMILAR APPLICATIONS FILED BY REVENUE, THE CO-ORDINATE BENCH OF MUMBAI TRIBUNAL I N M.A. NO. 143/MUM/2019 DATED 15.03.2019 HAS DISTINGUISHED THE RATIO OF DECISION OF HONBLE SUPREME COURT IN ASIAN RESURFAC ING OF ROAD AGENCY P. LTD. AND OTHERS VS. CENTRAL BUREAU OF INV ESTIGATION (SUPRA). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND PERUSED THE PROVISIONS OF SECTION 254(2A) OF THE ACT. WE HA VE ALSO DELIBERATED ON THE CASE LAW RELIED BY LD. REPRESENT ATIVE OF THE PARTIES. WE HAVE NOTED THAT APPEAL FOR ASSESSMENT YEAR 2012- 13 IN ITA NO. 1428/MUM/2017 HAS ALREADY BEEN ADJUDICATED BY THIS TRIBUNAL VIDE ORDER DATED 22.02.2019.THEREFORE, MISCELLANEOUS NO. 173/MUM/2019 HAS BECOME INFRUCTUOUS AND THEREBY DISMISSED. 9. SO FAR AS MISCELLANEOUS APPLICATION NO. 174/MUM/201 9 IS CONCERNED. WE HAVE NOTED THAT THE CO-ORDINATE BENCH OF TRIBUNAL IN SIMILAR MISCELLANEOUS APPLICATION FILED BY REVENUE FOR VACATION OF STAY IN DCIT VS. PIRAMAL ENTERPRISES IN M.A. NO. 14 3/MUM/2019 MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 5 AFTER CONSIDERING THE IDENTICAL CONTENTION OF THE R EVENUE HAS PASSED THE FOLLOWING ORDER: 4 . WE HAVE HEARD THE RIVAL CONTENTIONS AND GIVEN THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE GONE THROUGH THE SAID ORDER IN THE STAY APPLICATION NO. 453/MUM/2018 FOR A.Y. 2011-12 DATED 04.12.2018 AND NOTED THAT THE TRIBUNAL HAS CATEGORICALLY NOTED A FINDING OF FACT THAT APPEALS FOR ASSESSMENT YEARS 2009-10, 2010-11 AND APPEAL FOR A. Y. 2011-12 WAS FIXED FOR HEARING ON VARIOUS DATED BUT THE MATTER WAS ADJ OURNED ON ACCOUNT OF WANT OF TIME OR ANY OTHER REASON. THE ASSESSEE CANNOT BE FAULTED AT THIS STAGE OR NON-DISPOSAL OF APPEAL CANNOT BE ATTRIBUTED TO THE ASSESSEE. IN TERMS OF THIS THE STAY WAS EXTENDED FOR FURTHER 180 DAYS FROM DATE OF ORDER, I.E. 04.12.2018 AND THE APPEAL FOR A.Y. 2011-12 WAS FIXED FOR HEARING O N 31.01.2019. THIS APPEAL WAS ADJOURNED TO 03.04.2019 DUE TO PAUCITY OF TIME AS THE APPEAL FOR A.Y. 2009-10 WAS HEAD ON THAT VERY DAY AND THE ORDER IS RESERVED AND AWAITED AS INFORMED BY THE LEARNED COUNSEL FOR THE ASSESSEE. W E HAVE GONE THROUGH THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CAS E PEPSI FOOD (P) LTD. (SUPRA) AND CONSCIOUS OF THE FACT THAT THE HON'BLE DELHI HIGH COURT HAS STRUCK DOWN THE ADDITION OF EXPRESSION BY VIRTUE OF FINANCE ACT , 2008 BY HOLDING THE SAME AS VIOLATIVE OF NON-DISCRIMINATORY CLAUSE OF ARTICLE 14 OF THE CONSTITUTION OF INDIA. THE SAID EXPRESSION WAS INTR ODUCED BY FINANCE ACT , 2008 AND THE EXPRESSION WAS THAT, 'EVEN IF THE DELA Y IN DISPOSING OF THE APPEAL IS NOT ATTRIBUTABLE TO THE ASSESSEE', THE SAME