Atos Information Technology Hk Ltd v. The Income Tax Appellate Tribunal Mumbai And Ors

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION LODGING NO.2860 OF 2013 WITH WRIT PETITION LODGING NO.2861 OF 2013 Atos Information Technology HK Ltd....Petitioner. vs.The Income Tax Appellate TribunalMumbai and ors....Respondents. Mr. Percy Pardiwala, Senior Advocate i/by Atul K. Jasani for Petitioner.Mr. Vimal Gupta, Senior Advocate i/by Mr. Vipul A. Bajpayee for Respondent. CORAM : MOHIT S. SHAH, C.J. ANDM.S. SANKLECHA, J.DATE :26 November 2013 DATE : PC: Rule, returnable forthwith. At the instance and the request of the Counsel for both the sides the petition itself is taken up for final disposal. 2)By these two petitions the petitioner challenges a common order dated 4 October 20123 passed by the Income Tax Appellate Tribunal (the Tribunal). By the common impugned order dated 4 October 2013 the petitioner's application for extending the stay of recovery of demand for assessment years 2006-07 and 2008-09 pending the disposal of the appeal by the Tribunal was dismissed. This in spite of the fact that earlier application for stay was allowed by the Tribunal pending disposal of the appeal and there was no change in circumstances warranting a rejection of the stay application. 3)Briefly, the facts leading to these petitions are that for assessment years 2006-07 and 2008-09 the petitioner had filed appeals to the Tribunal from the orders of the Assessing Officer dated 11 August 2011 for assessment year 2006-07 and on 10 August 2011 for assessment year 2008-09 of the Assessing Officer consequent to the directions of a Dispute Resolution Panel. The tax demand raised for assessment year 2006-07 was Rs.2.46 crores and interest thereon at Rs.1.94 crores aggregating to Rs.4.40 crores. So far as the demand raised for assessment year 2008-09 is concerned, the tax demand was Rs.4.27 crores and interest thereon was Rs.2.97 crores aggregating to Rs.7.24 crores. 4)Before the Tribunal the petitioner sought stay of the demand in its pending appeals for assessment years 2006-07 and 2008-09 till the disposal of the appeals by the Tribunal. On 6 January 2012, the Tribunal passed a common order on the petitioner's stay applications for both the assessment years 2006-07 and 2008-09 granting a stay on payment of Rs.1.00 crore in respect of each of the two appeals. The petitioner complied with the same. Thereafter, the hearing of the appeal on merits before the Tribunal was adjourned from time to time at the instance of the revenue. In fact, at one stage, the appeals were also finally heard. However, before a final order could be passed, the bench of the Tribunal which heard the appeal decided on 21 August 2012 to de-part heard the appeal. In the mean time, the petitioner from time to time sought extension of stay granted by the Tribunal and the extension was granted on 27 July 2012 and 12 October 2012 upto March 2013. On 12 April 2013, Tribunal extended the stay upto 30 September 2013 on petitioner further depositing a sum of Rs.1.00 crore in respect of assessment year 2006-07 and a sum of Rs.2.00 crores in respect of assessment year 2008-09. The petitioner has duly complied with the aforesaid directions. 5)Thereafter, the petitioner on 25 September 2013 filed a further application for renewal of stay before the Tribunal. By impugned order dated 4 October 2013 the Tribunal refused to extend the stay and dismissed the petitioner's' application only on the ground that the petitioner does not have any financial difficulty. extension was granted on 27 July 2012 and 12 October 2012 upto March 2013. On 12 April 2013, Tribunal extended the stay upto 30 September 2013 on petitioner further depositing a sum of Rs.1.00 crore in respect of assessment year 2006-07 and a sum of Rs.2.00 crores in respect of assessment year 2008-09. The petitioner has duly complied with the aforesaid directions. 5)Thereafter, the petitioner on 25 September 2013 filed a further application for renewal of stay before the Tribunal. By impugned order dated 4 October 2013 the Tribunal refused to extend the stay and dismissed the petitioner's' application only on the ground that the petitioner does not have any financial difficulty. 