Wp/12690/2015 Of Vodafone South Limited v. The Deputy Commissioner Of Income Tax

IN THR HIGH COURT OF KARNATAKA AT BBNGALURU| DATED THIS THE 26[th]DAY OF MARCH, 20109. BEREROR THE HON’BLE MR.JUSTICE ARAVIND KUMAR. (WRIT PETITION Nos.12690/2015 and 126091 /2015 IT) BETWEEN: VODAFONE SOUTH LIMITED|(FORMERLY KNOWN ASVODAFONE SOUTH ESSAR LIMITED)MARUTHITINFOTECH CENTRE,NO.11/1, 12/1,|KORAMANGALAAMAR JYOTI LAYOUT,BENGALURU-560 O71 RBP. BY SENIOR MANAGERSRI ANUJ KUMAR SINGH —. COMMON PHRTITIONBR| (BY DR. ABHISHEK MANU SINGHVI, SR. COUNSEL,SRI. KAVIN GULATI, SR. COUNSEL;SRI. KAVIN GULATI, SR. COUNSEL; SRI M.V. SESHACHALA, SR.COUNSEL ALONG WITH | SRI RUBI SINGH AHUJA, ADVOCATEoRI. ARAVIND CHAVAN; SRI LZAFEER AHMAD,ADVOCATES) AND: 1.THERE DEPUTY COMMISSIONEROF INCOME TAX.INTERNATIONAL TAXATION)CIRCLE-I(1)NO.14/3A, 6 FLOOR,RASHTROTHANA BHAVANNRUPATHUNGA ROADBENGALURU-560 OO1.. 2 |DIRBCTOR OF [INCOME TAXINTERNATIONAL TAXATION.NO.14/3A, 6 FLOOR,RASHTROTHANA BHAVANINTERNATIONAL TAXATION.NO.14/3A, 6 FLOOR,RASHTROTHANA BHAVAN NRUPATHUNGA ROADBBRBNGALURU-560 OO1BBRBNGALURU-560 OO1 3.|THR COMMISSIONBR OF INCOME TAX (APPEALS)-12, NO.14/3A, —NO.14/3A, — RASHTROTHANA BHAVAN 5 FLOOR,NRUPATHUNGA ROADBBRBNGALURU-560 OO1NRUPATHUNGA ROADBBRBNGALURU-560 OO1 .... KLOMMON RESPONDEN (BY SRI K.V. ARAVIND, ADVOCATE) THESE WRIT PETITIONS ARE FILED UNDER ARTICLE226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYINGTO QUASH THE ORDERS DATED 23.03.2015 & 24.03.2015PASSEHKD BY THE R-3 & R-1 RESPECTIVELY VIDE ANNBX-& T RESPBRECTIVELY FOR THE ASSESSMENT YEARS 20114 AND 2014-15. THESE PETITIONS COMING ON FOR ORDERS THIS|DAY, THE COURT MADE THE FOLLOWING: ORDER Heard Dr Abhishek Manu Singhvi, Learned SeniorCounsel appearing on behalf of petitioner and Sri|K.V.Aravind, Learned Panel Counsel who has accepted|notice on behalf of respondents. By consent, these writ| O| petitions are taken up for final disposal. Perused the|Case Papec®rs. 2Petitioner is seeking for quashing of the.order dated 23.03.2015 (Annexure-S in both petitions)|passed by third respondent and order dated 24.03.2015(Annexure-T1nNbothpetitions)passedby|firstrespondent. 3. For the assessment years 2013-14 and 2014-15, an order came to be passed by first respondent on 18.02.2015 under Section 201(1) and interest came to|be levied under Section 201(1A) of the Income Tax Act,1961 (‘Act’ for short) by treating the petitioner as an|‘assessee in default-and raising a demand thereunder. |Being aggrieved by the said assessment orders, assesseehas preferred appeals before CIT(Appeals) along with anapplication for stay of the tax and interest demanded.simultaneously, petitioner also moved an application|under Section 220(6) of the Act for stay of the demand|before the Assessing Officer. These two Authorities by| 4. theimpugnedorders referredTO|hereinabove,considered the prayer of the petitioner and rejected the|applications for stay. Being aggrieved by these two|impugned orders, petitioner — assessee is before this|Court. 4Though learned Senior Counsel appearing|for petitioner has made a valiant attempt to persuade|this Court to examine the issue of chargeability of tax,|this Court refrains from expressing any opinion on the|said issue for the simple reason that jurisdictional|appellate authority is now seized of the matter or in|other words appellate authority being the fact finding|authority is examining the correctness or otherwise of|the assessement order dated 18.02.2015- Annexurec-A. sri K.V.Aravind, learned panel counsel appearing for|respondents has also made attempts to sustain the|assessment orders passed by first respondent and the|demands raised pursuant to same. 5As already observed herein above, without|soing into merits of the rival contentions raised, this|Court is of the considered view that it would suffice and|meet ends of justice if the petitioner is put on terms anddirected to pursue its grievance before appellate|authority namely, CIT (Appeals). 5As already observed herein above, without|soing into merits of the rival contentions raised, this|Court is of the considered view that it would suffice and|meet ends of justice if the petitioner is put on terms anddirected to pursue its grievance before appellate|authority namely, CIT (Appeals). 