Virtusa (India) Pvt.Ltd., Hyderabad V. DCIT, Cir-3(1), Hyderabad

MA 68/HYD/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6616 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 13-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Keywords: Recovery proceedings; Application of stay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER M.A. NO.68/HYD/11 : ASST. YEARS: 2006-07. (IN SA NO.34/H/11) : VIRTUSA (INDIA) PRIVATE LIMITED, BEGUMPET, HYDERABAD. PAN: AABCV 4077 E) V/S- DCIT, CIR-3(3), HYDERABAD. (APPLICANT) (RESPONDEN T) APPLICANT BY : SHRI NAVEEN AGARWAL RESPONDENT BY : SRI B.V. PRASAD REDDY O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: BY THIS MISC. APPLICATION, THE ASSESSEE IS SEEKING THE TRIBUNAL TO AMEND ITS ORDER TO RECTIFY SOME MISTAKES AP PARENT FROM THE RECORD PASSED IN S.A. NO.34/HYD/20011 FOR THE ASSESSMENT YE AR 2006- 07. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE TRIBUNAL RELYING ON THE DECISION OF BOMBAY HIGH COUR T IN MAHINDRA & MAHINDRA LIMITED VS. UNION OF INDIA (1992) 59 ELT 50 5 (BOM) HELD THAT M.A.NO.68/HYD/11 VIRTUSA (INDIA) PVT. LTD., HYD. ====================== 2 DEPARTMENTAL AUTHORITIES WERE NOT JUSTIFIED IN RECOVER ING THE TAX DEMAND UNDER SECTION 226(3) AGAINST THE ASSESSEES BANKERS WHEN TH E STAY APPLICATION WAS PENDING BEFORE THE TRIBUNAL OR CIT. ACCORDINGLY, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO REFUND THE TAX RECOVERED FROM THE BANK TO THE ASSESSEE. HOWEVER, AT PARA-2 OF THE ORD ER, THE MEMBERS OF THE TRIBUNAL HAVE ERRONEOUSLY CONSIDERED TH E JUDICIAL PRECEDENTS WHICH WERE NEVER RELIED UPON BY THE ASSESSEE. THEREFORE, IT IS SUBMITTED THAT THE OMISSION ON THE PART OF THE TRIBU NAL TO CONSIDER THE JUDGMENTS RELIED UPON BY THE ASSESSEE CONSTITUTES A MIST AKE APPARENT FROM THE RECORD CALLING FOR RECTIFICATION. I T IS FURTHER SUBMITTED THAT DURING THE COURSE OF THE HEARING, THE TRIBUNAL P OSTED THE APPEAL FOR HEARING ON JUNE 9, 2011 AND DIRECTED THE ASSESSEE TO FIL E THE PAPER BOOKS, IF ANY, ON OR BEFORE 31 ST MAY, 2011 AND THE SAME WAS NOT MENTIONED IN THE ORDER OF THE TRIBUNAL. IN VIEW OF THE ABOVE, THE ASSESSEE SUBMITS THAT THE TRIBUNAL MAY BE PLEASED TO SUITAB LY AMEND ITS ORDER TO RECTIFY THE ABOVE MISTAKES, WHICH ARE APPAREN T FROM THE RECORD. 3. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE OPPOSED THE CONTENTIONS OF THE COUNSEL FOR THE ASSESSEE SEEK ING RECTIFICATION OF THE ORDER OF THE TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND TH AT THERE IS A TYPOGRAPHICAL ERROR IN PARAGRAPH-2 OF THE ORDER OF T HE TRIBUNAL DATED 25 TH MARCH, 2011, ON ACCOUNT OF WHICH THE CASE-LAW RELIED UPO N BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS MENTIONED AS I F THE