The Honourable Mr.justice R.mahadevanandthe Honourable Mr.justice J.sathya Narayana Prasad W.a v. Cognizant Technology Solutions India Private Limited

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 24.03.2022CORAM : THE HONOURABLE MR.JUSTICE R.MAHADEVANANDTHE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD W.A.NO.457 OF 2022ANDC.M.P.NO.3318 OF 2022 1. The Commissioner of Income Tax (Appeals)–18, 3[rd] Floor, Investigation Building, No.46 (Old No.108), Mahatma Gandhi Road, Nungambakkam, Chennai - 600 034.2. The Assistant Commissioner of Income Tax, Circle - 1, Large Tax Payer Unit, 7[th] Floor, Wanaparthy Block, Aayakar Bhawan, Nungambakkam, Chennai – 600 034.3. The Assistant Commissioner of Income Tax, Central Circle - 1(1), 3[rd] Floor, Investigation Building, 46 (Old No.108), Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034.4. The Principal Commissioner of Income Tax, Central Circle - 1, 3[rd] Floor, Investigation Building, 46 (Old No.108), Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034.... Appellants/Respondents Versus Cognizant Technology Solutions India Private Limited,No.165, Menon Eternity Building,6[th] Floor, St. Mary's Road,Chennai - 600 018.... Respondent/Petitioner PRAYER:- Writ Appeal filed under Clause 15 of the Letters Patentagainst the order passed by the learned Single Judge inW.P.No.1360 of 2022, dated 01.02.2022. Writ Petition is filed under Article 226 of theConstitution of India to issue a Writ of Certiorarified Mandamusforbearing the respondents, their agents or subordinates fromenforcing or giving effect the order bearing No.ITBA/COM/F/17/2020-21/1026999296(1) dated 29 April, 2020 issued by the2[nd] Respondent until the disposal of the Appeal No.ITA No.CIT(A)Chennai-17/10011/2020-21 on the file of the 1[st] respondent andfor a period of 30 days thereafter and also direct the4[th] Respondent to release it lien on all the fixed depositsenumerated in the Schedule below. JUDGMENT (Judgment of the court was delivered by R.MAHADEVAN, J.) This writ appeal has been filed by the appellant/Revenue,challenging the correctness of the order dated 01.02.2022 passedby the learned Judge in W.P.No.1360 of 2022. 2. For the sake of convenience, the relief sought in theaforesaid writ petition filed by the respondent/assessee, isreproduced below: “...to issue a writ of Certiorarified Mandamusforbearing the respondents, their agents, orsubordinates, from enforcing or giving effect theorder bearing No.ITBA/COM/F/17/2020-2021/1026999296(1), dated 29[th] April 2020 issued by the second https://hcservices.ecourts.gov.in/hcservices/ respondent until the disposal of the Appeal No.ITA(A), Chennai -17/10011/2020-2021 on the file of thefirst respondent and for a period of 30 daysthereafter and also direct the fourth respondent torelease its lien on all the fixed deposits.” 3. By the order impugned herein, the learned Judge disposedof the writ petition in the following terms: “15. In view of the above, this writ petitionis disposed by directing the respondents not toencash the bank guarantee or the amounts lying indeposit pursuant to order of this Court pendingfurther orders by the CIT Appeals. In case, adverseorders are passed and appeal is filed by thepetitioner within the time stipulated under theprovisions of the Income Tax Act, 1961 totalrecovery cannot exceed 20% in terms of circularissued under Section 220(6) of the Income Tax Act,1961 and excess lying as security shall berefunded back to the petitioner.....” 4. At the outset, it is but necessary to look into thenecessary facts leading to the filing of this writ appeal, whichread as follows: “15. In view of the above, this writ petitionis disposed by directing the respondents not toencash the bank guarantee or the amounts lying indeposit pursuant to order of this Court pendingfurther orders by the CIT Appeals. In case, adverseorders are passed and appeal is filed by thepetitioner within the time stipulated under theprovisions of the Income Tax Act, 1961 totalrecovery cannot exceed 20% in terms of circularissued under Section 220(6) of the Income Tax Act,1961 and excess lying as security shall berefunded back to the petitioner.....” 