SHANGHAI ELECTRIC GROUP CO. LTD. V. DEPUTY COMMISSIONER OF INCOME TAX & ANR.

W.P.(C)/1535/2017

AI Insights

The case involves Shanghai Electric Group Co. Ltd., which filed writ petitions against the Deputy Commissioner of Income Tax concerning disputes over taxation for several Assessment Years (AYs). The core issue was the delay in the ITAT's hearings and decisions on the petitioner's appeals, which led to the petitioner seeking relief from the High Court. The petitioner argued that the ongoing appeals for AYs 2007-08 to 2011-12, which had been granted unconditional stay, should similarly protect them for AYs 2012-13 and 2013-14. The ITAT had previously denied stay for these years, citing the interest of revenue and the absence of financial hardship or evidence of coercive action against the petitioner. The High Court found that the ITAT had not adequately addressed the delays and the repeated adjournments requested by the revenue, leading to its decision to mandate a prompt resolution of the disputes.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 751894 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 20-02-2017
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: DILEEP SHIVPURI; SANJAY KUMAR; VIKRANT MAHESHWARI
• Assessee Lawyers: DEEPAK CHOPRA; MANASVINI BAJPAI
• Keywords: Assessment Year; Income Tax; Income tax appellate tribunal; Permanent establishment; Stay order
• Section: 147; 148; 143(3); 153A; 68

Judgement Text

"/ $~59&69 * IN THE HIGH COURT OF DELHI AT NEW DELHI 4- W.P.(C) 1535/2017, CM APPL. 6908/2017 SHANGHAI ELECTRIC GROUP CO. LTD. Petitioner Through: Mr. Deepak Chopra and Ms. Manasvini Bajpai, Advs. Versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. Respondent Through: Mr. Dileep Shivpuri, Sr. St. Counsel and Mr. Sanjay Kumar, Jr. St. Counsel and Mr. Vikrant Ashok Maheshwari, Adv. + W.P.(C) 1544/2017, CM APPL. 6918/2017 SHANGHAI ELECTRIC GROUP CO. LTD Petitioner Through: Mr. Deepak Chopra and Ms. Manasvini Bajpai, Advs. Versus DEPUTY COMMISSIONER OF INCOME TAX, & ANR. Respondent Through: Mr. Dileep Shivpuri, Sr. St. Counsel and Mr. Sanjay Kumar, Jr. St. Counsel and Mr.Vikrant Ashok Maheshwari, Adv. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI ORDER , % 20.02.2017 1. Issue notice. Mr. Dileep Shivpuri accepts notice. 2. The petitioner's grievance is that its appeals before the Tribunal for previous Assessment Years (AYs) 2007-08 to 2011-12 are W.P.(C) 1535/2017 Page 1 of 4 Digitally Signed By:AMULYA Signature Not Verified pending and that as a consequence of the orders of stay, no recovery proceedings were initiated. In these circumstances, when for AYs 2012-13 and 2013-14, the Assessing Officer (A.O.) proceeded according to the previous pattern and held that the petitioner was liable to taxation because it had a P.E. and proceeded to determine its liability, the same protection ought to be given during the pendency of this appeal. However, the Income TaxAppellate Tribunal (ITAT) by the impugned orderdated 31.01.2017 inter alia observed as follows: \"5. Assessee for up to AY 2011-12 amounting in ' all to ^92.33 crores stay has keen granted by the coordinate bench unconditionally. We have also noted the history ofstay granted in the case ofthe assessee for AY201011. Originally the stay was granted to the assessee as stated in para No.2 of the order dated 30.01.2015, wherein it has been pleaded that appeal ofthe assesseefor AY 2010- 11for which stay was granted has been disposed off and matter has been restored to the file of Assessing Officer vide order dated 05.09.2014. Now by the order dated 10.03.2016 stay for AY 2010-11 was once again granted. In the second round ofproceedingsfor the aboveyear the stand ofthe revenue remained unchanged. Therefore, it !• is apparent that the same matter has come back before the tribunal where the stand ofthe revenue J| remained unchanged. Starting from the year AY 2007-08 to 2011-12 the stay has been granted to the assessee without any pre-deposit. During the course ofhearing a query was raised by the bench is that how the interest of revenue can be safeguarded if the issue is ultimately settled against the assessee as the assessee does not have W.P.(C) 1535/2017 Page2 of 4 J -^7 any permanent establishment or does not have any asset in India. This question remained unanswered but it was submitted that assessee is a multinational company carrying on many projects in India. The AR did not offer any sum as pre- deposit for stay of demand in dispute. Even otherwise, financial hardship or any evidence of coercive action from was not .demonstrated. Therefore, looking to the interest ofthe revenue in the matter we are not inclined to grant stay in the present matter for above two years i.e. 2011-12 and 2012-13. In view of this we reject these stay petitions however in the interest of justice, we direct the registry to fix the hearing of above appeals for AY 2012-13 and 2013-14 on priority basis for hearing along with appeal for earlier years on 27.04.2017. We direct the parties to not to seek adjournment as substantial revenue is involved in these appeals. We order accordingly. \" 3. This Court heard the learned counsel for the parties. Between 12.01.2015 and 09.01.2017, the petitioner's appeal was listed on 21 occasions before the ITAT. Apparently, according to the record, the Bench did not function on four occasions and on other three occasions; the appeal could not be taken up on account of unscheduled public holiday and on the other 13 occasions, the revenue requested for adjournment. 4. Having regard to these developments and the state of the record, the Court is of the opinion that the ITAT should hear the parties and decide all appeals pertaining to the petitioner for AYs 2007- 08 to 2013-14 at the earliest convenient date and deliver its final W.P.(C) 1535/2017 Page 3 of4 A orders latest by 31®' May, 2017. In the meanwhile, the respondent shall maintain the status quo and shall not take coercive action. 5. The parties shall be present before the ITAT on 06.03.2017 which shall pass appropriate directions for further hearing of the appeal giving convenient bulk dates. The order - shall be communicated directly to the Registrar of the ITAT for appropriate action. 6. The writ petitions are disposed off in the above terms. 7. Master. Order dastl to the parties, under the signature of the Coun S.RAVINDRA BHAT, J NAJMIWAZIRI, J FEBRUARY 20, 2017/acm W.P.(C) 1535/2017 Page 4 of 4 "