6.Learned Sr.Counsel Dr. Abhishek Manu!singhvi has also brought to the notice of this Court that|under similar circumstances, a Division Bench of this|Court while examining the correctness or otherwise ofthe order passed by jurisdictional Tribunal had put the|parties on terms and directed the parties to get their|erievance redressed by the jurisdictional Tribunal. ByKeeping in mind the directions that came to be issued|by Division Bench of this Court in W.A.No.904-908/2014 and connected matters disposed of on|10.04.2014(Annexure-P)andalsotaking1ntoconsideration that CIT (Appeals) has by a cryptic order|dated 23.03.2015- Annexure-S (in both petitions)| refused to entertain the claim of petitioner for grant ofstay which is contrary to the statutory provision|namely, Section 2951(1)(c) of the Act which enables theCIT (Appeals) to consider application of stay, said order|requires to be set aside and petitioner should be|relegated to appellate authority CIT (Appeals) by|restoring both appeal and application for being|adjudicated afresh. ToIn fact, Division Bench of this Court in|W.A.No.3397/2011, disposed of on 21.04.2011 has|Clearly held that though Section 246A of the Act does|not expressly confer the ClT(Appeals) power to grant|stay, it has been clearly held that inherent power to|erant or not to grant stay is conferred on him under|section 246A of the Act. In that view of the matter,|impugned order dated 23.3.2015 (Annexure S$ in bothpetitions) which has been passed by CIT (Appeals)|cannot be sustained particularly when no reasons are|assigned at all. Since, both appeal and application are| being restored to CIT (Appeal) for being disposed of on|merits within a timetrame. Interest of the revenue also|requires to be protected by putting the petitioner on|terms as this would meet the ends ofjustice. | 8.)In that view of the matter, I proceed to pass|the following: ORDER (1)Writ petitions are hereby allowed inpart.part. (2)Order dated 23.03.2019 (Annexure-Sin both petitions) passed by thirdrespondent is hereby set aside. '1)Applications filed by the petitionerbefore CIT (Appeals)-12 for stay whichis at Annexure-F in both the writ!petitions are restored to the file of CIT(Appeals)-12 (third respondent) forbeing adjudicated on merits along withthe appeal itself expeditiously, at any 8| rate within an outer limit of two'months from the date of receipt of copyof this order and subject to followingconditions: '$)Petitioner-assessee shall deposit|further a sum oft Rs.20 Crores onor before 31.03.2015 before first|respondent -Assessing Officer.further a sum oft Rs.20 Crores onor before 31.03.2015 before first|respondent -Assessing Officer. '8)Petitioner- assessee shall deposit|further sum of Rs.40. Croresbefore first respondent- Assessing.further sum of Rs.40. Croresbefore first respondent- Assessing. Officer on or betore 30.04.2015. 'B)For the balance amounts as)demanded under demand notice|dated 18.02.2015 (Annexure-C in|both writ petitions), petitioner,shall furnish Bank Guarantee/s |in favour of first respondent-|Assessing Officer on or _ befor30.04.2015andpetitioner 9| assessee shall ensure that Bank|Guarantee/s is/are Kept alive till|disposal of the appeal by the CIT'(Appeals)-12 and in the event of,petitioneraSS@S SE4Notsucceeding before CIT (Appeals),|firstrespondent-Assessing.Officer shall not invoke or revoke|said bank guarantee/s till the.expiry of the period for filing of|appeals or in other words, till theperiod provided for filing an|appeal under Section 253(3) of)the Act expires.| Officer on or betore 30.04.2015. 'B)For the balance amounts as)demanded under demand notice|dated 18.02.2015 (Annexure-C in|both writ petitions), petitioner,shall furnish Bank Guarantee/s |in favour of first respondent-|Assessing Officer on or _ befor30.04.2015andpetitioner 9| assessee shall ensure that Bank|Guarantee/s is/are Kept alive till|disposal of the appeal by the CIT'(Appeals)-12 and in the event of,petitioneraSS@S SE4Notsucceeding before CIT (Appeals),|firstrespondent-Assessing.Officer shall not invoke or revoke|said bank guarantee/s till the.expiry of the period for filing of|appeals or in other words, till theperiod provided for filing an|appeal under Section 253(3) of)the Act expires.| '0)In view of the above directions issued,|order passed by first respondent inexercise of the power under Section220(6) of the Act dated 24.03.2015(Annexure-T in both petitions) wouldnot survive and parties are at liberty to 10| work out their remedy before CIT(Appeals). (9)It is needless to state that in the eventof petitioner succeeding in the appeal,it would be at liberty to file necessaryapplication before the authorities forreturn of the bank guarantee/s andsame shall be considered by firstrespondent and appropriate orders bepassed in accordance with law. (6)sri K.V.Aravind, learned panel counsel,on instructions from respondent No.2who is present in Court submits thatin the event of petitioner succeeding inthe appeal, revenue would refund theamount of Rs.60 Crores with applicablerate of interest as provided under theAct within a period of two weeks fromthe date of expiry of the _ perioprovided for filing appeal under Section 11| 293(3) of the Act. His submission isplaced on record. ',)All contentions of both parties onmerits are left open and it is made clear that no opinion is expressed withregard to merits of the claim. Ordered accordingly. SrK.V.Aravind,learnedpanelcounsel1Spermitted to file memo of appearance within four weeks|from today. Sd/- JUDGE & ?