DCIT, Central Circle-3, CBE V. M/S EVEREADY SPINNING MILLS P LTD., TIRUPUR

MA 95/CHNY/2023

AI Insights

The case involves the Deputy Commissioner of Income Tax, Central Circle 3, Coimbatore, as the petitioner, and M/s. Eveready Spinning Mills Pvt. Ltd., as the respondent. The revenue filed a miscellaneous petition under section 254(2A) of the Income-tax Act, 1961, challenging the Tribunal's earlier decision to extend the stay on recovery of a tax demand. The original stay was granted due to a dispute over a tax demand of Rs. 6,68,14,227 for the assessment year 2017-18, which the assessee contested. The Tribunal had previously extended the stay multiple times, and the revenue's application argued that the cumulative stay period exceeded the statutory limit of 365 days. The assessee countered that the delay was not due to their actions, and thus the extension was justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134882 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 07-05-2023
• Other Referred Cases: Deputy Commissioner of Income-tax v. Pepsi Foods Ltd, Principal Commissioner of Income-tax v. Jindal Steel & Power Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Application of stay; Extension of stay
• Section: 143(3); 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application No. 95/Chny/2023 [In SA No. 15/Chny/2023 in IT(TP)A No. 2/Chny/2022] (िनधाᭅरणवषᭅ / Assessment Year: 2017-18) Deputy Commissioner of Income Tax, Central Circle 3, Coimbatore. v. M/s. Eveready Spinning Mills Pvt. Ltd., 12, Jyothi Theatre Road, Tirupur – 641 601. [PAN: AAACF-9159-Q] (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. AR V Sreenivasan, Addl. CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. S. Sridhar, Advocate सुनवाई कᳱ तारीख/Date of Hearing : 09.06.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 09.06.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The revenue has filed miscellaneous petition u/s. 254(2A) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) against order passed by the Tribunal in Stay Application no. 15/Chny/2023 in IT(TP)A No. 2/Chny/2022, dated 24.03.2023 and pertains to assessment year 2017-18. :-2-: MA. No: 95/Chny/2023 2. The revenue has narrated facts of this case and mistakes stated to be apparent on record from the order of the Tribunal dated 24.03.2023 and relevant contents of Miscellaneous Application filed by the revenue are reproduced as under: This office received order in SA No.15/Chny /2023 in IT(TP)A No.2/Chny/2022 dated 24-03-2023 disposing the stay application filed by the assessee company against demand raised by the National Faceless Assessment Centre in the assessment order u/s 143(3) of the Act on 16.02.2022, amounting to Rs.8,35,17,784/-, after payment of Rs.1,67,03,557/- on 07.03.2022.Hence, the net collectible demand remains Rs.6,68,14,227/-. The Hon'ble ITAT vide the above order has granted extension of stay of recovery of outstanding demand for a period of three months from the next day of extension already granted or till the final disposal of the quantum appeal. The first stay application was filed by the assessee company on 14.03.2022. The Hon'ble ITAT granted stay for six months in SP 33/Chny/2022 vide order dated 12.04.2022 subject to the payment of Rs.1,33,62,845/-. As the stay expires on 30/10/2022, the assessee company filed second stay petition and the stay was extended for one month vide order dated 15.11.2022 in SP No. 75/Chny/2022. The appellant company filed third stay petition and the stay was further, extended for two months vide order dated 03.02.2023 in SP No.S/Chny/2023. The appellant company filed fourth stay petition and the stay was further extended for three months vide order dated 24.03.2023 in SP No.15/Chny/2023. Hence, it is seen that cumulative period of stay is more than 365 days, which is beyond the maximum period given in statute as per the second proviso to Sec.254(2A) of the Income tax Act,1961, which reads as follows: "Provided further that no extension of stay shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay, unless the assessee makes an application and :-3-: MA. No: 95/Chny/2023 has complied with the condition referred to in the first proviso and the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the assessee, so however, that the aggregate of the period of stay originally allowed and the period of stay so extended shall not 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" Since the total period of stay already exceeded 365 days, it is requested that the stay granted vide order in SP No.15/Chny/2023 dated 24/03/2023 may please be vacated.” 