Bombay H.C : Where appeal of assessee was awaiting disposal by Commissioner (Appeals) and assessee had deposited 38 per cent of outstanding demand, ad-interim stay was to be granted and revenue was to be restrained from taking any coercive steps to recover outstanding demands from assessee

High Court Of Bombay

Vodafone India Ltd. vs. CIT, TDS

Section 220

Assessment years 2000-01 to 2012-13

M.S. Sanklecha And Riyaz I. Chagla, JJ.

Writ Petition (L) No. 18 Of 2018

January  4, 2018

ORDER

1.Not on board. Mentioned at 11.00 a.m. for urgent reliefs as the Respondent – Revenue has threatened to attach its bank accounts. The Petitioner was directed to serve notice upon the Respondent – Revenue in particular the Assessing Officer and mention again at noon. At noon when the Petition taken up on mentioning, none appeared for the Respondent – Revenue, despite service. The Petition was kept back to 3.00 p.m. The Petitioner was directed to give a fresh notice to the Respondent Revenue of the Petition being taken up at 3.00 p.m. for consideration. At 3.00 p.m. when the Petition was taken up, none appeared for the Respondents inspite of being served again. Mr. Dwarkadas the learned counsel for the Petitioner undertakes to file an Affidavit of Service evidencing service twice upon the Respondents of today’s application one for 12.00 noon and the other for 3.00 p.m. today.

2. This Petition under Article 226 of the Constitution of India challenges the order dated 21st December 2017 passed by the Commissioner of Income Tax (TDS) – 2 i.e. Respondent No.1. By the impugned order dated 21st December 2017, the Respondent No.1 rejects the Petitioner’s application for continuation of stay in respect of the outstanding demand of Rs.43.79 Crores out of Rs. 71.16 Crores raised by the Revenue relating to Assessment Year 2000 – 01 to 2012 – 13. These demands are subject matter of 17 Appeals pending before the Commissioner of Income Tax (Appeals) from the orders of the Deputy Commissioner of Income Tax (TDS) i.e. Respondent No.2.

3. Consequent to the impugned order dated 21st December 2017 of Respondent No.1, by letter dated 26th December 2016, the Respondent No.2 Deputy Commissioner of Income Tax (TDS) directed the Petitioners to pay the outstanding demand of Rs.43.79 Crores for the Assessment Year 2000 – 01 to Assessment Year 2012 – 13 immediately, failing which coercive proceedings would be commenced as the Petitioner is an assessee in default. In the above view, the Petitioner approached the Commissioner of Income Tax (Appeals) by letter dated 2nd January 2018 seeking early disposal of its 17 pending Appeals relating to the above demand (of which hearing had already commenced in February 2017). This in view of the refusal of the Revenue to extend the stay or in the alternative sought the stay of the outstanding demand of Rs.43.79 Crores till the disposal of the Appeal as an Appellate Authority. The Petition avers that it had visited the office of Commissioner of Income Tax (Appeals) to press its application, when it was informed that, the Commissioner of Income Tax (Appeals) was not available. At the bar, we are informed that the Petitioner was told by the Office of the Commissioner of Income Tax (Appeals) that he would not be available until next week. In the above circumstances the Petitioner states that on 3rd January 2018 the Petitioners met the Deputy Commissioner of Income Tax – Respondent No.2 requesting him to stay his hands from adopting coercive proceedings for recovery of the outstanding demand of Rs.43.79 Crores till its application dated 2nd January 2018 is disposed of by the Commissioner of Income Tax (Appeals). However the Petition avers that they were informed by the Respondent No.2 to pay the outstanding demand by 12.00 noon on 4th January 2018 otherwise he would be constrained to adopt coercive proceedings against the Petitioner. It is in these circumstances that the Petitioner is compelled to move this Court for urgent relief.