WAS STRUCK DOWN AND THIS WAS FURTHER INTERPRETED BY THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF NARANG OVERSEAS (P) LTD. (SUPRA). AS REGARD THE EXTENSION OF STAY BEYOND 365 DAYS THE HON'BLE BOMBAY HIGH COURT HAS CATEGORICALLY CONSIDE RED THIS DECISION IN THE CASE OF TATA TELESERVICES (MAHARASHTRA) LTD. (SUPRA ) AND HELD THAT THIS COURT (HON'BLE BOMBAY HIGH COURT) HAS CONSISTENTLY TAKEN A VIEW THAT THE TRIBUNAL HAS POWERS TO EXTEND STAY EVEN AFTER SUBSTITUTION O F 3RD PROVISO TO SECTION 254(2A) OF THE ACT. EVEN THIS FACT IS CLEAR FROM VARIETY O F CASE LAW REFERRED TO ABOVE AND DISCUSSED ABOVE. AS REGARDS THE DECISION OF THE HON'BLE SUPREME COURT IN M/S. PIRAMAL ENTERPRISE LTD. THE CASE OF A SIAN RESURFACING OF ROAD AGENCY P. LTD. (SUPRA) WE NOTED THAT THE CONTEXT OF THE ISSUE BEFORE THE MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 6 HON'BLE SUPREME COURT WAS CRIMINAL JURISDICTION REG ARDING THE PREVENTION OF CORRUPTION ACT AND THE CASES PENDING AT TRIAL STAGE AND THE PROCE EDINGS STAYED BY THE HON'BLE HIGH COURT. THIS ISSUE HAS BEEN DEAL T WITH BY THE HON'BLE SUPREME COURT IN THE CASE OF ASIAN RESURFACING OF R OAD AGENCY P. LTD. VIDE PARAS 36 & 37 AS UNDER: - '36. THUS, WE DECLARE THE LAW TO BE THAT ORDER FRAM ING CHARGE IS NOT PURELY AN INTERLOCUTORY ORDER NOR A FINAL ORDER. JURISDICT ION OF THE HIGH COURT IS NOT BARRED IRRESPECTIVE OF THE LABEL OF A PETITION, BE IT UNDER SECTIONS 397 OR 482 CR.P.C . OR ARTICLE 227 OF THE CONSTITUTION. HOWEVER, THE SAID JURISDICTIO N IS TO BE EXERCISED CONSISTENT WITH THE LEGISLATIVE POLICY TO ENSURE EXPEDITIOUS DISPOSAL OF A TRIAL WITHOUT THE SAME BEING IN ANY M ANNER HAMPERED. THUS CONSIDERED, THE CHALLENGE TO AN ORDER OF CHARGE SHO ULD BE ENTERTAINED IN A RAREST OF RARE CASE ONLY TO CORRECT A PATENT ERROR OF JURISDICTION AND NOT TO RE- APPRECIATE THE MATTER. EVEN WHERE SUCH CHALLENGE IS ENTERTAINED AND STAY IS GRANTED, THE MATTER MUST BE DECIDED ON DAY-TO-DAY B ASIS SO THAT STAY DOES NOT OPERATE FOR AN UNDULY LONG PERIOD. THOUGH NO MANDAT ORY TIME LIMIT MAY BE FIXED, THE DECISION MAY NOT EXCEED TWO-THREE MONTHS NORMALLY. IF IT REMAINS PENDING LONGER, DURATION OF STAY SHOULD NOT EXCEED SIX MONTHS, UNLESS EXTENSION IS GRANTED BY A SPECIFIC SPEAKING ORDER, AS ALREADY INDICATED. MANDATE OF SPEEDY JUSTICE 37 APPLIES TO THE PC ACT CASES AS WELL AS OTHER CASES WHERE AT TRIAL STAGE PROCEEDINGS ARE STAYED B Y THE HIGHER COURT I.E. THE HIGH COURT OR A COURT BELOW THE HIGH COURT, AS THE CASE MAY BE. IN ALL PENDING MATTERS BEFORE THE HIGH COURTS OR OTHER COU RTS RELATING TO PC ACT OR ALL OTHER CIVIL OR CRIMINAL CASES, WHERE STAY