Tca/648/2019 Of M/S.intimate Fashions(I) Pvt Ltd v. Joint Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE DR.VINEET KOTHARI, ACTING CHIEF JUSTICE Intimate Fashions (India) Private Limited,Thiruporur Kottamedu High Road,Nandhivaram Village,Guduvanchery-603 202...Appellant Joint Commissioner of Income-tax,Corporate Circle 2(2),Nungambakkam, Chennai-600 034.. Respondent Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order of the Income-Tax Appellate Tribunal'D' Bench, Chennai, dated 21.06.2019, in S.P.No.200/Chny/2019,against the Joint Commissioner of Income Tax(OSA) corporatecircle-2(2) Chennai-34, against the order of the Income TaxAppellate Tribunal “D”Bench, Chennai in PAN No. . For Appellant : Mr.Srinath Sridevan For Respondent: Mr.Karthik Ranganathan JUDGMENT (Judgment of the Court was made by The Hon'ble Acting ChiefJustice) This appeal has been filed by the assessee aggrievedby the interlocutory order passed by the learned Income-TaxAppellate Tribunal 'D' Bench, Chennai, on 21.06.2019, for theAssessment Year 2009-10. By the said order, the learnedTribunal has rejected the stay application filed by theappellant/assessee before it. The appeal for the saidAssessment Year 2009-10 is still pending before the Tribunal andhearing is said to be fixed on 31.12.2019. 2.The learned counsel for the Assessee Mr.SrinathaSridevan has urged before us that even though for the previousAssessment Years 2001-02 to 2003-04, the Assessee had succeededon the same issue, viz., dis-allowance of the commission paid byit to its Associate Enterprise M/s.Triumph InternationalOverseas Limited, Liechtenstein, but without even noticing thesaid fact, the learned Tribunal has observed in the order thatthe issue relating to Arms Length Price Adjustment will requireverification of various factual aspects, vide paragraph No.4 ofits order but held that “therefore it cannot be said that theAssessee company is having prima facie case in its favour onmerits”. 3.The learned counsel, therefore, submitted that inview of the above self-contradictory observations of the learnedTribunal, in the facts of the case, the interim relief in favourof the Assessee ought to have been granted. The learned counselalso drew our attention to the fact that the Assessee Companyhas already paid a sum of Rs.75 lakhs as against the demand ofRs.1.84 Crores for the said Assessment Year 2009-10, as noted inthe interim order passed by the coordinate Bench of this Court,on 29.08.2019, in the present appeal. 4.The learned counsel for the respondent DepartmentMr.Karthik Ranganathan, however, supported the impugned order. 5.Having heard the learned counsels for the parties,we are of the opinion that the present matter deserves to beremitted back to the learned Tribunal for passing a reasoned anda speaking order on the stay application filed by the Assessee.For arriving at the conclusion whether the Assessee has a primafacie case or not, at least, the case facts should have beendiscussed by the Tribunal in some detail. Whether such dis-allowance has been made for the earlier assessment years or notwas a relevant fact, which appears to have escaped the notice ofthe Tribunal, though raised in the stay application filed beforethe learned Tribunal. Three relevant aspects should be alwaystaken into consideration by all the Tribunals or civil Courts,while considering the stay applications, which are (I)existence of prima facie case (II) Irreparable injury aspect and(III) Balance of convenience. These are well settled andstatutorily required para meters to be considered by dealingwith stay applications. 6.The learned Tribunals or Civil Courts are bound togive their findings and reasons, even though tentative, withrespect to the above three aspects of the matter while dealing with any stay applications before them. 6.The learned Tribunals or Civil Courts are bound togive their findings and reasons, even though tentative, withrespect to the above three aspects of the matter while dealing with any stay applications before them. 7.The tenor of the order impugned before us does notmeet these requirements. While holding that the Assessee has noprima facie case, the Tribunal has not even whispered about thefacts of the case. A self conflicting observation has been madein Paragraph No.4 of the order, where, the Tribunal says thatthe making of the Arms Length Price Adjustment will require afactual verification by the fact finding body, viz., theTribunal itself, while it hears the appeal finally, but theAssessee has no prima facie case. 8.Therefore, we allow the present appeal and set asidethe impugned interlocutory order, dated 21.06.2019, passed bythe Tribunal and request the learned Tribunal to hear theparties on the said stay application again and pass appropriatefresh order in the matter expeditiously, preferably, within aperiod of three months from today. The parties in the firstinstance, without any further notice from the Tribunal, mayappear before the Tribunal on 03.10.2019. No costs. Connectedmiscellaneous petition is closed. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar mskTo: 1.Joint Commissioner of Income-tax,Corporate Circle 2(2),Nungambakkam, Chennai-600 034 2.The Income-Tax Appellate Tribunal 'D' Bench, Chennai +1cc to Mr.Srinath Sridevan, Advocate SR.83305 RGN(CO)CB(04/12/2019)