SAME WAS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, AND IN THAT PROCESS, THE CASE LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE REMAINED OMITTED TO BE MENTIONED. IN VIEW OF THE A BOVE, WE RECTIFY THE M.A.NO.68/HYD/11 VIRTUSA (INDIA) PVT. LTD., HYD. ====================== 3 PENULTIMATE SENTENCE OF PARA-2 AND DIRECT THAT THE PEN ULTIMATE SENTENCE OF PARA-2 OF OUR ORDER DATED 25 TH MARCH 2011 SHOULD BE READ AS UNDER:- IN SUPPORT OF HIS CONTENTIONS, HE RELIED ON THE FO LLOWING DECISIONS: I) RPG ENTERPRISES LTD. VS. DCIT (2001) 251 ITR 20 (TRIB) (MUM -ITAT) AND II) MAHARASHTRA STATE ELECTRICITY BOARD VS. JCIT (2002) 81 ITD 299 (MUM -ITAT) INSTEAD OF THE FOLLOWING PENULTIMATE SENTENCE APPEARIN G IN PARA-2 OF OUR ORDER DATED 25 TH MARCH, 2011- IN SUPPORT OF HIS CONTENTIONS, HE RELIED ON THE FOL LOWING DECISIONS: I) BOMBAY HOUSING CORPORATION VS. ACIT (81 ITD 545) (BOM.) II) SOMAIYA ORGANICS (INDIA) LTD. VS. STATE OF U.P. (25 1 ITR 20 (SC) 5. NOW, WE MAY DEAL WITH THE ALLEGED MISTAKE POINT ED OUT WITH REGARD TO THE ISSUE OF REFUND OF TAX RECOVERED FROM TH E ASSESSEE BY THE DEPARTMENT WHEN THE STAY APPLICATION WAS PENDING WITH THE TRIBUNAL/CIT. WHILE ADJUDICATING THIS ISSUE, WE HAVE ALREADY CONSIDERED THE ABOVE CASE LAW RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE, VIZ. RPG ENTERPRISES LTD. (SUPRA) AND MAHARASHTRA ST ATE ELECTRICITY BOARD (SUPRA) AND FOUND THAT BOTH THESE CASES ARE DISTING UISHABLE ON FACTS AND THE CIRCUMSTANCES OF THE PRESENT CASE, THOUGH THE RELEVANT DECISIONS HAVE NOT BEEN SPECIFICALLY DISCUSSED. IN THE CASE OF RPG M.A.NO.68/HYD/11 VIRTUSA (INDIA) PVT. LTD., HYD. ====================== 4 ENTERPRISES LTD., THE TRIBUNAL HELD THAT THE POWER TO DIRECT TO REFUND OF TAX, WHEN THE STAY APPLICATION IS PENDING BEFORE THE T RIBUNAL, IS TO BE EXERCISED ONLY IN EXCEPTIONAL CASES AND THE TRIBUNAL FOUN D THAT THE CASE BEFORE IT FALLS WITHIN THE CATEGORY OF SUCH EXCEPTIONAL CASES I.E., MISUSE OF POWERS BY THE ASSESSING OFFICER FOR RECOVERING THE TAX BY BACK-DATING HIS ORDERS. IN THE CASE OF MAHARASHTRA STATE ELECTRICITY B OARD (SUPRA), THE IT AUTHORITIES WERE AWARE OF THE FACT THAT THE ASSE SSEE HAD APPROACHED THE TRIBUNAL FOR STAY OF RECOVERY OF TAX DE MAND AND THE STAY APPLICATION WAS PENDING FOR HEARING ON THE DATE OF RECOVERY, BUT STILL, THE DEPARTMENT PROCEEDED TO TAKE COERCIVE MEASUR ES FOR THE RECOVERY OF THE DEMAND. AS AGAINST THIS, IN THE CASE UN DER CONSIDERATION, THE APPLICATION FOR STAY OF DEMAND WAS PE NDING TILL 5.30 PM ON 9-3-2011 BEFORE THE CIT AND THE ASSESSEE FILED TH E STAY APPLICATION BEFORE THE TRIBUNAL ON 9-3-2011. BY THE TIME THE ASSESSEE FILED THE STAY APPLICATION BEFORE THE TRIBUNAL, THER E WAS NO ORDER FROM THE