M/s. Bida Nirmithi Kendra, Bidar V. Income Tax Officer, Ward-1, Bidar

SA 242/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6121 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER S.P. NOS. 242 TO 245/BANG/2018 (IN ITA NOS. 1861 TO 1864/BANG/2018 ) ASSESSMENT YEAR S : 20 11 - 12 TO 2013 - 14 & 2015 - 16 M/S. BIDAR NIRMITHI KENDRA, BASAVESHWARA CIRCLE, NAUBAD, BIDAR. PAN: AABAN0989K VS. THE INCOME TAX OFFICER, WARD 1, BIDAR. APPELLANT RESPONDENT ASSESSEE BY : SHRI T. SRINIVASA, CA REVENUE BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (SR. DR) DATE OF HEARING : 02 . 1 1 .201 8 DATE OF PRONOUNCEMENT : 02 . 1 1 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; ALL THESE FOUR STAY PETITIONS ARE FILED BY THE ASSE SSEE SEEKING STAY OF DISPUTED OUTSTANDING DEMAND OF RS. 34,51,73,238/- IN RESPECT OF ASSESSMENT YEARS 2011-12, 2012-13, 2013-14 AND 2015-16. 2. IN THE COURSE OF HEARING OF THESE STAY PETITIONS, I T WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AGAINST THESE DISPUTED DEMANDS OF RS. 34,51,73,238/-, THE AO HAS ALREADY RECOVERED U/S. 266(3) AN AMOUNT OF RS. 22,7 2,75,655/- WHICH IS ABOUT 66% OF THIS DISPUTED OUTSTANDING DEMAND OF THESE FOUR Y EARS. HE FURTHER SUBMITTED THAT AGAINST SUCH RECOVERY BY THE AO, THE ASSESSEE FILED A WRIT PETITION NOS. 201260/2018, 201288/2018 & 201300/2018 AND AS PER T HE JUDGMENT DATED 07.08.2018, A SINGLE JUDGE BENCH OF HONBLE KARNATA KA HIGH COURT HAS DIRECTED THE REVENUE TO REFUND AN AMOUNT OF RS. 15,82,41,007/- B Y HOLDING THAT THIS MUCH AMOUNT IS RECOVERED BY THE AO IN EXCESS OF HIS RIGH T IN THE FACTS OF THE PRESENT CASE AND IN THE LIGHT OF VARIOUS JUDGEMENTS NOTED BY HON 'BLE KARNATAKA HIGH COURT IN THIS JUDGEMENT. HE FURTHER SUBMITTED THAT AGAINST THIS JUDGEMENT OF THE SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT, THE REVENUE FILED WRIT APPLICATION BEFORE DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT IN W A NO. 200650/2018 WHICH IS PENDING BEFORE HONBLE HIGH COURT, GULBARGA BENCH. HE FURTHER SUBMITTED THAT IN RESPECT OF THIS DECISION OF SINGLE JUDGE BENCH OF H ON'BLE KARNATAKA HIGH COURT, REVENUE HAS NOT YET REFUNDED THIS AMOUNT OF RS. 15, 82,41,007/- WHICH WAS DIRECTED S.P. NOS. 242 TO 245/BANG/2018 (IN ITA NOS. 1861 TO 1864/BANG/2018) PAGE 2 OF 4 BY HON'BLE KARNATAKA HIGH COURT TO BE REFUNDED BY T HE AO TO THE ASSESSEE. AT THIS JUNCTURE, THE BENCH OBSERVED THAT IN THAT SITUATION , THE ASSESSEE SHOULD HAVE FILED CONTEMPT PETITION BEFORE HON'BLE KARNATAKA HIGH COU RT. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE DIVISION BENCH OF HO N'BLE KARNATAKA HIGH COURT HAS DIRECTED THE ASSESSEE NOT TO INITIATE CONTEMPT PROC EEDINGS AND IT WAS STATED BY THE DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT THAT THEY WILL DISPOSE OF THE WRIT APPLICATION FILED BY THE REVENUE AT AN EARLY DATE. THE BENCH HAD ANOTHER QUERY AS TO WHETHER THE DIVISION BENCH OF HON'BLE KARNATAKA HIG H COURT HAS STAYED THE OPERATION OF THIS DECISION OF SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT DATED 07.08.2018 AND IN REPLY, IT WAS STATED BY LD. AR OF ASSESSEE THAT NO SUCH STAY WAS GRANTED BY THE DIVISION BENCH OF HON'BLE KARNAT AKA HIGH COURT. 