4. At the outset, it is but necessary to look into thenecessary facts leading to the filing of this writ appeal, whichread as follows: 4.1. The respondent/assessee is engaged in the business ofsoftware development and related services/solutions; and itprovides/exports customized software services and relatedsolutions mainly to its associated enterprises situated outsideIndia. During the financial year 2016-17, based on the orderdated 18.04.2016 passed by this court in CP.No.102 of 2016, theypurchased 94,00,534 equity shares at a price of Rs.20,297/- pershare from its shareholders and paid a total consideration ofRs.19,080.26 crores on 19.05.2016, after deduction of tax atsource, to the tune of Rs.898.01 crores. 4.2. For the Assessment Year 2017-18, the respondent/assessee filed its return of income on 28.11.2017, which wasprocessed under section 143(1) of the Income Tax Act, 1961 (inshort, 'the Act') on 30.03.2019. After scrutiny of the same,notice under section 143(2) came to be issued on 09.08.2018 andan assessment order was passed on 30.09.2021. Earlier, acommunication dated 22.03.2018 was sent to the respondent/assessee stating that they are deemed to be an assessee-in-default under section 115Q of the Income-tax Act (in short, 'theAct') for the alleged failure to pay tax under section 115-O ofthe Act, in respect of the consideration paid by them forpurchase of its own shares. Consequently, on 26.03.2018, asurvey under section 133A of the Act was conducted at the office of the respondent/assessee and based on the materials seizedduring the course of the said search, garnishee notices undersection 226(3) of the Act were issued by the Assessing Officerto the bankers of the respondent/assessee and the bank accountsof the respondent/assessee were frozen. 4.3. Challenging the aforesaid communication dated22.03.2018, the respondent/assessee filed WP.No.7354 of 2018, inwhich, an interim order was granted on 03.04.2018 on conditionthat they should remit 15% of the tax demanded and furnish abank guarantee by way of fixed deposits for the remaining taxes.Ultimately, by order dated 25.06.2019, the main writ petitionwas dismissed, with liberty to the respondent/assessee to preferan appeal before the appellate authority. Aggrieved by the saidorder, the respondent/assessee filed WA.No.2063 of 2019, whichwas allowed in part, by order dated 06.09.2019. Subsequently,they went on further appeal before the Hon'ble Supreme Court inCA.No.1992 of 2020, which was disposed of, by order dated04.03.2020. 4.4. Pursuant to the order of the Hon'ble Supreme Court, therespondent/assessee filed a detailed response and requested thesecond appellant to lift the lien on the fixed deposits. Byorder dated 29.04.2020, the second appellant rejected the saidrequest and raised a demand of Rs.4853,42,38,214/-. Challengingthe same, the respondent/assessee preferred an appeal along withdirection application before the first appellant for release oflien on all the Fixed Deposits and refund of Rs.495 croresdeposited by them. Since the appellate authority did not passany order on the said application, the respondent/assessee filedW.P.No.1360 of 2022, which was disposed of, by the learnedJudge, by the order dated 01.02.2022, which is impugned in thiswrit appeal. 4.4. Pursuant to the order of the Hon'ble Supreme Court, therespondent/assessee filed a detailed response and requested thesecond appellant to lift the lien on the fixed deposits. Byorder dated 29.04.2020, the second appellant rejected the saidrequest and raised a demand of Rs.4853,42,38,214/-. Challengingthe same, the respondent/assessee preferred an appeal along withdirection application before the first appellant for release oflien on all the Fixed Deposits and refund of Rs.495 croresdeposited by them. Since the appellate authority did not passany order on the said application, the respondent/assessee filedW.P.No.1360 of 2022, which was disposed of, by the learnedJudge, by the order dated 01.02.2022, which is impugned in thiswrit appeal. 