Cwjc/17472/2023 Of Sis Prosegur Holding Pvt. Ltd v. Principal Commissioner Of Income Tax 1

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.17472 of 2023 ====================================================== SIS Prosegur Holding Pvt. Ltd. a Private Limited Company incorporatedunder the Companies Act, 1956 having its office at Annapoorna Bhawan,Patliputra Telephone Exchange, Kurji, Patna 800010, District Patna throughits Director Pramod Kumar Verma (Male, aged about 54 years), son of LateJagannath Prasad residing at 123B, Road No.2, Rajendra Nagar, Sampatchak,Patna Bihar -800016. ... ... Petitioner/s Versus 1.Principal Commissioner of Income Tax 1 having its office at CentralRevenue Building, Bir Chand Patel Marg, Patna 800001.Revenue Building, Bir Chand Patel Marg, Patna 800001. 2.National Faceless Assessment Centre, having its office at 6th Floor, MayurBhawan, Connaught Lane, Barakhambha, New Delhi 110001.Bhawan, Connaught Lane, Barakhambha, New Delhi 110001. 3.National Faceless Appeal Centre, having its office at 6th Floor, MayurBhawan, Connaught Lane, Barakhambha, New Delhi 110001.Bhawan, Connaught Lane, Barakhambha, New Delhi 110001. 4.Income Tax Officer, Ward 2(1) Patna. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr. D.V.Pathy, Advocate For the Respondent/s: Mrs. Archana Sinha, Sr. SC, Income Tax====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE HARISH KUMARORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 22-03-2024 The appellant is aggrieved with the assessmentorder passed by the second respondent; after which the Tribunaldirected to make inquiries as directed by the PrincipalCommissioner of Income Tax regarding the correctness of thevaluation report of the accountant, and if necessary, call for anindependent report from an expert to confront the assessee andthereafter pass a speaking order in accordance with law. 2. The challenge to the assessment order passedprior to the Tribunal’s order dated 18.05.2023 is that neither thesaid directions nor the directions of the Principal Commissionerwere complied with. 3. On facts, suffice it to notice that for theassessment year 2015-16, the assessee sold 90 lakh shares ofRs.10 face value to its own holding company. The AssessingOfficer passed Annexure-1 order, which was interfered with bya suo motu revision under Section 263 of the Income Tax Act.By Annexure-2 order, the Commissioner found that valuation ofshares was not carried out in accordance with law. Theassessment order passed under Section 143 of the Income TaxAct, 1961 was cancelled and set aside with a direction to theAssessing Officer to frame the assessment de novo by makingfresh inquiries and verification regarding the accuracy orcompleteness of such information provided by the managementof the Company for the purpose of valuation of shares as perDiscounted Cash Flow (DCF) method and finalize assessment inaccordance with the provisions of law. 4. An appeal was taken to the Tribunal whichended in Annexure-4 order. Before Annexure-4 order waspassed, the Assessing Officer passed Annexure-3 order dated 29.03.2022. The petitioner’s contention is that the directions ofthe Tribunal were not carried out in the order of assessmentpassed on remand; nor were the directions issued in the orderunder Section 263 complied with. 4. An appeal was taken to the Tribunal whichended in Annexure-4 order. Before Annexure-4 order waspassed, the Assessing Officer passed Annexure-3 order dated 29.03.2022. The petitioner’s contention is that the directions ofthe Tribunal were not carried out in the order of assessmentpassed on remand; nor were the directions issued in the orderunder Section 263 complied with. 5. Learned Senior Standing Counsel for theDepartment submits that there is now an appeal filed in theNational Faceless Appeal Center which has to be considered. Inthe circumstance of the appeal having been filed, the procedurefollowed by the Appellate Authority is to get a report from theAssessing Officer, in accordance with the directions in theTribunal’s order. It is also submitted that in the appeal filedwhen the appellant submits the Tribunal’s order, the Tribunalorder will be sent to the Assessing Officer and a report calledfor. The appellant would then be permitted to file objections tothe report of the Assessing Officer; after supply of the report tothe appellant, before a final adjudication is made after hearingthe appellant. 6. In such circumstances, we are of the opinionthat the recovery should await the disposal of the appealespecially since the demand raised is based on an assessmentorder, which was passed prior to the Tribunal’s order. It issubmitted that 20% of the amounts have already been recovered and hence, there would be no recovery carried out based on theassessment order at Annexure-3. 7. The appeal filed is numbered asNo.NFAC/2014-15/10145369 as submitted by the learnedcounsel for the petitioner. It is submitted by the learned counselfor the petitioner that amounts were recovered from the cashcredit account and this created huge liability on the petitionerespecially since the interest would run on the debit made. Thepetitioner, hence, seeks refund of the amounts already attachedand recovered from the petitioner’s account. The petitioner alsorelies on judgment at Annexure-9 of another Division Bench ofthis Court. 8. Annexure-9 decision was in a batch of three writpetitions where attachment of the bank accounts of the assesseswere made, when the assessment orders which created thedemand were challenged in appeal after depositing 20% of thedisputed tax amount under the Value Added Tax Act. Identical tothe case herein, the attachment order was made of a cash creditaccount, which is a credit facility offered to the customer by thebank subject to a limit; which even if not overdrawn to the limit,would still not have any money belonging to the assessee asdistinguished from a credit balance in a current account. But therein the demand was not met, which was met in the presentcase; which detains us from directing a refund. 9. We make it clear that if the assessment is setaside, the assessee would be entitled to the refund along withinterest payable as per the statute or that paid by the assessee inthe cash credit account; whichever is higher and if not, theassessee would be saved from the interest on the amountrecovered in the intervening period. In that circumstance, we areof the opinion that there is no requirement to direct the assesseeto be refunded the 20% already recovered. There shall be nofurther recovery based on the impugned assessment till theappeal is disposed of. 10. The writ petition stands disposed of with theabove observations but without anything said about the meritsof the assessment made. (K. Vinod Chandran, CJ) sharun/- ( Harish Kumar, J) AFR/NAFRCAV DATEUploading Date01.04.2024.Transmission Date