6)The petitioner has challenged the impugned order on the ground that the stay granted earlier was not extended without considering the prima facie merits of the petitioner's case and also ignoring the fact that the appeals have been fixed for hearing on 26 November 2013. It is submitted on behalf of the petitioner that out of tax demand in the aggregate of of Rs. 6.75 crores for assessment year 2006-07 and 2008-09 the petitioner had already deposited an amount of Rs.5.00 crores. It was emphasized that the the present proceedings for assessment year 2008-09 have emanated from notice issued for reopening Section 147/148 of the Act. The issue arising in both the appeals is in respect of the quantum of tax payable on royalty payment. Further, the fact that from the earlier assessment order for assessment year 2006-07 with regard to quantum issue itself the appeal had been filed thus making entire proceedings for reopening for assessment year 2006-07 without jurisdiction in view of 3rd proviso to Section 147 of the Act. Besides there was no change in circumstances from the circumstances prevailing when stay was granted earlier which would warrant the passing of the impugned order. The delay in the disposal of the appeals was not on account of the petitioner and it has not sought any adjournment in respect of its appeals before the Tribunal. Thus, it is submitted that the impugned order is arbitrary and the stay needs to be extended till the disposal of the appeal. 7)Mr. Gupta, learned Senior Counsel for the Revenue submits that extension for stay could not have been granted by the Tribunal as the same would be without jurisdiction in terms of Section 254 of the Act. The period for which a stay can be granted by the Tribunal was only 365 days and this has already expired in the present case. It is further submitted that as the petitioner was not having any financial difficulty it should be directed to pay the entire demand of tax and interest thereon pending the result of the appeals before the Tribunal. 8)We have considered the submissions. We find that the impugned order of the Tribunal has refused to extend the stay not on the ground that it has no power to do so under Section 254 of the Act but only on the ground that the petitioner has no financial difficulty. However, in any view of the matter, we find that the stay has been granted by the Tribunal from 27 July 2012 onwards and the petitioner has not in any manner contributed in the delay in disposing of the appeal by the Tribunal. Thus, when there is no change in circumstances which first led to granting of stay and continuing of the same by the 8)We have considered the submissions. We find that the impugned order of the Tribunal has refused to extend the stay not on the ground that it has no power to do so under Section 254 of the Act but only on the ground that the petitioner has no financial difficulty. However, in any view of the matter, we find that the stay has been granted by the Tribunal from 27 July 2012 onwards and the petitioner has not in any manner contributed in the delay in disposing of the appeal by the Tribunal. Thus, when there is no change in circumstances which first led to granting of stay and continuing of the same by the Tribunal and accepted by the revenue, we see no reason as to why the stay should not be extended. This is particularly so as the appeal was fixed today for final hearing however, we are informed that the same has been adjourned to some time in February 2014. We also note the fact that an amount of Rs.5.00 crores has been deposited by the petitioner and one of the appeal for assessment year 2006-07 emanate from reopening notice and the same appears to be without jurisdiction under the 3[rd] proviso to Section 147 of the Act as appeals were filed on the same subject matter from the original assessment order. In view of the above, it would be in the interest of justice if demands are stayed for assessment year 2006-07 and 2008-09 till the disposal of the appeal by the Tribunal. 9)In view of the above, we dispose of these petitions with directions to the Tribunal to dispose of the pending appeals of the petitioner for assessment years 2006-07 and 2008-09 as expeditiously as possible and in any case within a period of four months from today. In the mean time, respondents shall not take any coercive action against the petitioner for recovery of tax demand for the assessment years 2006-07 and 2008-09. 10)Accordingly, both the petitions are disposed of in the above terms with no order as to costs. CHIEF JUSTICE M.S. SANKLECHA, J.