5. Assailing the order impugned herein, Mr.R.SankaraNarayanan, learned Additional Solicitor General of Indiaappearing for the appellants made the following submissions: 5.1. The subject matter in issue was already settled by theHon'ble Supreme Court, however, without any cause of action, therespondent/assessee was re-agitating the same by invoking writjurisdiction, which is an abuse of process of law. 5.2. Pursuant to the direction of the Hon'ble Supreme Courtissued on 04.03.2020 in CA.No.1992 of 2020, the authorityconcerned, after giving opportunity of hearing to therespondent/assessee, has passed the order dated 29.04.2020raising demand of Rs.4,853.42 crores (comprising tax undersection 115-O of Rs.3,301.65 crores + interest under section115-P of Rs.1,551.78 crores), but the department has not taken any coercive action, after passing of the said order dated29.04.2020; the order of the Supreme Court dated 04.03.2020 inCA.No.1992 of 2020, is still in operation; and as such, theorder of the learned Judge in regard to the directions issued onrecovery and release of the assets, is erroneous, withoutjurisdiction and contrary to the facts and circumstances of thecase. 5.3. As per the provisions of section 220(6), the assessingofficer is empowered to stay recovery of demand and the saidpower could be exercised only as long as the appeal is pendingbefore the CIT(A); once the appeal is disposed of by the CIT(A),the power to grant stay of recovery of demand vests with theIncome Tax Appellate Tribunal as per section 254(2A) of the Act,which also stipulates that the stay of recovery of demand cannotnormally exceed 180 days and in fit cases, upto 365 days; theorder of stay stands vacated after the expiry of 365 days, ifthe delay in disposing the appeal is attributable to theassessee; and hence, the order passed by the learned Judge ingranting advance and indefinite stay of recovery of 80% of thedemand, gravely prejudices the Revenue's interest and alsoleaves the department without security for such a huge demand ofRs.4853.42 crores. 5.4. The first appellate authority, without examining theissues and facts in totality, would not be in a position to passany interim direction on the release of assets, when a hugedemand has been outstanding. Moreover, there was no requirementto pass any interim direction, as the Assessing Authority hadmaintained status quo in regard to recovery measures. 5.4. The first appellate authority, without examining theissues and facts in totality, would not be in a position to passany interim direction on the release of assets, when a hugedemand has been outstanding. Moreover, there was no requirementto pass any interim direction, as the Assessing Authority hadmaintained status quo in regard to recovery measures. 5.6. As per the CBDT guidelines, the assessing officer shallgrant stay of demand till the disposal of appeal before the CIT(A) on payment of 20% of demand unless the case falls incategory B. In para B, the circular provides that the AssessingOfficer may require payment of amount higher than or lower than20% of demand subject to the conditions stipulated in theguidelines, depending on the facts and circumstances of thecase. That apart, as per the CBDT Instruction No.1914 dated02.02.1993, the Assessing Officer, while granting stay of demandmay impose such conditions, as he may think fit and which mayinclude requiring the assessee to offer suitable security tosafeguard the interest of the revenue. Thus, without examiningthe facts of the case and assigning proper reasons, the learnedJudge erred in passing orders, regarding the recovery andrelease of the assets. 5.7. Ultimately, it is submitted that in the light of theorder of the Hon'ble Supreme Court, the department is ready toabide by any direction that may be issued by the CIT(A). https://hcservices.ecourts.gov.in/hcservices/ With these submissions, the learned counsel submitted thatthe writ appeal may be allowed by setting aside the order passedby the learned Judge. 6. Per contra, Mr.Ajay Vohra, learned senior counselappearing for the respondent/assessee has putforth the followingsubmissions: 6.1. As on date, the respondent has paid the followingamounts viz., (i) Rs.898 crores as TDS treating the transactionas a capital gain transaction; (ii)Rs.495 crores as cash and(iii)fixed deposits of Rs.2806 crores in complying with theorder of this court dated 03.04.2018. It is further submittedthat the amount of fixed deposits over which the department haslien, currently stands at Rs.2,956 crores. 6.2. The Hon'ble Supreme Court categorically held that theletter dated 22.03.2018 was only a show cause notice and not ademand. Further, it granted only a limited relief to theDepartment to hold the lien until they conclude the issue, withliberty to the respondent/assessee to approach the AppellateAuthority for direction to release the monies and fixeddeposits. 