M/s Subex Limited , Bangalore V. Deputy Commissioner of income Tax, Circle-6(1)(2), Bangalore

SA 201/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6050 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S T SESHADRI
• Assessee Lawyers: SAPTARISHI BASU
• Keywords: Rectification of order; Extension of stay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI N. V. VASUDEVAN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER S.P. NO. & ITA NO. PETITIONER RESPONDENT 201/BANG/2018 (IN IT (TP) A NO. 190/BANG/2018) (A.Y. 2013 - 14) M/S. SUBEX LTD., RMZ ECOWORLD, DEVARABISNAHALLI, OUTER RING ROAD, BANGALORE 560103 PAN : A A B C S9255R THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6 (1) (2), BANGALORE. ASSESSEE BY : SHRI SAPTARISHI BASU, C. A. REVENUE BY : SHRI S. T. SESHADRI, JCIT ( DR ) DATE OF HEARING : 24.08.2018. DATE OF PRONOUNCEMENT : 24.08.2018. O R DE R PER SHRI A. K. GARODIA, A.M. : THE ASSESSEE HAS FILED THISSTAY PETITIONSEEKINGEXTE NSION OF STAY FIRST GRANTED BY THE TRIBUNAL ON 09.02.2018 IN S. P. NO. 32/BANG/201 8 FOR 6 MONTHSON COLLECTION OF DISPUTED OUTSTANDING DEMAND OF RS.33,82,76,230/- FOR THE ASSESSMENT YEAR 201314 SUBJECT TO ADJUSTMENT OF REFUNDS RS. 5.89 C RORES AND PAYMENT OF RS. 5.2 CRORES IN TWO INSTALLMENTS TO BE PAID ON 10 .03.2018 & 20.03.2018. 2. AS PER THE PRESENT STAY PETITION, THE ASSESSEE H AS PAID RS. 2.6 CRORES ON 10.03.2018 AND RS. 0.90 CRORES ON 20.03.2018 IN ADD ITION TO ADJUSTMENT OF REFUND OF RS. 176,16,350/- AGAINST REFUND OF A. Y. 2006 07. HENCE, IT IS SEEN THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS OF STAY ORDER DATED 09.02.2018. FOR READY REFERENCE, WE REPRODUCE PARA 4 OF THE SAID EARLIER STAY PETITION ORDER IN S. P. NO. 32/BANG/2018 DATED 09.0 2.2018. IT READS AS UNDER:- 04. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE RECORD. IN OUR VIEW THE ASSESSEE WAS REQUIRED TO DEMONSTRATE T HE PRIMA FACIE CASE AND BALANCE OF CONVENIENCE AND FINANCIAL HARDS HIP FOR THE PURPOSES OF MAKING OUT A CASE FOR GRANT OF INTERIM STAY. IN THE PRESENT CASE THE ASSESSEE HAS FAIRLY SUBMITTED THAT THE TAX REFUND OF RS.5.87 CRORES IS DUE TO THE ASSESSEE EXCLUDING THE TAX REF UND FOR AY 2014-15 WHICH MAY BE ADJUSTED AGAINST THE TAX DEMAND FOR TH IS YEAR. WE ARE OF THE OPINION THAT A VIEW TO BALANCE THE EQUITIES OF BOTH THE PARTIES, IT IS 2 S.P. NO.201/BANG/2018 (IN IT(TP)A NO. 190/BANG/2018) NECESSARY TO PUT CONDITION FOR GRANT OF STAY ACCORD INGLY IN ADDITION TO THE ADJUSTMENT OF REFUNDS OF RS.5.89 CRORES BY THE DEPARTMENT, WE DIRECT THE ASSESSEE TO DEPOSIT A FURTHER SUM OF RS. 5.20 CRORES IN TWO EQUAL INSTALMENTS OF RS.2.60 CRORES PAYABLE ON OR B EFORE 10.03.2018 AND 20.03.2018 RESPECTIVELY AGAINST THE TOTAL DEMAN D. IF THE ASSESSEE PAYS THE ABOVE SAID AMOUNT OF RS.5.20 CRORES WITHIN THE TIME FRAME STATED