3. AFTER NOTING THESE FACTUAL SITUATIONS, THIS WAS THE QUERY OF THE BENCH AS TO WHAT IS THE EXACT REQUEST OF THE ASSESSEE IN THE PRESENT ST AY PETITIONS. THE BENCH WANTED TO KNOW AS TO WHETHER THE ASSESSEE IS SEEKING STAY OF ONLY THE BALANCE DISPUTED OUTSTANDING DEMAND REMAINING AFTER THIS RECOVERY BY THE AO OF RS. 15,82,41,007/-. IN REPLY IT WAS SUBMITTED BY LD. AR OF ASSESSEE THA T THE ASSESSEE IS REQUESTING FOR STAY OF THE GROSS DEMAND BEFORE RECOVERY OF THIS AM OUNT BY THE AO AND THE ASSESSEE IS ALSO REQUESTING FOR DIRECTING THE AO TO REFUND T HIS AMOUNT OF RS. 15,82,41,007/- TO ASSESSEE AT AN EARLY DATE. THE LD. DR OF REVENU E SUBMITTED THAT THE ISSUE REGARDING REFUND OF THE AMOUNT ALREADY COLLECTED BY THE AO IS SUB JUDICE BEFORE HON'BLE KARNATAKA HIGH COURT AND THEREFORE, THE TRI BUNAL CANNOT INTERFERE IN THIS MATTER OF REFUND OF THIS AMOUNT. REGARDING GRANTIN G OF STAY, HE SUBMITTED THAT THE ASSESSEE SHOULD BE DIRECTED TO MAKE SOME FURTHER PA YMENT AND STAY MAY BE GRANTED FOR THE NET DEMAND AFTER REDUCING THE AMOUNT ALREAD Y COLLECTED BY THE AO AND THE AMOUNT TO BE PAID BY THE ASSESSEE AS PER THE DIRECT ION OF THE TRIBUNAL IN THE PRESENT ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE NOTED THAT OUT OF DISPUTED OUTSTANDING DEMAND OF RS. 34,51,73,238/- FOR THESE FOUR ASSESSMENT YEARS, THE AO HAS ALREADY COLLECTED AN AMOUNT OF RS. 22,72,75,655 /- U/S. 266(3) AND AGAINST THIS RECOVERY BY THE AO, ASSESSEE FILED WRIT PETITION BE FORE HON'BLE KARNATAKA HIGH COURT AND A SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT AS PER JUDGMENT DATED 07.08.2018, HAS DIRECTED THE AO TO REFUND AN AMOUNT OF RS. 15,82,41,007/- S.P. NOS. 242 TO 245/BANG/2018 (IN ITA NOS. 1861 TO 1864/BANG/2018) PAGE 3 OF 4 WITHIN ONE WEEK FROM THE DATE OF RECEIPT OF THE SAI D JUDGMENT. IT WAS ALSO HELD IN THIS JUDGMENT BY HON'BLE KARNATAKA HIGH COURT THAT IF THE AO DOES NOT REFUND THIS AMOUNT AS DIRECTED, LIBERTY IS RESERVED TO PETITION ER I.E. THE ASSESSEE TO APPROACH HON'BLE KARNATAKA HIGH COURT IN CONTEMPT OF COURT P ROCEEDINGS AND IN THAT SITUATION, THE HIGH HANDED RESPONDENT I.E. REVENUE WILL BE DEALT WITH APPROPRIATELY. WE ARE TOLD BY LD. AR OF ASSESSEE THAT DIVISION BEN CH OF HON'BLE KARNATAKA HIGH COURT HAS DIRECTED THE ASSESSEE NOT TO INITIATE CON TEMPT PROCEEDINGS AND NO STAY IS GRANTED BY THE DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT AGAINST OPERATION OF THIS JUDGMENT OF SINGLE JUDGE BENCH OF HON'BLE KARN ATAKA HIGH COURT. FROM THESE FACTS, WE INFER THAT