6.3. Pursuant to the directions of the Hon'ble SupremeCourt, the respondent/assessee filed an application for stay ofdemand and lifting the lien on the fixed deposits. Instead ofdisposing the said application, the appellate authority issimply kept the same as pending, without any consideration,which compelled the respondent/assessee to invoke the writjurisdiction and therefore, the learned Judge has rightlyordered for release of deposits, even in the event of a negativeorder by the CIT(A) having regard to the taxes that are alreadypaid by the respondent. 6.4. According to the respondent, the department holdsmoneys in excess of 20% of the disputed demand, consideringpayment in cash of Rs.495 crores and deposit of tax deducted atsource at Rs.898 crores aggregating to Rs.1,393 crores. The factthat the demand was very huge, could not be a factor in seekingto hold on to almost 80% of the demand as security. The lien ofthe department on the fixed deposits continues for about fouryears, as a consequence of which, the respondent/assessee has nouse of the moneys. 6.5. The CBDT Instruction No.1914 dated 21.03.1996 asamended on 29.02.2016 and 31.07.2017 specifically stipulatesthat pending disposal of appeal by the CIT(A), payment of only20% of the outstanding demand can be insisted upon and thebalance demand be stayed until such time. Further, the said 6.5. The CBDT Instruction No.1914 dated 21.03.1996 asamended on 29.02.2016 and 31.07.2017 specifically stipulatesthat pending disposal of appeal by the CIT(A), payment of only20% of the outstanding demand can be insisted upon and thebalance demand be stayed until such time. Further, the said https://hcservices.ecourts.gov.in/hcservices/ memorandum does not authorise/mandate furnishing of any securityin lieu of balance 80% of the demand. 6.6. The respondent is a high tax paying company, directlyand indirectly to the Exchequer year after year and they aresubstantial net worth and assets in India, adequate to meet anydemand that may eventually devolve on them after disposal of theappeal by the CIT(A) / ITAT / High court. Therefore, according to the learned senior counsel, takingnote of all the factors, the learned Judge has correctly passedthe order impugned herein and therefore, direction may be issuedto the department to lift the lien on the fixed deposits. 7.This court has carefully considered the submissions madeon either side and meticulously perused the documents enclosedin the typed set of papers. 8. Concededly, during the financial year 2016-17, therespondent/assessee had purchased its own shares under a schemeof arrangement and compromise approved by this court on thecompany side, under sections 391 to 393 of the companies Act,1956 vide its order dated 18.04.2016. 9. According to the respondent, the consideration paid bythem for the purchase of its own shares was subject to tax ascapital gains under section 46A of the Act in the hands of theshareholders and a sum of Rs.898.01 crores was remitted by themas withholding tax on behalf of its shareholders. Whereas, it isthe stand of the appellants that the consideration so paid wasout of the reserves/accumulated profits and hence, therespondent was required to pay Dividend Distribution Tax (DDT)as per the provisions of section 115-O r/w sections 2(22)(d)/2(22)(a) of the Act and accordingly, issued the communicationdated 22.03.2018 to the respondent. The operative portion of thesaid communication is quoted below for ready reference: “18.Thus, the payments made to theshareholders under purchase of shares through thescheme of 'arrangements and compromise' is adividend, within the meaning of section 2(22)(d)/2(22)(a) of the Act, requiring to remit the taxesinto the government account u/s.115 O of the Act.Further, since the company has failed to remit thetaxes within the stipulated period, the company is'deemed to be an assessee in default' u/s.115-Q ofthe Act. Therefore the assessee company is requiredto remit the taxes (calculate @ 15% of thetotal payments of Rs.19415,62,77,269/- to theshareholders and surcharge etc. as per the Act)along with the interest payable u/s 115-P of the Act, immediately, failing which the department willproceed with the collection and recovery of thetaxes, including coercive steps, as per theprovisions of the Act”. 