ASST CIT 16(1), MUMBAI V. STAR INDIA P.LTD, MUMBAI

MA 99/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4753 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 13-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT SAMAIYA
• Keywords: Recovery proceedings; Application of stay; Set aside
• Section: 201

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI PAWAN SINGH ( J M) M.A. NO. 99/MUM/2019 ARISING OUT OF SA NO. 522/MUM/2018 ASSESSMENT YEAR 20 14 - 15 ) ACIT - 16(1) ROOM NO. 439 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. V S . STAR INDIA PVT. LIMITED STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL (WEST) MUMBAI - 400 013. PAN : AAACN1335Q ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI PORUS KAKA & SHRI DIVESH CHAWLA DEPARTMENT BY SHRI NISHANT SAMAIYA DATE OF HEARING 7 . 3 . 201 9 DATE OF PRONOUNCEMENT 20 . 3 . 201 9 O R D E R PER SHAMIM YAHYA (AM) : BY WAY OF THIS MISCELLANEOUS APPLICATION THE REVENUE SEEKS RECALL OF THIS STAY ORDER AND THE VACATION OF STAY GRANTED IN SA NO. 522/MUM/2018 DA TED 3.12.2018 IN ITA NO. 6649/MUM/2018. THE REVENUES SUBMISSIONS IN THIS REGARD ARE AS UNDER : - 3. THE HON B LE ITAT, 'J' BENCH, MUMBAI HAS PASSED AN ORDER DATED 03.12.2018 IN SA NO.522/ MUM/2018 ARISING OUT OF ITA NO. 6649/MUM/2018, THROUGH WHICH THE TRIB UNAL HAS DISPOSED OFF THE STAY APPLICATION. IN THE STAY APPLICATION FILED, THE ASSESSEE SOUGHT STAY OF DEMAND OF RS.352.14 CRORES RAISED IN ITS CASE FOR A.Y.2014 - 15. 3.1 THE HON'BLE ITAT HAS ALLOWED THE ASSESSEE'S APPLICATION, WITH A SPECIFIC DIRECTIO N TO THE ASSESSEE TO PAY A SUM OF RS.10 CRORES BY 31.12.2018 AND STAYED THE RECOVERY OF BALANCE AMOUNT, FOR A PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF APPEAL WHICHEVER IS EARLIER. THE TRIBUNAL, WHILE ALLOWING THE STAY, HAS MADE AN OBSERVATION THAT: - ' ............... THE ASSESSED INCOME IS SUBSTANTIALLY HIGHER THAN THE RETURNED INCOME OF THE ASSESSEE, WHICH SATISFIES THE CONDITION FOR GRANT OF ABSOLUTE STAY AS PER THE INSTRUCTION NO.96 DATED 21 AUGUST 1969 BY THE CBDT'. . STAR INDI A PVT. LIMITED 2 3.2 THE CBDT, WHILE ISSUING SUBSEQUENT INSTRUCTION NO. 1914 DATED 2 - 2 - 1993 ON RECOVERY OF OUTSTANDING TAX DEMANDS, HAS SPECIFICALLY MENTIONED THAT : 'THIS INSTRUCTION IS ISSUED IN '' SUPERSESSION OF ALL EARLIER INSTRUCTIONS ON THE SUBJECT AND REITERATES THE EXISTING CIRCULARS ON THE SUBJECT'. INSTRUCTION NO. 1914 IS A COMPREHENSIVE INSTRUCTION ON THE SUBJECT OF RECOVERY OF TAX DEMAND AND THE SAME WAS ISSUED IN ORDER TO STREA MLINE RECOVERY PROCEDURES. AS SUCH, THE INSTRUCTION NO. 96 DATED 21.08.1969, ON WHICH THE TRIBUNAL HAS HEAVILY RELIED ON, WHILE ALLOWING THE ASSESSEE'S STAY APPLICATION IS NO LONGE R EFFECTIVE. THUS, THE STAY GRANTED TO ASSESSEE ON SUCH INFRUCTUOUS CIRCU LAR NEEDS A REVISIT. 