4. We note that an application dated 11th March 2016 to stay the demand pending disposal of its Appeals was disposed of by the Commissioner of Income Tax – Respondent No.1 by an order dated 22nd March 2016. By the above order dated 22nd March 2016 the stay of the demands in respect of pending Appeals was granted till 30th September 2016 or disposal of the Appeals by the CIT (Appeals) whichever is earlier. This on deposit of 15% of the demand was on the basis CBDT circular dated 9th February 2016, wherein it has been provided that when the outstanding demand is in dispute before the CIT (Appeals) then its recovery be stayed subject to the Assessee paying 15% of the confirmed demand which is in Appeal. A copy of the aforesaid order dated 22nd March 2016 is tendered across the bar and marked ‘A’ for identification.

5. The aforesaid stay was continued by a further order dated 6th October 2016 (on the same premise as the order dated 22nd March 2016) till 31st March 2017 or earlier disposal of the Appeals by the CIT (Appeals). A copy of the aforesaid order is tendered across the bar and marked ‘B’ for identification.

6. On 11th May 2017, the Respondent No.1 granted further extension of the earlier stay of demand dated 6th October 2016 till 30th September 2017 or disposal of the Appeals by CIT (Appeals) whichever is earlier. This was on the same premise as the earlier orders dated 22nd March 2016 and 6th October 2016. A copy of the aforesaid order dated 11th May 2017 is tendered across the bar and marked ‘C’ for identification.

7. On 29th September 2017, the Petitioner filed an application to the Commissioner of Income Tax – Respondent No.1 seeking extension of stay of the outstanding demands as their Appeals were still awaiting disposal by the CIT (Appeals). However by the impugned order dated 21st December 2017 the application dated 29th September 2017 was rejected. This on the ground that the Petitioner has huge resources and no hardship would be caused to the Petitioners by depositing the amount. It is pertinent to note that earlier the stay granted and also extended from time to time by placing reliance upon a binding CBDT circular which direct the officers of the Revenue to grant a stay till the disposal of the first Appeal on payment of 15% disputed amount was completely ignored. In this case the Petitioner has out of a total demand of Rs.71.16 Crores, deposited Rs.27.45 Crores i.e. almost 38% of the outstanding demand. Prima facie, we also find that the impugned order dated 21st December 2017 of the Respondent No.1 has completely ignored the parameters laid down by this Court in KEC International Ltd. v. B.R. Balakrishnan [2001] 251 ITR 158/119 Taxman 974 (Bom.)., UTI Mutual Fund v. ITO [2012] 19 taxmann.com 250/206 Taxman 341/345 ITR 71 (Bom.), and MMRDA v. Dy. DIT [WP(L) No. 2348 of 2014, dated 29-10-2014], for deciding stay applications. Further as held by this Court mere having of funds i.e. no financial hardship would not itself justify the deposit where a prima facie case is made out. (See UTI Mutual Fund v. ITO [2013] 31 taxmann.com 222 (Bom.). The impugned order also nowhere even remotely attributes that the delay in disposal of the pending Appeals was on account of the Petitioner.

8. At this stage the Petitioner seek leave to amend the Petition. This to bring on record better and further particulars in support of its case. This for the reason that the Petition was filed on a very urgent basis and detailed particulars remained to be mentioned.

9. In the above circumstances, it would be in the interest of justice that pending consideration of this Petition and the Respondent – Revenue’s response to it, that the following order is passed:

(a) There shall be an ad-interim stay in terms of prayer clause (c) to the Petition i.e. Respondents are restrained from taking any coercive steps to recover the amount of Rs.43.79 Crores or any part thereof being the outstanding demands in respect of its Appeals pending before the Commissioner of Income Tax (Appeals) till the next date.

(b) The Petitioners application to amend this Petition so as to bring on record better and further particulars in support of its case is allowed.

(c) Amendment to be carried out on or before 5th January 2018 and a copy of the amended Petition will also be served upon the Respondents on or before 5th January 2018.

(d) Liberty to the parties to apply.

(e) Writ Petition is adjourned to 12th January 2018.

[Citation : 400 ITR 516]