10. It is further revealed from the records that theaforesaid communication dated 22.03.2018 was put to challenge bythe respondent/assessee by filing W.P.No.7354 of 2018, wherein,an interim order was passed on 03.04.2018, which reads as under: “12. Thus, considering the facts andcircumstances of the case, there will be an order ofinterim stay of the impugned proceedings subject tothe condition that the petitioner pays 15% of thetax demanded and furnishes a Bank Guarantee orsecurity by way of Fixed Deposits for the remainingtaxes (only), to be paid. For the purpose ofcomplying with the above condition, the attachmentof the Bank account in JP Morgan Chase Bank N.A,J.P.Morgan Tower, 8[th] floor, Off C.S.T.Road, Kalina,Santacruz East, Mumbai – 400 098 shall stand liftedforthwith. However, the attachment in respect ofother Bank accounts viz., (a) State Bank of India, CAG Branch,Chennai. “12. Thus, considering the facts andcircumstances of the case, there will be an order ofinterim stay of the impugned proceedings subject tothe condition that the petitioner pays 15% of thetax demanded and furnishes a Bank Guarantee orsecurity by way of Fixed Deposits for the remainingtaxes (only), to be paid. For the purpose ofcomplying with the above condition, the attachmentof the Bank account in JP Morgan Chase Bank N.A,J.P.Morgan Tower, 8[th] floor, Off C.S.T.Road, Kalina,Santacruz East, Mumbai – 400 098 shall stand liftedforthwith. However, the attachment in respect ofother Bank accounts viz., (a) State Bank of India, CAG Branch,Chennai. (b) Deutsche Bank, Ground Floor, Door No.4 &4A Western Tower, Sunny Side, Shafi MohammedRoad, Thousand Lights, Chennai – 600 006. (c) Corporation Bank, Corporate BankingBranch, 38 & 39 whites Road, Chennai – 600 014. (d) City Bank N.A, No.163, Anna Salai,Chennai – 600 002. (e) HDFC Bank, No.115, Dr.RadhakrishnanSalai, 9[th] Floor, Mylapore, Chennai – 600 004. shall continue till the compliance of theabove direction. Similarly, the attachment of thenine Bank deposits viz., (i) HDFC Limited,(ii) HDFC Limited, (iii) HDFC Limited, (iv) HDFCLimited, (v) HDFC Limited, (vi) HDFC Limited, (vii)Bajaj Finance Limited, (viii) Bajaj FinanceLimited, (ix) Bajaj Finance Limited shall alsocontinue subject to the lien being created for theremaining amount of taxes. The remittance of 15% of the tax demanded shall beretained in a separate account and shall abide bythe orders to be passed in the writ petition.” 11. It is an admitted fact that in complying with theaforesaid order dated 03.04.2018, the respondent/assessee paid asum of Rs.495 crores by way of cash and made a fixed deposits tothe tune of Rs.2806 crores. Subsequently, by order dated25.06.2019, the main writ petition bearing No.7354 of 2018 wasdismissed, on the ground of availability of alternative appealremedy before the appellate authority and the operative portionof the same is usefully extracted below: “32. For the foregoing reasons, the Writpetition fails and the same is dismissed. However,liberty is given to the petitioner to prefer anappeal within a period of four weeks from today.If such an appeal is filed within the stipulatedtime, the Appellate Authority shall dispose of thesame on merits, after providing sufficientopportunity of hearing to the petitioner. It isneedless to mention that the above observationshave been made only to reach a prima facieconclusion. 33. It is to be noted that the petitioner incompliance of the order of this Court, dated03.04.2018, in W.M.P.No.9135 of 2018 in W.P.No.7354of 2018, deposited Rs.495 Crores. Since this Writpetition is dismissed, directing the petitioner toavail the appeal remedy, the Appellate Authorityshall take into account the amount deposited inpursuance of the order referred supra, whileentertaining the appeal. With regard to FixedDeposits, the respondent shall maintain staus-quoas on date for a period of two weeks. There is noorder as to costs. Consequently, connectedmiscellaneous petition is closed.” 