Sarang v. Kotwal, Jj

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO.905 OF 2019 Prothious Engineering Services Private Limited … PetitionerV/s. The Deputy Commissioner of Income Tax Circle 10(3)(2) and ors.… Respondents --- Mr.Jehangir Mistri, Senior Counsel with Mr.Arijit Chakravartywith Mr.Abhishek Tilak for the Petitioner.Mr.Akhileshwar Sharma for Respondent Nos.1 to 3. --- CORAM : AKIL KURESHI AND SARANG V. KOTWAL, JJ. DATE : APRIL 12, 2019. P.C.:- 1.The petitioner has challenged the condition imposed by the revenue authorities for staying the disputed tax and interestdemand arising out of the order of assessment pending appealbefore the Commissioner (Appeals). The Assessing Officer insiststhat the petitioner must deposit 20% of such amount within ashort time, subject to which the rest of the demand would be keptin abeyance. Having heard learned counsel for the partiesbroadly the picture that emerges is that the assessment order inthe present case pertaining to the said assessment year 2016-17is closely linked with the assessments of the petitioner for the Priya Soparkar 212 wpl 905-19-o assessment year 2009-10 to assessment year 2014-15. In suchcases, the Assessing Officer had made transfer pricing adjustments.The orders were challenged before the Appellate Commissionerand thereafter. The assessee’s appeals are pending before theIncome Tax Appellate Tribunal. We note that previously theTribunal had heard such appeals, but the appeals could not bedisposed of. Pursuant to an order dated 22[nd] March, 2019 passedby us in this petition, the Tribunal has passed an order dated29[th] March, 2019 (as at annexure “P” to the petition) providingan interim formula to enable the petitioner to enjoy stay againstthe recoveries in relation to the appeals pending before the Tribunal. This formula provides as under: “7.In view of the above, we grant the stay ofbalance demand and fix this appeal for AY 2014-15 on 23.04.2019 along with the other appeals forand from AY 2009-10 to 2013-14, which arealready fixed for hearing on this very date. The stayof balance demand of 90% is granted on thefollowing conditions:- a)The assessee shall deposit 5% of theoutstanding demand of Rs.4,48,35,279/- on orbefore 31.03.2019 and next 5% shall deposit on orbefore 30.04.2019. b)This stay will continue fro 180 days fromtoday or till the disposal of appeal, whichever isearlier. c)The assessee consented that the refund arising out of the processing of return for AY2017-18 amounting to Rs.21,22,236/- can beadjusted against this demand and for this learnedCounsel for the assessee made statement at bar.The Revenue will adjust this refund.d)The assessee will not seek any adjournmenton the fixed date of hearing except in exceptionalcircumstance and in case assessee want to filepaper book, he shall file one week prior to thedate of hearing.” 2.We are informed that the Tribunal suggests the appealsare likely to proceed for final hearing before the Tribunal on 23[rd]April, 2019. In the present petition, the case of the petitioner isthat the outcome of said appeal before the Tribunal wouldvirtually decide the petitioner’s appeals before AppellateCommissioner for the assessment year 2016-17. According to thepetitioner, entire additions made by the Assessing Officer in thepresent case are on account of the petitioner not being able tocarry forward the past losses for the current year. In other words,according to the petitioner, if petitioner succeeds in the appealbefore the Tribunal, it would get full relief in the pending appealbefore the Commissioner for the present assessment year 2016-17. 2.We are informed that the Tribunal suggests the appealsare likely to proceed for final hearing before the Tribunal on 23[rd]April, 2019. In the present petition, the case of the petitioner isthat the outcome of said appeal before the Tribunal wouldvirtually decide the petitioner’s appeals before AppellateCommissioner for the assessment year 2016-17. According to thepetitioner, entire additions made by the Assessing Officer in thepresent case are on account of the petitioner not being able tocarry forward the past losses for the current year. In other words,according to the petitioner, if petitioner succeeds in the appealbefore the Tribunal, it would get full relief in the pending appealbefore the Commissioner for the present assessment year 2016-17. 3.We also note that by virtue of the deposit made by thepetitioner towards disputed taxes demand for the said assessmentyear 2009-10 to 2014-15 so far and which may be furthermade pursuant to the interim directions of the Tribunal, thepetitioner would have discharged approximately 15% disputedtax and interest liability. We are informed that the petitionercompany is in financial hardship. 4.Considering totality of facts and circumstances of the case,we require the petitioner to deposit 5% of the disputed tax ofthe present year in two equal installments latest by 31[st] May 2019and 30[th] June, 2019. Subject to this condition being fulfilled,there should be no further recovery of tax and interest from thepetitioner till the disposal of the appeal by the AppellateCommissioner. Petition disposed of accordingly. The impugnedorder dated 22[nd] March, 2019 passed by the PrincipalCommissioner of Income Tax would therefore not survive. (SARANG V.KOTWAL,J.) (AKIL KURESHI,J.)