Teleperformance Bpo Holdings Pvt. Ltd. … v. Assistant Commissioner Of Income Tax, Central Circle 12(2)(2) And Others …

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONWRIT PETITION NO.228 OF 2020 Teleperformance BPO Holdings Pvt. Ltd. …PetitionerVs.Assistant Commissioner of Income Tax, CentralCircle 12(2)(2) and others…Respondents Mr. J. D. Mistry, Senior Advocate i/b. Mr. Madhur Agarwal and Mr. A.K. Jasani for Petitioner.Mr. Sham Walve a/w. Mr. Pritesh Chatterjee for Respondent Nos.1 to 3. CORAM : UJJAL BHUYAN &MILIND N. JADHAV, JJ.DATE :JANUARY 24, 2020 P.C.: Heard Mr. Mistry, learned senior counsel assisted by Mr. Agarwal,learned counsel for the petitioner and Mr. Walve, learned standingcounsel Revenue for respondent Nos.1 to 3. 2.By filing this Petition under Article 226 of the Constitution ofIndia, petitioner seeks quashing of the notice of demand under Section156 of the Income Tax Act, 1961 (briefly "the Act" hereinafter) issued bythe Assistant Commissioner of Income Tax, Circle 12(2)(2), Mumbaidated 27.12.2018 as well as the consequential garnishee notices andindividual recovery notices issued to the directors of the petitioner underSection 179 of the Act. 3.For the purpose of adjudication of the instant writ petition, it maynot be necessary to delve into the factual controversy in detail. Suffice itsay that in the assessment proceeding for the assessment year 2016-17,the assessee had added back to its total income its investment inIntelenet Global Services Pvt. Ltd. as a non-deductible expenditure.However, the Assessing Officer invoked Sections 60 and 63 of the Act and worked out a figure of Rs.496,25,40,000.00 as the fair market valueof the shares, taxable as income of the assessee under the head of"income from other resources". Thus, vide the assessment order dated27.12.2018, an amount of Rs.496,25,40,000.00 was rounded off as thetaxable income of the petitioner. 4.This was followed by the notice of demand under Section 156 ofthe Act dated 27.12.2018 whereby petitioner was informed that a sum ofRs.2,28,44,52,663.00 is payable as income tax. 5.It is stated that against the aforesaid assessment order dated27.12.2018, petitioner has preferred appeal under Section 246-A of theAct before the Commissioner of Income Tax (Appeals) - 20, Mumbai on23.01.2019. 6.Mr. Mistry has submitted that in the appeal proceeding, petitionerhas submitted written arguments. 7.Parallely petitioner approached the administrative Commissioneri.e. Principal Commissioner of Income Tax-12, Mumbai for stay of thedemand. 8.Mr. Mistry has also submitted that petitioner has made payment ofRs.25 crore as part of the demand. However, on a query by the Court, hesubmits that such payment is under protest. Petitioner has made detailedwritten submissions for stay of the demand. It is stated that a noticedated 08.11.2019 was issued by the office of the Principal Commissionerto the petitioner for hearing on 14.11.2019 but the said notice wasreceived by the petitioner only on 23.11.2019. Therefore, authorizedrepresentative of the petitioner could not appear for the hearing on14.11.2019 but subsequently appeared on 26.11.2019 and made oralsubmissions. However, no order has been passed on the stay prayer.While stay application was pending, notices dated 03.01.2020 underSection 226(3) of the Act were issued to Kotak Mahindra Mutual Fund and to the debtors of the petitioner. In addition, notices under Section179 of the Act dated 01.01.2020 were issued to the individual directorsof the petitioner for recovery of the amount covered by the notice ofdemand. It is at this stage that the present writ petition has been filed. and to the debtors of the petitioner. In addition, notices under Section179 of the Act dated 01.01.2020 were issued to the individual directorsof the petitioner for recovery of the amount covered by the notice ofdemand. It is at this stage that the present writ petition has been filed. 9.Mr. Mistry submits that the demand itself is untenable in law.Petitioner has a good prima facie case and has also demonstrated itsfinancial hardship because of which it is not possible on the part of thepetitioner to satisfy the demand. But the basic crux of the argument ofMr. Mistry is that when the stay application is pending and withouttaking any decision on the stay application, it was not justified on thepart of the revenue authorities in issuing the impugned notices. He hasalso placed reliance on a decision of this Court in UTI Mutual Fund Vs.Income Tax Officer, (2012) 345 ITR 71 to contend that a revenueauthority dealing with a prayer for stay is required to exercise itsjurisdiction having regard to the parameters laid down in the saidjudgment. 10.On the other hand, Mr. Walve submits that a speaking order hasbeen passed by the Assessing Officer on 20.09.2019 rejecting the prayerfor stay of the demand. It was thereafter that the impugned notices havebeen issued. 11.In reply Mr. Mistry submits that rejection of stay prayer by theAssessing Officer when the same is pending before the higher authorityis neither here nor there; it makes no material difference at all to thesituation. 12.Submissions made by learned counsel for the parties have beenconsidered. Also perused the materials on record. 13.After hearing learned counsel for the parties and on dueconsideration, Court is of the view that when the petitioner has filed the statutory appeal against the order of assessment and has also parallelyfiled an application for stay before the administrative Commissioner;without taking a decision either on the appeal or on the prayer for stay, itwas not justified on the part of the revenue authority in issuing theimpugned notices. In the circumstances, rejection of the prayer for stayby the Assessing Officer when the appeal is pending before the firstappellate authority and the stay prayer is pending before theadministrative Commissioner, in our view, would not be of muchconsequence. Therefore, taking an overall view of the matter, we feelthat the appeal filed by the petitioner under Section 246-A of the Act,which has been registered as CIT (A)-20.Mumbai/10324/2018-19 shouldbe heard and decided by the first appellate authority in accordance withlaw within a period of four weeks from the date of receipt of anauthenticated copy of this order. Ordered accordingly. During this periodof four weeks, the impugned notices under Section 179 as well as underSection 226(3) of the Act shall remain in abeyance. Petitioner shall fullyco-operate with the appellate authority while hearing the appeal. 14.Needless to say we have not expressed any opinion on merit andall contentions are kept open. 15.It is also made clear that if the appeal order goes against thepetitioner, the same shall be kept in abeyance for a further period of twoweeks from the date of receipt of the order to enable the petitioner toavail the statutory remedy as provided under the Act. 16.Writ Petition is disposed of. (MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.)