12. Challenging the aforesaid order passed in WP.No.7354 of2018, the respondent/assessee carried the matter on appeal viz.,W.A.No.2063 of 2019, which, by judgment dated 06.09.2019, waspartly allowed, in the following terms: “13.We also do not find any error in the orderof the learned single Judge with respect to thedeposit made during the pendency of the interimorder as erroneous. It is only an interimarrangement directed to be made pending the appeal.In such view of the matter, while upholding the 12. Challenging the aforesaid order passed in WP.No.7354 of2018, the respondent/assessee carried the matter on appeal viz.,W.A.No.2063 of 2019, which, by judgment dated 06.09.2019, waspartly allowed, in the following terms: “13.We also do not find any error in the orderof the learned single Judge with respect to thedeposit made during the pendency of the interimorder as erroneous. It is only an interimarrangement directed to be made pending the appeal.In such view of the matter, while upholding the direction of the learned single Judge with respectto the deposit and the liberty granted to file anappeal are accordingly upheld. However, thefindings rendered on the nature of transaction andthe scope under Section 115-O of the Act areaccordingly set aside. The issue as to whether theimpugned order should be preceded by a procedureinvolving adjudication and the requirement ofviolation of principles of natural justice are alsoleft open to be decided in the appeal.Accordingly, the writ appeal stands allowed in partas indicated. As granted by the learned singleJudge, we are inclined to grant a period of fourweeks from the date of receipt of a copy of thisorder to file an appeal before the AppellateAuthority. No costs. As and when such an appeal isfiled, the same will have to be disposed of withina period of eight weeks thereafter. Consequently,connected miscellaneous petition is closed.” 13. By order dated 12.09.2019, the first three sentences ofthe aforesaid order were replaced to the extent as indicatedbelow: “We also do not find any error in the order ofthe learned single Judge with respect to the interimorder as erroneous. It is only an interimarrangement directed to be made pending thestatutory appeal. In such view of the matter, whileupholding the direction of the learned single Judgewith respect to the interim order and the libertygranted to file an appeal are accordingly upheld.” 14. Aggrieved over the order so passed by the co-ordinatebench of this court in the writ appeal, the respondent/assesseewent on further appeal before the Hon'ble Supreme Court byfiling CA.No.1992 of 2020. After analysing the facts andcircumstances of the case and also taking note of thesubmissions made by the learned counsel on either side, theHon'ble Supreme Court by order dated 04.03.2020, disposed of thesaid appeal with certain terms and observations, the relevantpassage of which is profitably reproduced below: “16.On the issue whether communication dated22.03.2018 was in the nature of determination of theliability, both the learned counsel were heard atconsiderable length, at the end of which it wasagreed by Mr. Zoheb Hossain, learned Advocate forthe Department, that the communication dated22.03.2018 could be treated as a show cause notice and the Department be permitted to conclude theissue within a reasonable time, provided the interimorder passed by the Single Judge of the High Courton 03.04.2018 was continued. The course suggestedby the learned counsel for the Department wasacceptable to the learned Senior Counsel for theappellant. 17. It was, therefore, suggested that theappellant may file an affidavit of undertaking towithdraw the proceedings initiated by it before theAAR and the Department may also file an appropriateaffidavit stating that it was willing to treat thecommunication dated 22.03.2018 as a show causenotice. An appropriate affidavit of undertaking towithdraw the proceedings initiated before the AARhas since then been filed by the appellant. Anaffidavit has also been filed on behalf of theDepartment stating:- “The communication dated 22.03.2018 may betreated as a show cause notice and theassessee will be given an opportunity of beingheard and a fresh order will be passed withintwo months from the date of the judgment ofthis Hon'ble Court.” 