3.3 FURTHER, THE CBDT HAS SPECIFIED CERTAIN CATEGORY OF CASES IN INSTRUCTION NO. 1914, FOR GRANTING STAY ON RECOVERY, WHICH ARE SUMMARIZED HEREIN - UNDER, FOR READY REFERENCE: - (A) IF THE DEMAND IN DISPUTE RELATES TO ISSUES THAT H AVE BEEN DECIDED IN ASSESSEE'S FAVOUR BY AN APPELLATE AUTHORITY OR COURT EARLIER; OR (B) IF THE DEMAND IN DISPUTE HAS ARISEN BECAUSE THE ASSESSING OFFICER HAD ADOPTED AN INTERPRETATION OF LAW IN RESPECT OF WHICH THERE EXIST CONFLICTING DECISIONS OF ONE OR MORE HIGH COURTS (NOT OF THE HIGH COURT UNDER WHOSE JURISDICTION THE ASSESSING OFFICER IS WORKING); OR (C) IF THE HIGH COURT HAVING JURI SDICTION HAS ADOPTED A CONTRARY INTERPRETATION BUT THE DEPARTMENT HAS NOT ACCEPTED THAT JUDGMENT. FROM A PERU SAL OF THE ABOVE, IT IS EVIDENT THAT THE ASSESSEEE'S CASE DOES NOT FALL IN ANY OF THE AFORESAID CATEGORY. THEREFORE, THE ASSESSEE DOES NOT DESERVE STAY ON THE RECOVERY OF DEMAND RAISED IN ITS CASE UNDER CONSIDERATION. 3.4 FURTHERMORE, VIDE OFFICE MEMORAN DUM DATED 31.07.2017 ISSUED IN F.NO.404/72/93 - LTCC, THE CBDT HAS PARTIALLY MODIFIED ITS INSTRUCTION NO. 1914, WHEREIN STANDARD RATE FOR RECOVERY HAS BEEN REVISED TO 20% AS AGAINST 15% OF THE DISPUTED DEMAND. HOWEVER, THIS GRANT ON STAY OF DEMAND IS ONLY FO R THE DEMANDS DISPUTED IN FIRST APPEAL. IN CONTRAST TO THE SAME, THE DEMAND RAISED IN THE INSTANT CASE HAS BEEN CONFIRMED BY THE DISPUTE RESOLUTION PANEL, BEING FIRST APPELLATE AUTHORITY. ALL THE INSTRUCTIONS ISSUED BY THE CBDT FROM TI ME TO TIME ON THE SUB JECT OF RECOVERY OF TAX DEMAND' PERMITS THE GRANT OF STAY ONLY WITH REGARD TO DEMANDS DISPUTED BEFORE THE FIRST APPELLATE AUTHORITY. NO SUCH RELIEF IS PERMITTED IN ANY OF THESE INSTRUCTIONS FOR THE DEMANDS CONFIRMED BY THE FIRST APPELLATE A UTHORITY AND/OR ARE DISPUTED BEFORE THE SUBSEQUENT APPELLATE AUTHORITIES, VIZ., TRIBUNAL. STAR INDI A PVT. LIMITED 3 4. IN VIEW OF THE ABOVE, IT IS MOST HUMBLY PRAYED THAT THE HON'BLE TRIBUNAL MAY BE PLEASED TO RECALL THE IMPUGNED STAY ORDER AND VACATE THE STAY GRANTE D ACCORDINGLY. 3. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. LEARNED DR SHRI NISHANT SAMAIYA REITERATED THE SUBMISSIONS AS ABOVE. 4. PER CONTRA, SENIOR COUNSEL SHRI PORUS KAKA SUBMITTED THAT FIRSTLY THE TRIBUNAL HAD NO POWER TO REVIEW ITS EARLIER ORDER. LEARNED COUNSEL FURTHER SUBMITTED THAT THE SUBMISSION OF THE REVENUE IS WRONG THAT CIRCULAR NO. 96 DATED 21.8.1969 IS IN FRUCTUOUS IN VIEW OF CBDT INSTRUCTION NO. 1914 DATED 2.12.1993. 5. IN THIS REGARD HE REFERRED TO THE PREAMBLE OF THE CIRCULAR DATED 2.12.1993 THAT THIS INSTRUCTION IS ACCORDINGLY BEING ISSUED IN SUPERSESSION OF EARLIER INSTRUCTIONS ON THE SUBJECT AND REITERATES THE EXISTING CIRCULAR ON THE SUBJECT. LEARNED COUNSEL FURTHER REFERRED TO HON'BLE MADRAS HIGH COURT DECISION I N THE CASE OF N. JAGANTHAN VS. DCIT (64 TAXMANN.COM 339), WHEREIN IT HAD BEEN EXPOUNDED THAT CBDT INSTRUCTION NO. 95 DATED 21.8.1969 HAS NOT BEEN SUPERSEDED BY CBDT INSTRUCTION NO. 1914 DATED 2.12.1993. THAT IT EVEN NOW HOLDS FOLD. FURTHERMORE, LEARNED CO UNSEL OF THE ASSESSEE SUBMITTED