CIT ON STAY APPLICATION AND IT APPEARS THAT THE DE PARTMENT WAS NOT AWARE OF THE FACT THAT THE ASSESSEE HAD APPROACHED THE TR IBUNAL FOR STAY OF DEMAND. AS SUCH, THE CASE LAWS RELIED ON BY THE LEARN ED COUNSEL FOR THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF INSTANT CASE. IN THIS VIEW OF THE MATTER, EVEN ON THE COUNT OF NON-CONSIDERATION OF THE CASE-LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE; THER E IS NO MISTAKE APPARENT FROM RECORD IN AS MUCH AS THE TRIBUNAL HAS CON SIDERED THE SAME, THOUGH THE SAME WAS NOT DISCUSSED IN DETAIL. AC CORDINGLY, WE DO NOT FIND MERIT IN THE PRESENT APPLICATION OF THE ASSESSEE EVEN ON THIS COUNT. 6. HOWEVER, WE HAVE INADVERTENTLY NOT MENTIONED T HE DATE OF HEARING OF THE MAIN APPEAL OF 9 TH OF JUNE, 2011 EVEN THOUGH THE SAME WAS PRONOUNCED IN THE OPEN COURT AT THE CONCLUSION OF T HE HEARING ON M.A.NO.68/HYD/11 VIRTUSA (INDIA) PVT. LTD., HYD. ====================== 5 STAY APPLICATION ON 18.3.2011. IN VIEW OF THE ABOVE , WE RECTIFY OUR ORDER DATED 25.3.2011 IN THIS BEHALF, AND DIRECT THAT THE FOLLOWING SENTENCES MAY BE INCORPORATED AT THE END OF PARA-4 OF O RDER DATED 25.3.2011, ON PAGE 3 THEREOF- HOWEVER, WE ACCEDE TO THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE FOR EARLY HEARING ON ITS APPEAL AND ACCORDINGLY DIRECT THE REGISTRY TO POST THE APPEAL OF THE ASSESSEE, VIZ. ITA NO.268/HYD/2011, F OR HEARING ON 9 TH JUNE 2011. AS THE DATE OF HEARING IS ALREADY PRONOUNCED IN THE COURT, NO SEPARATE NOTICE OF HEARING IS WARRANTED. PARTIES ARE FURTHER DIRECTED TO FILE THE PAPER-BOOKS, IF ANY, BY 31 ST MAY, 2011. 7. IN VIEW OF THE ABOVE RECTIFICATION THROUGH INCORP ORATION OF THE ABOVE SENTENCES AT THE END OF PARA-4 OF OUR ORDER DATED 25 TH MARCH, 2011, WE DIRECT THE REGISTRY TO POST THE APPEAL OF TH E ASSESSEE, VIZ. ITA NO.268/HYD/2011, FOR HEARING ON 9 TH JUNE, 2011. PARTIES MAY FILE THE PAPER-BOOKS, IF ANY, ON OR BEFORE THE DATE OF HEARIN G, IF NOT ALREADY FILED IN PURSUANCE OF THE PRONOUNCEMENT BY US MADE IN THAT BE HALF AT THE CONCLUSION OF HEARING ON THE STAY APPLICATION ON 18.3. 2011. 8. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS ALLOWED IN PART AS INDICATED ABOVE. ORDER WAS PRONOUNCED IN THE COURT ON 02-06-2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DATED: 2 ND JUNE, 2011. M.A.NO.68/HYD/11 VIRTUSA (INDIA) PVT. LTD., HYD. ====================== 6 COPY FORWARDED TO: 1. VIRTUSA (INDIA) PRIVATE LIMITED, 6-3-1192, 3 RD FLOOR, MY HOME TYCOON, KUNDANBAGH, BEGUMPET, HYDERABAD. 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-3(3), HYDERAB AD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-IV, HYDERABAD 4. 5. COMMISSIONER OF INCOME TAX AP-III, HYDERABAD THE DR, ITAT, HYDERABAD. JMR*