HEREIN ABOVE THEN THE BALANCE TAX AMOUNT SHA LL NOT BE ENFORCED BY THE REVENUE BY TAKING ANY STEPS WHATSOEVER. THIS STAY SHALL BE IN OPERATION FOR A PERIOD OF 180 DAYS OR TILL THE DISP OSAL OF THE APPEAL WHICHEVER IS EARLIER. THE REGISTRY HAD ALREADY FIXED THE MATTER FOR HEARI NG ON 16.05.2018, BUT AS THE STAY IS GRANTED TO THE ASSESSEE, THEREFO RE THE WE DIRECT THE REGISTRY TO FIX THE DATE OF HEARING TO 19.03.2018. WE WOULD LIKE TO ADD AS A CONDITION OF STAY THAT TH E ASSESSEE SHALL FILE PAPER BOOKS / DOCUMENTS BEFORE NDOH AFTER SUPPLYING THE SAME TO THE REVENUE AND IT IS FURTHER DIRECTED THAT THE ASS ESSEE SHALL NOT TAKE ANY UNDUE ADJOURNMENT IN THE MATTER. IN CASE ANY OF THE TERMS AND CONDITIONS IS VIOLATED THEN THE STAY GRANTED BY THE TRIBUNAL SHALL BE DEEMED TO HAVE BEEN VACATED. NO SEPARATE NOTICE OF HEARING SHALL BE GIVEN TO THE PARTIES AS THE DATE OF 19.03.2018 WAS ANNOUNCED IN THE OPEN COURT IN PRESENCE OF PARTIES. NEEDLESS TO SAY NOTHING STATED HEREINABOVE SHALL BE CONSIDERED AS AN EXPRESSION ON MERITS OF THE CASE AND IS ONLY PRIMA FACIE OBSERVATIONS OF THE BE NCH. 3. THIS STAY PETITION WAS EARLIER HEARD ON 03.08.20 18 BUT AT THE TIME OF DICTATION OF THE ORDER, IT WAS FOUND THAT THE CONDITIONS OF THE EARLIER STAY PETITION ORDER WERE NOT FULFILLED BY THE ASSESSEE BECAUSE AS AGAINST TH E CONDITION OF PAYMENT OF RS. 5.2 CRORES BY THE ASSESSEE IN ADDITION TO ADJUSTMEN T OF REFUNDS OF RS. 5.89 CRORES, THE ASSESSEE HAS MADE PAYMENT OF ONLY RS. 3 .5 CRORES. HENCE, THE STAY PETITION WAS REFIXED FOR CLARIFICATION. IN REP LY TO THIS QUERY OF THE BENCH ABOUT COMPLIANCE OF THE DIRECTION OF THE BENCH AS P ER THE EARLIER TRIBUNAL ORDER IN S. P. NO. 32/BANG/2018 DATED 09.02.2018, THE ASS ESSEE HAS FILED A LETTER DATED 10.08.2018 ON 13.08.2018. IN THIS LETTER, IT IS EXPLAINED THAT VIDE THE RECTIFICATION ORDER DATED 22.02.2018 FOR A. Y. 2006 07, THE AO DETERMINED A REFUND OF RS. 176,16,350/- AND IN THAT ORDER, THE A O MENTIONED THAT THE SAID REFUND WOULD BE ADJUSTED AGAINST DEMAND PAYABLE FOR AY 2013 14. IT IS FURTHER STATED IN THIS LETTER THAT BASED ON THE DIS CUSSION WITH THE AO, THE ADJUSTMENT OF THE SAID REFUND WAS TOWARDS PART PAYM ENT OF THE SECOND INSTALLMENT OF DEMAND OF RS. 260 LACS AND ACCORDING LY, THE ASSESSEE MADE PAYMENT OF RS. 90 LACS ON 20.03.2018. IN COURSE OF HEARING ON 24.08.2018, 3 S.P. NO.201/BANG/2018 (IN IT(TP)A NO. 190/BANG/2018) LEARNED AR OF THE ASSESSEE REITERATED THE SAME CONT ENTIONS AND SUBMITTED THAT IN THIS MANNER, THE ASSESSEE HAS COMPLIED WITH THE DIRECTIONS OF THE BENCH AS PER THE EARLIER STAY ORDER IN S. P. NO. 32/BANG/201 8 DATED 09.02.2018. AT THIS JUNCTURE, LEARNED DR OF THE REVENUE SUBMITTED THAT THE AO HAS NOT AGREED WITH THIS CLAIM OF THE ASSESSEE THAT THE SAID ADJUSTMENT OF REFUND OF RS. 176,16,350/- FOR A. Y. 2006 07 