3. The Ld. Counsel for the assessee, Shri. S. Sridhar, filed a detailed written submissions in support of his arguments against miscellaneous application and relevant contents of the submissions of the Ld. Counsel for the assessee are reproduced as under: The Miscellaneous Application filed at the instance of Department against the Stay Application order dated 24.03.2023 in SA No. 15/CHNY/2023 is posted for posted for clubbing with the main appeal /hearing on 08.06.2023 with a prayer to vacate the stay granted by this Hon'ble Income Tax Appellate Tribunal in the above mentioned Stay-Application order by placing reliance upon the second proviso to Section 254(2A) of the Act, which proviso according to the Department contemplates that the Appellate Tribunal has no power to extent the stay granted by them beyond 365 days. It is submitted that the prayer in the Miscellaneous Application filed by the· Department is untenable and is not maintainable in terms of Section 254(2) of the Act. The Order in the Stay Application No. 15/CHNY/2023 does not suffer from any mistake apparent on record rectifiable in terms of Section 254(2) of the Act, nor a 'Petition for Vacation of Stay' can be filed in terms of Section 254(2) of the Act by the Revenue warranting interference by this Hon'ble Income Tax Appellate Tribunal. The prayer of the Department in this regard is wholly unjustified and without any basis. :-4-: MA. No: 95/Chny/2023 The Bench after considering the TRINITY PRINCIPLES had granted stay of disputed demand and hence the presumption of applicability of rectification petition, which according to the Assessee / Respondent is not legally tenable inasmuch as the scope of Section 254(2) of the Act being narrow, the review sought for by the revenue is uncalled for. The Assessee / Respondent had filed one Stay Petition and 3 Stay Extension Applications and the details of the said petitions is enclosed below: 1. The Stay Petition was filed on 14.03.2022 in SA No. 33/CHNY/2022 The Appellate Tribunal vide their order dated 12.04.2022 had granted stay for six months on condition of payment of Rs. 1,33,62,845/- (Which condition was fulfilled by them). The said stay granted by Tribunal expired on 30.10.2022 2. The 1 st Stay extension application was filed in SA No. 75/CHNY /2022 The Appellate Tribunal vide their order dated 15.11.2022 had extended the stay granted by them earlier by 1 month 3. The 2 nd Stay extension application was filed in SA No. 5/CHNY /2023 The Appellate Tribunal vide their order dated 03.02.2023 had extended the stay granted by them earlier by 2 months 4. The 3rd Stay extension application (The disputed / impugned order) was filed in SA No. 15/CHNY/2023 The Appellate Tribunal vide their order dated 24.03.2023 had extended the stay granted by them earlier by 3 months. The said stay granted by the Appellate Tribunal expires on 08.07.2023. In this regard, the assessee / respondent is placing on record the details / case history of the appeal of the assessee / respondent in IT(TP)A No. 2 /CHNY/2022 for the captioned assessment year from the date of institution till date with a view to demonstrate the nature / result of each and every hearing of the main appeal by the Bench. :-5-: MA. No: 95/Chny/2023 Sl. No Date Status of Hearing 1 04.03.2022 Appeal in IT(TP) A No. 2/Chny/2023 filed 2 17.03.2022 SA No. 33/Chny/2022 filed 3 28.03.2022 Posted the Stay Petition in SA No. 33/Chny/2022 for hearing along with the main appeal 4 30.03.2022 Hearing adjourned by the Bench 5 31.03.2022 Adjournment at the instance of the Department 6 12.04.2022 SA No. 33/Chny/2022 was heard (Stay granted for 6 months in the order dated 14.04.2022) & the main appeal was posted for hearing on 27.06.2022 7 27.06.2022 Adjournment of the main appeal hearing at the instance of the Department 8 05.07.2022 Adjournment of the main appeal hearing at the instance of the assessee for 2 days 9 07.07.2022 Adjournment at the instance of the Department 10 18.07.2022 Appeal Heard for the 1 st time 11 20.10.2022 Notice issued posting the hearing on 04.11.2022 for certain clarifications 12 04.11.2022 Hearing adjourned to 10.11.2022 as PART HEARD 13 10.11.2022 Hearing adjourned to 15.11.2022 as PART HEARD 14 15.11.2022 Appeal heard for the 2 nd time along with the SA No. 75/CHny/2022 15 21.02.2023 Main appeal released for fresh hearing and listed for hearing in regular course 16 23.03.2023 Posted the main appeal hearing on 19.04.2023 17 19.04.2023 Adjournment at the instance of the Department 18 24.05.2023 Bench did not function 19 05.06.2023 Adjournment at the instance of Department 20 19.06.2023 Next date of hearing. Hence, it can be seen that the assessee / respondent had co- operated with the Bench and with the· Department in assisting the Income Tax Appellate Tribunal in speedy disposal of the appeal preferred by the Assessee / Respondent in the IT(TP)A No. 2/CHNY /2022. Hence under no stretch of imagination it can be said that the delay in disposal of the captioned main :-6-: MA. No: 95/Chny/2023 appeal attributable to the_ assessee / respondent herein, warranting automatic vacation of stay granted by this Income Tax Appellate Tribunal. It is pertinent to note that the Department in the last two occasions had sought for adjournment on 19.04.2023 & 05.06.2023 and the screenshot taken by the IT AT In this regard it is submitted that reliance is placed upon the decision of the Supreme Court in the case of Deputy Commissioner of Income-tax v. Pepsi Foods Ltd, reported in [2021] 126 taxmann.com 69 (SC). The relevant portion of the said decision is extracted herein below: 25. The law laid down by the impugned judgment of the Delhi High Court in Pepsi Foods Ltd. (supra) is correct. Resultantly, the judgments of the various High Courts which follow the aforesaid declaration of law are also correct. Consequently, the third proviso to Section. 