17. It was, therefore, suggested that theappellant may file an affidavit of undertaking towithdraw the proceedings initiated by it before theAAR and the Department may also file an appropriateaffidavit stating that it was willing to treat thecommunication dated 22.03.2018 as a show causenotice. An appropriate affidavit of undertaking towithdraw the proceedings initiated before the AARhas since then been filed by the appellant. Anaffidavit has also been filed on behalf of theDepartment stating:- “The communication dated 22.03.2018 may betreated as a show cause notice and theassessee will be given an opportunity of beingheard and a fresh order will be passed withintwo months from the date of the judgment ofthis Hon'ble Court.” 18. In the peculiar facts and circumstances ofthe present case, while disposing of this Appeal,we direct:- a) The communication dated 22.03.2018 shall betreated as a show cause notice calling upon theappellant to respond with regard to the aspectsadverted to in said communication; b) The appellant shall be entitled to put inits reply and place such material, on which itseeks to place reliance, within 10 days from today; c) The appellant shall thereafter be affordedoral hearing in the matter; d) The matter shall thereafter be decided onmerits by the concerned authority within two monthsfrom today; e) Pending such consideration, as also tillthe period to prefer an appeal from the decision onmerits is not over, the interim order passed by the https://hcservices.ecourts.gov.in/hcservices/ Single Judge of the High Court on 03.04.2018 and asaffirmed by this Court vide its orders dated14.10.2019, shall continue to be in operation; and f) The amount of Rs.495,24,73,287/- depositedtowards payment of tax and the amount ofRs.2806,40,15,294/- which stands deposited andinvested in the form of Fixed Deposit Receiptsshall be subject to the decision to be taken by theconcerned Authority on merits or to such directionsas may be issued by the Appellate Authority.” 15. Thereafter, the first appellant passed the order dated29.04.2020 under section 115-O of the Act, which, according tothe appellants, is in accordance with the aforesaid order of theHon'ble Supreme Court. For easy reference, paragraph 10.21 ofthe same is extracted hereunder: “10.21. The assessee company is hereby requiredto pay an amount of Rs.3301,64,88,581 as tax underSection 115-Q calculated @ 15% along with surchargeand cess, on the amount of Rs.19080,26,38,595 paidto the shareholders out of accumulated profits, andinterest amounting to Rs.1551,77,49,633 u/s.115-Pcalculated @ 1% for 47 months, both aggregating toRs.4853,42,38,214...”. 16. Upon receipt of the aforesaid order dated 29.04.2020passed by the first appellant, the respondent/assessee moved anappeal along with stay petition on 23.06.2020 before theappellate authority. Subsequently, they also filed directionapplication to lift the lien on the fixed deposits. However, noorder was passed by the appellate authority, till date. Findingno other option, the respondent/assessee approached this courtby filing W.P.No.1360 of 2022, invoking Article 226 of theConstitution of India. The learned Judge disposed of the saidwrit petition, by the order dated 01.02.2022, which ischallenged by the appellants/Revenue in this writ appeal. Thelearned Judge taking note of the totality of the facts andattending circumstances of the case, passed the order impugnedherein, with regard to recovery and release of lien on theassets deposited by the respondent/assessee. 17. Though the learned Additional Solicitor General ofIndia appearing for the appellants raised various contentionsjustifying the demand raised by the department as well asassailing the order passed by the learned Judge, he ultimatelysubmitted that the department is abiding by any direction thatmay be passed by the CIT(A). Admittedly, the CIT(A) did not passany order so far in the miscellaneous applications nor take the https://hcservices.ecourts.gov.in/hcservices/ appeal filed by the respondent/assessee for final hearing. It isalso not in dispute that the department holds the moneys ofRs.898 crores by way of TDS and Rs.495 crores as per the orderof this court dated 03.04.2018, which are more than 20% of thedisputed demand, besides creating lien on the fixed deposits ofRs.2806 crores made by way of security, as per the order of thiscourt dated 03.04.2018, which continues for more than four yearswithout any utilisation and as a consequence of the same, therespondent/assessee is unable to run its business and pay salaryto its employees. 