OF PR OCEEDINGS IN A PENDING TRIAL IS OPERATING, STAY WILL AUTOMATICALLY LAPSE AFTER S IX MONTHS FROM TODAY UNLESS EXTENDED BY A SPEAKING ORDER ON ABOVE PARAMETERS. S AME COURSE MAY ALSO BE ADOPTED BY CIVIL AND CRIMINAL APPELLATE/ REVISIONAL COURTS UNDER THE JURISDICTION OF THE HIGH COURTS. THE TRIAL COURTS M AY, ON EXPIRY OF ABOVE PERIOD, RESUME THE PROCEEDINGS WITHOUT WAITING FOR ANY OTHER INTIMATION UNLESS EXPRESS ORDER EXTENDING STAY IS PRODUCED. 37. THE HIGH COURTS MAY ALSO ISSUE INSTRUCTIONS TO THIS EFFECT AND MONITOR THE SAME SO THAT CIVIL OR CRIMINAL PROCEEDINGS DO N OT REMAIN PENDING FOR UNDULY PERIOD AT THE TRIAL STAGE. THIS WAS ALSO CONFRONTED TO THE LEARNED SR. D.R., W HERE THEY HAVE RAISED THE ISSUE OF EXCEEDING 365 DAYS BEFORE THE TRIBUNAL AT THE TIME OF EXTENSION OF THE SAY VIDE ORDER DATED 04.12.2018, THE LEARNED SR . D.R. COULD NOT REPLY TO THE SAME. WE NOTED THAT THIS JUDGEMENT OF HON'BLE S UPREME COURT WILL NOT HELP THE REVENUE FOR THE REASON THAT EVEN THE LEGIS LATURE IN THIS PROVISION OF SECTION 254(2A) INTRODUCED THIRD PROVISO VIDE FINANCE ACT , 2008 AND ALLOWED THE PERIOD FOR GRANTING OF STAY NOT EXCEEDI NG 365 DAYS IN NORMAL CIRCUMSTANCES. HENCE THE LEGISLATURE WAS CONSCIOUS OF THE FACT THAT THERE ARE CIRCUMSTANCES WHERE STAY HAS TO BE GRANTED BEYOND S IX MONTHS AS THE FACTS MA 173 & 174 MUM 2019-GO LDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED 7 REQUIRES IN THE EXCEPTIONAL CASES. WE HAVE GONE THR OUGH THE SAID ORDER AND NOTICED THAT NO SUCH PLEA WAS PLACED BEFORE THE TRI BUNAL AT THE TIME OF HEARING OR FROM RECORD WE COULD NOT TRACE SUCH ARGU MENTS OR PLEA. HENCE TAKING INTO CONSIDERATION ALL THE FACTS AND CIRCUMS TANCES, WE ARE OF THE VIEW THAT THE HON'BLE HIGH COURT HAS STRUCK DOWN THE EXP RESSION, 'EVEN IF THE DELAY IN DISPOSING OF THE APPEAL IS NOT ATTRIBUTABL E TO THE ASSESSEE' AS SUBSTITUTED BY 3RD PROVISO TO SECTION 254(2A) OF THE ACT AND TAKEN A VIEW THAT THE TRIBUNAL HAS POWER TO EXTEND STAY EVEN BEY OND 365 DAYS AND EVEN AFTER THE SUBSTITUTION OF 3RD PROVISO TO SECTION 254(2A) OF THE ACT. HENCE, RESPECTFULLY FOLLOWING THE ABOVE REFERRED DECISIONS , DISCUSSING LEGAL POSITIONS, WE DISMISS THIS MISCELLANEOUS APPLICATIO N OF THE REVENUE. 10. CONSIDERING THE DECISION OF TRIBUNAL ON SIMILAR MISCELLANEOUS APPLICATION AND RESPECTFULLY FOLLOWING THE SAME, TH E PRESENT MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COUR T ON 3 RD MAY, 2019. SD/- SD/- G. MANJUNATHA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATE: 03.05.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR K BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI