DCIT, Circle-2(2), Hyderabad, Hyderabad V. Bharathi Cement Corporation Private Limited, Hyd, Hyderabad

MA 21/HYD/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5703 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: S KALYANASUNDARAM
• Keywords: Application of stay; Extension of stay; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A. NO. 21/HYD/2017 (IN S.A NO. 13/HYD/2016) (ARISING OUT OF ITA NO. 696/HYD/2014) ASSESSMENT YEAR: 2009-10 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD VS M/S. BHARATHI CEMENT CORPORATION PRIVATE LIMITED, HYDERABAD [PAN: AADCR3079G] (APPLICANT) (RESPONDENT) FOR REVENUE : SMT. N. SWAPNA, DR FOR ASSESSEE : SHRI S. KALYANASUNDARAM, AR DATE OF HEARING : 02-06-2017 DATE OF PRONOUNCEMENT : 14-06-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THE PRESENT MISCELLANEOUS APPLICATION IS PREFERRED BY THE DEPARTMENT AGAINST THE STAY ORDER GRANTED BY THE ITAT IN I TA NO. 696/HYD/2014. CONDONATION: 2. THE PRESENT MISCELLANEOUS APPLICATION IS FILED B Y THE AO WITH A DELAY OF 293 DAYS AND AO HAS FILED AN AFFIDA VIT STATING THAT THE AUTHORISED LETTER FROM THE PR.CIT-2, HYDERABAD WAS RECEIVED ON 27-03-2017. DELAY IN FILING THE MISCELLANEOUS A PPLICATION IS 2 M.A. NO. 21/HYD/2017 DUE TO LATE RECEIPT OF THE AUTHORISATION LETTER FROM THE OFFICE OF THE PR.CIT-2, HYDERABAD. AO PRAYED FOR CONDONATION OF DELAY AND PASS NECESSARY ORDERS IN THE INTEREST OF JUSTICE. CON SIDERING THE AFFIDAVIT FILED BY THE AO, WE CONDONE THE DELAY. 3. THE MISCELLANEOUS APPLICATION OF THE REVENUE IS AS UNDER: THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MA NUFACTURING AND SALE OF CEMENT UNDER THE BRAND NAME BHARATHI CE MENT FILED ITS RETURN OF INCOME FOR THE A.Y 2009-10 ON 30.09.2009 ADMITTING INCOME OF RS.2,91,01,250/-. THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 30-12- 2011 DETERMINING A DEMAND OF RS.32,09,48,108/-. AGGRIEVED WITH THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. ACCORDINGLY, DEMAND REDUCED TO RS.21,82,1 1,776/-. AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE ITAT, HYDERABAD WHICH IS PENDING FOR DISPOSAL. IN THE MEANTIME, THE ASSESSEE FILED STAY APPLICATIO N VIDE S.A.NO.89/HYD/2014 (ITA.NO.696/HYD/2014) SEEKING ST AY AGAINST RECOVERY OF OUTSTANDING DEMAND OF RS.21,82,11,776/- FOR THE ASST. YEAR 2009-10. THE HON'BLE ITAT VIDE ITS ORDER DATED 16.0 5.2014 REJECTED THE PRAYER OF THE ASSESSEE FOR GRANT OF STAY, BUT POSTE D THE CASE FOR EARLY HEARING ON 01-07-2014. ON 27-08-2014 THE HON'BLE IT AT VIDE ITS AD- INTERIM ORDER DATED 27.08.2014 IN S.A.NO.89/HYD/201 4 STAYED THE DEMAND OUTSTANDING FOR A PERIOD OF SIX MONTHS OR TI LL THE DISPOSAL OF THE APPEAL OF THE ASSESSEE, WHICHEVER IS EARLIER. FURTHER, THE ASSESSEE FILED ANOTHER STAY PETITION S EEKING THE EXTENSION OF STAY OF OUTSTANDING DEMAND EARLIER GRANTED BY THE T RIBUNAL VIDE ITS ORDER IN S.A.NO.89/HYD/2014 DATED 27-08-2014 FOR A PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF THE APPEAL OF THE ASSESSEE, WH ICHEVER IS EARLIER. THE HON'BLE ITAT VIDE SA.NO. 04/HYD/2015 ARISING OUT OF (ITA.NO.696/HYD/2014) DATED 20.02.2015 EXTENDED THE STAY OF DEMAND ALREADY GRANTED FOR A FURTHER PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF THE APPEAL OF THE ASSESSEE, WHICHEVER IS EARLIER. FURTHER, THE ASSESSEE AGAIN FILED ANOTHER STAY PETI TION SEEKING THE EXTENSION OF STAY OF OUTSTANDING DEMAND EARLIER GRA NTED BY THE TRIBUNAL VIDE ITS ORDER DATED 20.02.2015. THE HON'BLE ITAT V IDE ITS ORDER IN S.A.NO.33/HYD/2015 ARISING OUT OF (ITA. NO.696/HYD/ 2014) DATED 21.08.2015 GRANTED STAY OF RECOVERY OF OUTSTANDING DEMAND FOR A FURTHER 3 M.A. NO. 21/HYD/2017 PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF THE AP PEAL OF THE ASSESSEE, WHICHEVER IS EARLIER. FURTHER, THE ASSESSEE AGAIN FILED ANOTHER STAY PETI TION SEEKING THE EXTENSION OF STAY OF OUTSTANDING DEMAND EARLIER GRA NTED BY THE TRIBUNAL VIDE ITS ORDER DATED 21.08.2015. THE HON'BLE ITAT V IDE ITS ORDER IN S.A.NO.13/HYD/2015 ARISING OUT OF (ITA.NO.696/HYD/2 014) DATED 19.02.2016 FURTHER GRANTED STAY OF THE RECOVERY OF THE OUTSTANDING DEMAND IN THE ASSESSMENT YEAR UNDER CONSIDERATION F OR A PERIOD OF 180 DAYS FROM THE DATE OF THIS ORDER (19.02.2016) OR TI LL THE DISPOSAL OF THE CORRESPONDING APPEAL BY THE ITAT, WHICHEVER IS EAR LIER. THUS, SO FAR THE HON'BLE ITAT HAS STAYED THE DEMAND OVER AND ABOVE 365 DAYS. IN THIS CONTEXT, THE OPERATIVE PART OF TH E PROVISIONS OF SECTION 254(2A) OF THE I.T.ACT, 1961, IS EXTRACTED BELOW : 'PROVIDED FURTHER THAT WHERE SUCH APPEAL IS NOT SO DISPOSED OF WITHIN THE SAID PERIOD OF STAY AS SPECIFIED IN T HE ORDER OF STAY, THE APPELLATE TRIBUNAL MAY, ON AN APPLICATION MADE IN THIS BEHALF BY THE ASSESSEE AND ON BEING SATISFIED THAT THE DEL AY 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 PER IOD OR PERIODS AS IT THINKS FIT; SO, HOWEVER, THAT THE AGGREGATE OF THE PERIOD ORIGINALLY ALLOWED AND THE PERIOD OR PERIODS SO EXTENDED OR AL LOWED SHALL NOT, IN ANY CASE, EXCEED THREE HUNDRED AND SIFTY-FIVE DA YS AND THE APPELLATE TRIBUNAL SHALL DISPOSE OF THE APPEAL WITH IN THE PERIOD OR PERIODS OF STAY SO EXTENDED OR ALLOWED. PROVIDED ALSO THAT IF SUCH APPEAL IS NOT SO DISPOSE D OF WITHIN THE PERIOD ALLOWED UNDER THE FIRST PROVISO OR THE P ERIOD 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 P ERIOD OR PERIODS, EVEN IF THE DELAY IN DISPOSING OF THE APPEAL IS NOT ATTRIBUTABLE TO THE ASSESSEE. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE HON'BLE TRIBUNAL MAY CONSIDER THE PLEA OF THE REVENUE FOR VACATING THE STAY GRANT ED BY THE HON'BLE ITAT VIDE ITS ORDER DATED 19.02.2016 IN S.A.NO. 13/HYD/2 016 ARISING OUT OF (ITA.NO.696/HYD/2014) AND PASS SUCH ORDERS IN THE I NTEREST OF JUSTICE. GROUNDS OF APPEAL :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE HON'BLE ITAT IS JUSTIFIED IN GRANTING THE STAY OVER AND ABO VE 365 DAYS WITHOUT CONSIDERING THE LIMITATION SO PLACED BY THE STATUTE UNDER PROVISO TO SECTION 254(2A) OF THE INCOME TAX ACT,19 61? 4 M.A. NO. 21/HYD/2017 2. ANY OTHER GROUND THAT MAY BE RAISED DURING THE HEAR ING. 4. LD.DR RELIED ON THE PETITION OF THE ASSESSING OFFIC ER (AO) WHEREAS, LD. COUNSEL STATED THAT THE IMPUGNED ORDER HAS ALREADY BEEN LAPSED AND STAY HAD BEEN FURTHER EXTENDED BY TWO MORE ORDERS DATED 24-08-2016 AND 27-02-2017. THEREFORE, THERE IS NO CAUSE OF ACTION TO BE CONSIDERED IN THIS MISCELLANEOUS APPLICATION. IT WAS FURTHER SUBMITTED THAT THE ITAT HAS ALREADY CONSID ERED THE ISSUE IN THE LATER ORDER AND SO, THE MISCELLANEOUS AP PLICATION IS NOT MAINTAINABLE. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE RECORD, WE ARE OF THE OPINION THAT THE ACTION OF THE AO AND CIT WITH REFERENCE TO THE PRESENT MISCELLANEOUS APPLICATION IS NOT ONLY IN BAD TASTE BUT ALSO MISCONCEIVED. FIRST OF ALL, AS S UBMITTED BY THE LD. COUNSEL, THE IMPUGNED ORDER ON WHICH THE MISC ELLANEOUS APPLICATION HAS BEEN PREFERRED HAS ALREADY LAPSED O N 23-08-2016. THEREFORE, THE ORDER WHICH WAS SOUGHT TO BE MODIFIED DOES NOT EXIST AS OF NOW. SO, QUESTION OF MODIFICATION DOES NOT ARISE IN THAT CASE. 6. FURTHER AS ADMITTED BY THE REVENUE IN THE FACTS STATED IN THE MISCELLANEOUS PETITION, STAY WAS ORIGINALLY GRANTED ON 27-08- 2014. THIS WAS EXTENDED AS THE SIX MONTHS PERIOD LAPSE D, BY ANOTHER ORDER DT. 20-02-2015. THAT ORDER WAS VALID UP TO 21 ST AUGUST, 2015. THE PERIOD OF 365 DAYS ALSO EXPIRED B Y THAT DATE, HOWEVER, THE STAY HAS BEEN EXTENDED BY THE ORDER DT. 21 -08-2015. IN FACT IF REVENUE HAD ANY GRIEVANCE, THE REVENUE SHO ULD HAVE PREFERRED A MISCELLANEOUS APPLICATION ON THE ORDER DT. 21-08-2015 WHICH WAS ISSUED, AFTER THE PERIOD OF ONE YEAR STATED TO BE IN- 5 M.A. NO. 21/HYD/2017 CONTRAVENTION OF THE PROVISIONS. HOWEVER, REVENUE DID NOT PREFER ANY MISCELLANEOUS APPLICATION ON THAT ORDER. THE O RDER DT. 19-02- 2016 [IMPUGNED ORDER] IS THE 4 TH OF THE ORDER GRANTING STAY BUT SECOND ORDER AFTER THE PERIOD OF ONE YEAR. AS ALREA DY STATED, THIS ORDER ALSO LAPSED, AS ANOTHER ORDER WAS ISSUED ON 24 -08-2016 AND SUBSEQUENTLY, THE PRESENT OPERATING ORDER IS DT. 27-02- 2017. IN ALL THE SUBSEQUENT ORDERS, VALID REASONS WERE GIVEN WHY EXTENSION OF THE STAY HAS BEEN GRANTED. THE PRESENT MISCELLANEOU S APPLICATION ON THE ORDER DT. 19-02-2016 WITH CONDONAT ION OF 293 DAYS IS ILLOGICAL AND MISCONCEIVED, AS VERY FIRST OR DER DT. 21-08- 2015 HAS NOT BEEN QUESTIONED. AS ALREADY STATED, THE O RDER DT. 19-02-2016 WAS ALSO LAPSED AND SO THERE IS NO NEED TO CONSIDER THE MISCELLANEOUS APPLICATION ON A LAPSED ORDER. 7. THE ISSUE OF EXTENSION BEYOND 365 DAYS HAS BEEN ELABORATELY DEALT WITH IN THE ORDER DT. 24-08-2016. AS THE SR.STANDIN G COUNSEL HAS RAISED OBJECTION, THESE OBJECTIONS WERE D EALT WITH AS UNDER: 2. LD. SR. STANDING COUNSEL FOR REVENUE SUBMITTED THAT TRIBUNAL HAS GRANTED STAY FOR A PERIOD OF 730 DAYS SO FAR AN D AS PER THE PROVISIONS OF SECTION 254(2A) PROVISO, THE ITAT CAN NOT GRANT OR EXTEND ANY STAY IN EXCESS OF 365 DAYS, EVEN IF IT IS FOR R EASONS NOT ATTRIBUTABLE TO ASSESSEE. LD. COUNSEL RELIED ON THE DECISION OF TH E HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. ECOM GILL COFFEE TRADING P. LTD., [362 ITR 204] (KA), WHEREIN THE HON'BLE COURT HAS CONSID ERED THAT .ANY OTHER UNDERSTANDING OR INTERPRETATION IS NOTHING SH ORT OF DOING VIOLENCE TO THE LANGUAGE OF THE STATUTORY PROVISIONS IN THE NAM E OF INTERPRETATION OF THE PROVISION AND PERMITTING AN ACTION WHICH IS CLE ARLY IN CONTRAVENTION OF THE STATUTORY PROVISIONS. 3. IN REPLY, LD. COUNSEL FOR ASSESSEE SUBMITTED THA T HON'BLE BOMBAY HIGH COURT IN THE CASE OF NARANG OVERSEAS P. LTD., VS. ITAT AND OTHERS [295 ITR 22] (BOM) HAS CONSIDERED THAT ..T HE POWER TO GRANT STAY OR INTERIM RELIEF HAS TO BE READ AS CO-EXTENSI VE WITH THE POWER TO GRANT FINAL RELIEF, THE OBJECT BEING THAT IN THE AB SENCE OF THE POWER TO GRANT INTERIM RELIEF THE FINAL RELIEF ITSELF MAY BE DEFEATED. THE POWER TO 6 M.A. NO. 21/HYD/2017 GRANT STAY OR INTERIM RELIEF BEING INHERENT OR INCI DENTAL IS NOT DEFEATED BY THE PROVISOS TO SECTION 254(2A). IT WAS FURTHER HE LD THAT THE POWER OF THE TRIBUNAL, THEREFORE, TO CONTINUE INTERIM RELIEF IS NOT OVER RIDDEN BY THE LANGUAGE OF THE THIRD PROVISO TO SECTION 254(2A). THERE WOULD BE POWER IN THE TRIBUNAL TO EXTEND THE PERIOD OF STAY OF A G OOD CAUSE BEING SHOWN AND ON THE TRIBUNAL BEING SATISFIED THAT THE MATTER COULD NOT BE HEARD AND DISPOSED-OFF FOR REASONS NOT ATTRIBUTABLE TO TH E ASSESSEE. LD. COUNSEL FURTHER RELIED ON THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS VS. KUMAR COTTON MILLS PVT. LTD., [180 ELT 434 (SC)]. LD. COUNSEL A LSO SUBMITTED THAT THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF PEPSI FO ODS PVT. LTD., VS. ACIT AND ANOTHER [WP(C) NO. 1334/2015 AND CM 2337/2015], IN WHICH CONSTITUTIONAL VALIDITY OF THE THIRD PROVISO TO SEC TION 254(2A) WAS CHALLENGED, HAS HELD THAT WHERE THE DELAY IN DISPOS ING OFF THE APPEAL IS NOT ATTRIBUTABLE TO ASSESSEE, THE TRIBUNAL HAS THE POWER TO GRANT EXTENSION OF STAY BEYOND 365 DAYS IN DESERVING CASE S. 4. CONSIDERING THE RIVAL SUBMISSIONS AND THE FACTS OF THE CASE AS SEEN FROM THE APPEAL FILE, WE ARE SATISFIED THAT TH E DELAY IS NOT ATTRIBUTABLE TO ASSESSEE. RESPECTFULLY FOLLOWING T HE JUDGMENTS OF THE HON'BLE BOMBAY HIGH COURT AND DELHI HIGH COURT SUPR A WHICH ARE IN FAVOUR OF ASSESSEE, WE ARE OF THE OPINION THAT THE STAY CAN BE EXTENDED, IN THE INTEREST OF JUSTICE, FOR A FURTHER PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF THE APPEAL WHICHEVER IS EARLIER. LD. S R. STANDING COUNSELS OBJECTION IN THIS REGARD CANNOT BE ACCEPTED AS STAY WAS ALREADY GRANTED FOR MORE THAN TWO YEARS ON THE FACTS OF THE CASE AN D THE LIMITATION SO PLACED BY THE STATUTE IN THE ITAT BY WAY OF PROVISO TO SECTION 254(2A) HAS ALREADY BEEN CONSIDERED EARLIER AND STAY WAS EX TENDED BEYOND THE PERIOD OF 360 DAYS AS EARLY AS 21-08-2015. THEREFOR E, THE OBJECTIONS RAISED AT PRESENT CANNOT BE CONSIDERED AS VALID. M OREOVER, WHEN THERE ARE TWO CONFLICTING JUDGMENTS OF THE NON-JURISDICTI ONAL HIGH COURTS, WE INTEND TO FOLLOW THE JUDGMENT IN FAVOUR OF ASSESSEE . IN VIEW OF THAT, LD. SR. STANDING COUNSELS OBJECTIONS ARE REJECTED AND STAY IS EXTENDED FOR A FURTHER PERIOD AS NOTED ABOVE. 7.1. SIMILAR OBJECTIONS WERE ALSO RAISED WHEN ASSESS EE PETITION FOR STAY HAS BEEN CONSIDERED IN THE ORDER DT. 27-02-20 17. HEREIN ALSO A DETAILED ORDER HAS BEEN PASSED FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE HIGH COURT IN THE MATTER. LOOKING AT THE FACTS OF THE CASE AND THE PRINCIPLES ON THE ISSUE, WE A RE OF THE FIRM OPINION THAT THERE IS NO MERIT IN THE REVENUES MISCELLA NEOUS APPLICATION; ACCORDINGLY THE SAME IS DISMISSED. 7 M.A. NO. 21/HYD/2017 8. SINCE THE AO AND PR.CIT CHOSE TO PREFER A MISCELLA NEOUS APPLICATION ON A NON-EXISTING ORDER AND APPROACHED TH IS FORUM IN THE GUISE OF MISCELLANEOUS APPLICATION, WE ARE OF THE OPINION THAT COST SHOULD BE LEVIED ON BOTH AO AND THE PR.CIT, SO THA T THEY WOULD BE CAREFUL IN APPROACHING THIS FORUM IN THE RIG HT CASE FOR A RIGHT CAUSE. WE HEREBY LEVY A COST OF RS. 1,000/- ( RUPEES ONE THOUSAND ONLY) ON THE AO AND ANOTHER RS. 1,000/- ON PR.CIT-2, HYDERABAD WHICH SHOULD BE PAID OUT OF THEIR SALARY A ND REMITTED TO GOVERNMENT OF INDIA WITHIN A PERIOD OF SIX WEEKS F ROM THE DATE OF THIS ORDER. COMPLIANCE SHOULD BE INTIMATED TO THE RE GISTRY FORTHWITH BY THE DDO OF THE OFFICERS. WITH THESE ORDERS, MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JUNE, 2017 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 14 TH JUNE, 2017 TNMM 8 M.A. NO. 21/HYD/2017 COPY TO : 1. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 2(2), HYDERABAD. 2. M/S. BHARATHI CEMENT CORPORATION PRIVATE LIMITED , 8-2-696, CARMEL POINT, ROAD NO. 12, BANJARA HILLS, HYDERABAD. 3. CIT (APPEALS)-III, HYDERABAD. 4. CIT-II, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.