THAT HON'BLE BOMBAY HIGH COURT IN THE CASE OF KEC INTERNATIONAL VS. B.R. BALAKRISHNAN (119 TAXMAN 974) HAD EXPOUNDED FOLLOWING PARAMETERS FOR THE GRANT OF STAY. (HEAD NOTES ONLY) SECTION 226, READ WITH SECTION 156, OF THE INCOME - TAX ACT, 196 1 - COLLECTION AND RECOVERY OF TAX - OTHER MODES OF RECOVERY - ASSESSMENT YEAR 1988 - 89 - IN RESPECT OF NOTICE OF DEMAND, ASSESSEE FILED A STAY APPLICATION SO AS TO ENABLE HIM TO FILE AN APPEAL - REVENUE REJECTED STAY APPLICATION WITHOUT GIVING REASONS - AS SESSING OFFICER THEREUPON ISSUED A GARNISHEE NOTICE TO BANK UNDER SECTION 226(3) - WHETHER WHILE PASSING ORDERS ON STAY APPLICATIONS, AUTHORITIES SHOULD COMPLY WITH CERTAIN PARAMETERS VIZ. (1) AUTHORITY HAS TO AT LEAST SET OUT ASSESSEE'S CASE BRIEFLY; (2) AUTHORITY SHOULD CONSIDER WHETHER ASSESSEE HAS MADE OUT A CASE FOR UNCONDITIONAL STAY; IF NOT, WHETHER A PART OF AMOUNT SHOULD BE ORDERED TO BE DEPOSITED, FOR WHICH REASONS SHOULD BE GIVEN; (3) AUTHORITY SHOULD INDICATE WHETHER ASSESSEE IS FINANCIALLY SOUN D AND VIABLE TO DEPOSIT AMOUNT; AND (4) GENERALLY, COERCIVE MEASURES MAY NOT BE STAR INDI A PVT. LIMITED 4 ADOPTED DURING PERIOD PROVIDED BY STATUTE TO GO IN APPEAL UNLESS ASSESSEE WAS LIKELY TO DEFEAT DEMAND - HELD, YES - WHETHER IMPUGNED ORDER HAD TO BE SET ASIDE WITH DIRECTION TO ASSESSING OFFICER TO DISPOSE OF STAY APPLICATION - HELD, YES 6. HE PLEADED THAT THE AFORESAID ORDER OF THE ITAT DULY FOLLOWED THE MANDATE OF AFORESAID HON'BLE HON'BLE JURISDICTIONAL HIGH COURT DECISION. HE SUBMITTED THAT IN THE ORIGINAL ORDER OF THE STAY THE TRIBUNAL HAD FOUND A PRIMA FACIE CASE AND ALSO FOUND THAT THE BALANCE OF CONVENIENCE WAS IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, SUBJECT TO PAYMENT OF CERTAIN AMOUNT THE ITAT HAD GRANTED STAY. HENCE, LEARNED COUNSEL PLEADED THAT THERE IS NO REASON WHY THE STAY ORDER SHOULD BE VACATED. 7. UPON CAREFUL CONSIDERATION, WE NOTE THAT IN THE EARLIER STAY ORDER THE ITAT HAD APART FROM REFERRING TO THE IMPUGNED CBDT CIRCULAR HAS ALSO OBSERVED THAT IT HAD DULY CONSIDERED THE ASSESSEES CONTENTION OF PRIMA FACI E CASE AS WELL AS BALANCE OF CONVENIENCE. THERE UPON IT HAD DIRECTED TO PAY A SUM OF RS. 10 CRORES. THEREAFTER THE STAY WAS GRANTED. WE FIND THAT THE STAY ORDER IS DULY IN CONSONANCE WITH THE AFORESAID ORDER OF HON'BLE BOMBAY HIGH COURT. HENCE, IN VIEW OF THE AFORESAID DISCUSSION AND PRECEDENT, WE DO NOT FIND ANY MISTAKE MUCH LESS AN APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL WARRANTING US TO VACATE THE STAY. 8. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE REVENUE STANDS DISMISSED. ORDE R HAS BE EN PRONOUNCED IN THE COURT ON 20 . 3 . 201 9 . SD/ - SD/ - (PAWAN SINGH ) (SH A MIM YAHYA ) J U DICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 20 / 3 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT STAR INDI A PVT. LIMITED 5 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECRETARY ) PS ITAT, MUMBAI