18. At this juncture, it is pertinent to refer to adecision of the Delhi High Court in Eko India Financial ServicePrivate Limited v. ACIT [283 Taxman 584 (Del)], wherein, insimilar circumstances, it was held that “the order under section245 for adjustments of refunds did not give any special/particular reason as to why any amount in excess of 20 per centof outstanding demand was recovered from the assessee and thedepartment was entitled to seek pre-deposit of only 20 per centof disputed demand and hence, the assessing officer was directedto refund the amount adjusted in excess of 20 per cent ofdisputed demand”. 19. This court is of the view that the issue involvedherein has already been decided by the Hon'ble Apex Court. It isto be noted that the Hon'ble Supreme Court in the appeal filedby the respondent/assessee, by order dated 04.03.2020, hascategorically held that the communication dated 22.03.2018should be treated as show cause notice; and the amount ofRs.495,24,73,287/- deposited towards payment of tax and theamount of Rs.2806,40,15,294/- made in the form of fixed depositreceipts, should be subject to the decision to be taken by theconcerned authority or to such directions as may be issued bythe Appellate Authority. In the light of the said directionsissued by the Hon'ble Supreme Court, it is open to the authorityconcerned to pass appropriate order, which has already beenpassed, that is under challenge before the appellate authorityalong with direction petition, to pass any order, with regard tothe deposits made by the respondent/assessee, but the appellateauthority is yet to do so, even though the respondent/assesseeapproached him in accordance with the statutes. The grievancesexpressed on the side of the respondent/assessee as regards theholding of such huge amounts by the department, cannot beslightly brushed aside. 20. Thus, for the discussions held above, this court, inorder to protect the interest of the revenue as well as theassessee and sub-serve the interests of justice, issues thefollowing directions: (i) The respondent/assessee shall file an application forstay, if not filed earlier, before the CIT(A) within a period oftwo weeks from the date of receipt of a copy of this judgment; (ii) On filing of such an application, within a period offour weeks therefrom, the CIT(A) shall take up the same and passappropriate orders, with respect to stay of the demand raised asdeems it fit, after providing due opportunity of hearing to bothsides, and thereafter, on compliance, pass appropriate orders,on the direction petition said to have been pending, so as tolift the lien as regards the balance deposits to the respondent/assessee, as directed by the Hon'ble Apex Court by order dated04.03.2020. (i) The respondent/assessee shall file an application forstay, if not filed earlier, before the CIT(A) within a period oftwo weeks from the date of receipt of a copy of this judgment; (ii) On filing of such an application, within a period offour weeks therefrom, the CIT(A) shall take up the same and passappropriate orders, with respect to stay of the demand raised asdeems it fit, after providing due opportunity of hearing to bothsides, and thereafter, on compliance, pass appropriate orders,on the direction petition said to have been pending, so as tolift the lien as regards the balance deposits to the respondent/assessee, as directed by the Hon'ble Apex Court by order dated04.03.2020. 21. Accordingly, the order of the learned Judge is modifiedand this writ appeal stands disposed of. No costs. Consequently,connected miscellaneous petition is closed. Sd/-Assistant Registrar(CS V) //True Copy// Sub Assistant Registrar dhk/gba To 1.The Commissioner of Income Tax (Appeals)–18,3[rd] Floor, Investigation Building,No.46, (Old No.108), Mahatma Gandhi Road,Nungambakkam, Chennai - 600 034.2.The Assistant Commissioner of Income Tax,Circle - 1, Large Tax Payer Unit,7[th] Floor, Wanaparthy Block,Aayakar Bhawan, Nungambakkam, Chennai – 600 034. 3.The Assistant Commissioner of Income Tax,Central Circle - 1(1),3[rd] Floor, Investigation Building,46 (Old No.108), Mahatma Gandhi Road,Nungambakkam, Chennai – 600 034. 4.The Principal Commissioner of Income Tax,Central Circle - 1,3[rd] Floor, Investigation Building,46 (Old No.108), Mahatma Gandhi Road,Nungambakkam, Chennai – 600 034. +1cc to Mr.A.P.Srinivas, SSC for Income Tax, S.R.No.20294 W.A.NO.457 OF 2022 NRJK(CO)PBS/28/04/2022