ALTHOUGH THE DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT HAS NOT GRANTED STAY ON THE OPERATION OF THE JUDGME NT OF SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT BUT AT THE SAME TIME, THE ASSESSEE HAS BEEN ASKED NOT TO INITIATE CONTEMPT PROCEEDINGS FOR FAILURE OF THE REVENUE TO REFUND THE AMOUNT AS DIRECTED BY THIS JUDGMENT OF SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT. SINCE THE ISSUE REGARDING REFUND OF THIS AMOUNT IS SUB JUDICE BEFORE DIVISION BENCH OF HON'BLE KARNATAKA HIGH COURT, WE CANNOT INTERFER E IN THIS ISSUE OF REFUND BY THE AO OF THIS AMOUNT OF RS. 15,82,41,007/- AS DIRECTED BY SINGLE JUDGE BENCH OF HON'BLE KARNATAKA HIGH COURT. WE HOLD ACCORDINGLY. 5. NOW WE DEAL WITH THE ISSUE IN RESPECT OF GRANTING O F STAY. AS PER THE STAY PETITIONS FILED BY THE ASSESSEE, THE ASSESSEE IS REQUESTING F OR STAY OF THE GROSS DEMAND OF THESE FOUR YEARS AMOUNTING TO RS. 34,51,73,238/- BE FORE ADJUSTMENT OF THE AMOUNT ALREADY COLLECTED BY THE AO U/S. 266(3) OF RS. 22,7 2,75,655/-. THIS COLLECTION BY THE AO IS ABOUT 66% OF GROSS DISPUTED OUTSTANDING D EMAND FOR THESE FOUR YEARS OF RS. 34,51,73,238/-. IN VIEW OF THESE FACTS OF THE PRESENT CASE, WE PROCEED ON THIS BASIS THAT RECOVERY IS ALREADY MADE BY THE AO OF RS . 22,72,75,655/- WHICH IS ABOUT 66% OF THE GROSS DISPUTED OUTSTANDING DEMAND OF RS. 34,51,73,238/- AND HENCE, WE FEEL IT PROPER TO GRANT STAY OF THE DISPUTED OUTSTA NDING DEMAND FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THIS ORDER OR TILL THE DISP OSAL OF THESE APPEALS WHICHEVER IS EARLIER. AT THE SAME TIME, WE WANT TO OBSERVE THAT IN CASE, THERE IS ANY CHANGE IN THIS FACTUAL POSITION BECAUSE OF ANY REFUND BY THE AO AGAINST THE SAID RECOVERY U/S 266 (3), BOTH PARTIES WILL BE AT LIBERTY TO SEEK AM ENDMENT IN THIS STAY ORDER. WE HAVE NOTED THAT THE HEARING OF THESE APPEALS WAS FI RST FIXED ON 25.09.2018 AND ON S.P. NOS. 242 TO 245/BANG/2018 (IN ITA NOS. 1861 TO 1864/BANG/2018) PAGE 4 OF 4 THIS DATE, THE HEARING WAS ADJOURNED TO 15.10.2018. ON 15.10.2018, THE HEARING WAS ADJOURNED TO 31.10.2018 AND ON 31.10.2018, SINCE TH E BENCH DID NOT FUNCTION; THE HEARING WAS AGAIN ADJOURNED TO 07.02.2019. IN VIEW OF GRANTING OF STAY, WE PREPONE THE HEARING TO 03.12.2018 AND THE REGISTRY IS DIRECTED TO ISSUE NOTICES TO BOTH SIDES. 6. WE WANT TO MAKE IT CLEAR THAT THE ASSESSEE SHOULD N OT SEEK ANY ADJOURNMENT IN COURSE OF HEARING OF THESE APPEALS WITHOUT JUSTIFIA BLE REASONS AND IF THE ASSESSEE DOES SO, THEN THE STAY GRANTED BY THIS ORDER SHALL STAND VACATED AUTOMATICALLY. 7. IN THE RESULT, ALL THE FOUR STAY PETITIONS FILED BY THE ASSESSEE ARE ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF H EARING ON CONCLUSION OF THE HEARING. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 2 ND NOVEMBER, 2018. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.