AGAINST THE DEMAND FOR THE PRESENT YEAR WAS TOWARDS PART PAYMENT OF THE SECOND INSTALLMENT OF D EMAND OF RS. 260 LACS. THE BENCH OBSERVED THAT EVEN IF THE AO AGREED TO THIS, NEITHER THE AO NOR THE ASSESSEE CAN CHANGE THE SPECIFIC DIRECTION OF THE B ENCH IN THE EARLIER TRIBUNAL ORDER IN S. P. NO. 32/BANG/2018 DATED 09.02.2018. T HE BENCH OBSERVED THAT IF THE ASSESSEE WANTED SUCH CHANGE, THE ASSESSEE SHOUL D HAVE APPROACHED THE BENCH. THE BENCH ALSO OBSERVED THAT THESE FACTS SHO ULD HAVE BEEN POINTED OUT BY THE LEARNED AR OF THE ASSESSEE. BUT THIS WAS NOT DONE AND THE BENCH FOUND THESE FACTS AT THE TIME OF DICTATION. IN REPLY, LEA RNED AR OF THE ASSESSEE SUBMITTED THAT THERE IS A MISTAKE OF THE ASSESSEE B UT LENIENT VIEW SHOULD BE TAKEN BECAUSE THIS WAS NOT INTENTIONAL. LEARNED DR OF THE REVENUE SUBMITTED THAT AS PER THE EARLIER TRIBUNAL ORDER IN S. P. NO. 32/BANG/2018 DATED 09.02.2018, DIRECTION WAS FOR PAYMENT OF TOTAL RS. 11.09 CRORES COMPRISING OF REFUND ADJUSTMENT OF RS. 5.89 CRORES AND PAYMENT BY THE ASSESSEE OF RS. 5.20 CRORES BUT TILL DATE, TOTAL PAYMENT BY WAY OF REFUN D ADJUSTMENT AND PAYMENT BY THE ASSESSEE IS ONLY RS. 7.24 CRORES AND THEREFORE, THE ASSESSEE SHOULD BE DIRECTED TO PAY FURTHER RS. 3.85 CRORES. LEARNED AR OF THE ASSESSEE SUBMITTED THAT LENIENT VIEW SHOULD BE TAKEN. 4. WE HAVE CONSIDERED THE ENTIRE FACTS AS DISCUSSED ABOVE AND CONSIDERED THE RIVAL SUBMISSIONS. IN OUR CONSIDERED OPINION, THE A SSESSEE HAS NOT ONLY FAILED TO COMPLY WITH THE DIRECTIONS OF THE BENCH AS PER E ARLIER STAY ORDER IN S. P. NO. 32/BANG/2018 DATED 09.02.2018 BUT HAS ALSO FAILED T O BRING THESE FACTS TO THE NOTICE OF THE TRIBUNAL WHEN THIS STAY PETITION FILE D BY THE ASSESSEE FOR EXTENSION OF STAY WAS EARLIER HEARD ON 03.08.2018. THEREFORE, WE FEEL THAT UNDER THIS FACTUAL POSITION, THE ASSESSEE DOES NOT DESERVE ANY LENIENCY. IN THE INTEREST OF JUSTICE, WE GRANT EXTENSION OF STAY FOR A PERIOD OF 3 MONTHS FROM THE DATE OF THIS ORDER OR TILL DISPOSAL OF THIS APPEAL WHICHEVER IS EARLIER SUBJECT TO FURTHER 4 S.P. NO.201/BANG/2018 (IN IT(TP)A NO. 190/BANG/2018) PAYMENT OF RS. 2 CRORES BY THE ASSESSEE ON OR BEFOR E 31.08.2018. THE HEARING OF THE APPEAL IS AT PRESENT FIXED ON 01.11.2018 BUT SINCE, WE ARE GRANTING EXTENSION OF STAY, THE HEARING IS PREPONED TO 05.09 .2018. WE WANT TO MAKE IT CLEAR THAT IF THE ASSESSEE SEEKS ADJOURNMENT WITHOU T JUSTIFIABLE REASONS, THE STAY EXTENDED BY THIS ORDER SHALL STAND VACATED AUT OMATICALLY. REGISTRY IS DIRECTED TO ISSUE NOTICES TO BOTH SIDES. 5. IN VIEW OF ABOVE DISCUSSION, THE STAY PETITION F ILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF H EARING ON CONCLUSION OF THE HEARING. SD/- SD /- (N.V. VASUDEVAN) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 24.08.2018. MS* COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.