254(2A) of the Income-tax Act will now be read without the word "even" and the words "is not" after the words "delay in disposing of the appeal". Any order of stay shall stand vacated after the expiry of the period or periods mentioned in the Section only if the delay in disposing of the 'appeal is attributable to the assessee. The appeals 'of the revenue are, therefore, dismissed. The above mentioned decision of the Supreme Court was referred to by them in another case of Principal Commissioner of Income-tax v. Jindal Steel & Power Ltd reported in [2021] 133 taxmann.com 214 (SC), wherein the Supreme Court had dismissed the SLP filed by the Department by· placing reliance upon the decision rendered by them in earlier occasion. The Madras.High Court in the case reported in [2022] 139 taxmann.com 29 (Madras) has answered the substantiate questions of law in favour of the taxpayer: "Whether the Tribunal is correct in law in allowing stay beyond a period of 65 days in. contravention to the provision of IT Act stipulated in sec.254(2A) read with the provision thereto?" In the process of answering the above substantiate questions of law, the Madras High Court followed the Dy. CIT v. Pepsi Foods Ltd. [2021] 126 taxmann.com 69/282 Taxman 10/433 ITR 295 (SC) and the extension of stay beyond 365 days cannot be considered as contravention of provisions in Section 254(2A) read with the proviso. :-7-: MA. No: 95/Chny/2023 The delay in the disposal of the main appeal is apparently not attributable to the assessee / respondent and the Appellate Tribunal in the last Stay Petition order dated 24.03.2023, while extending the stay of recovery for a further period of 3 months had held as follows: 4. We have heard both the sides, perused the materials available on record and considered the contents of stay application filed by the assessee. We find that the delay in adjudication of the appeal was not attributable to the petitioner. In view of the above, we hereby grant extension of stay of recovery of outstanding demand for a period of three months from the next day of extension already granted or till the final disposal of the quantum appeal. The conditions imposed in earlier stay orders shall remain intact. Therefore, there is no error of law committed, by this Hon'ble Bench by extending the stay order beyond 365 days and the stand of the revenue is completely misconceived as well opposed to the law laid down by the Supreme Court and followed by the; Jurisdictional High Court. In such circumstances, the plea for the vacating the stay order on the erroneous of assumption of law pertaining to the scope and power of this Hon'ble Bench in granting stay beyond the period of 365 days, within the scope of Section 254(2A) of the Act is liable to be rejected. The Vacate Stay Petition is accordingly not maintainable and completely misdirected / misconceived and hence it is pleaded for rejection of their prayer incorporated in the Vacate Stay Petition dated NIL in the interest of justice.” 4. We have heard both the parties and considered relevant contents of the miscellaneous application filed by the revenue and counter arguments filed by the Ld. Counsel for the assessee and we find that there is no merit in miscellaneous application filed by the revenue on the issue of powers of the Tribunal in extending stay beyond 365 days, in light of provisions of section 254(2A) of the Act, because the issue is :-8-: MA. No: 95/Chny/2023 now well settled by the decision of the Hon’ble Supreme Court in the case of DCIT vs Pepsi Foods Ltd [2021] 126 taxmann.com 69 (SC) and also the decision of Hon’ble High Court of Madras reported in [2022] 139 taxmann.com 29 (Madras), where it has been held that, if delay in disposing of appeal filed by the assessee is not attributable to the petitioner, then the Tribunal itself have a power to extend stay beyond 365 days. Therefore, we are of the considered view that there is no merit in miscellaneous application filed by the revenue and thus, the Miscellaneous Application filed by the revenue is dismissed. 5. In the result, Miscellaneous Application filed by the revenue is dismissed. Order pronounced in the Open Court on 09 th June, 2023 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /Vice President Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated, 09 th June, 2023 JPV आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT 4.. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF