Wp/1321/2013 Of Nimbus Communications Ltd v. Additional Commissioner Of Income Tax, Range-11(1)

kambli IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1321 OF 2013 …. Nimbus Communications Ltd.Mumbai...Petitionerv/s.Additional Commissioner of Income-taxRange-11(1), Mumbai & ors....Respondents… Mr.S.E.Dastur, Senior Advocate i/b Mr.Atul K. Jasani for the petitioner.Mr.Sureshkumar for respondents. ... CORAM:MOHIT S. SHAH, C.J. & M.S.SANKLECHA, J.DATE :26 JULY 2013 P.C. In this writ petition under Article 226 of the Constitution, the petitioner has challenged two orders, dated 18 January 2013 and 5 April 2013 of ITAT, Mumbai on stay application in the petitioner's appeal pending before the ITAT challenging the final assessment order dated 20 November 2012 in respect of assessment year 2008-09. 2. By the said final assessment order, the petitioner's total income has been computed at Rs.104 crore and odd amount and demand raised of gross tax with surcharge and education charge at about Rs.35.40 crore and interest under section 234-B at approximately Rs.15.40 crores. When the petitioner moved the first stay application before the ITAT for stay of recovery of demand raised in the above final assessment order, by order dated 18 January 2013 the Tribunal granted partial stay in favour of the petitioner subject to the petitioner depositing Rs.10 crores in three installments as under:- (i)Rs.5 crore by 28 February 2013 (ii)Rs.2.5 crore by 15 March 2013 (iii)Rs.2.5 crore by 31 March 2013 The Tribunal also allowed the Assessing Officer to adjust the refund of Rs.6 crore approximately determined for the assessment year 2011-12 against the remaining demand for the assessment year 2008-09. 3.The petitioner made attempts to obtain finances for payment of the aforesaid amount of Rs.10 crores, but did not succeed in obtaining such finances. In the meantime, pursuant to the above order dated 18 January 2013, the Assessing Officer adjusted the refund of Rs.6.77 crore for the assessment year 2011-12 against the aforesaid demand in question. 4.The petitioner filed an application before the Tribunal praying for keeping the demand for the assessment year 2008-09 i.e. the demand in question, in abeyance till the disposal of the appeal pending before ITAT, on the ground that the petitioner could not succeed in procuring the funds. In any case, the petitioner deposited Rs.50 lacs towards the aforesaid tax amount kambli on 20 March 2013. By order dated 5 April 2013, the Tribunal has dismissed the said application holding that the same is not maintainable on the same set of facts as the first application was disposed of vide order dated 18 January 2013. 5.Respondent No.3 has issued impugned garnishee notices to various banks, in which accounts are held by the petitioner. The petitioner has accordingly moved this Court challenging the aforesaid orders dated 18 January 2013 and 5 April 2013 of ITAT and also for challenging the aforesaid garnishee notices issued by respondent No.3. 6.At the previous hearing, learned counsel for the petitioner tendered affidavit dated 16 July 2013 and submitted on the basis of averments made therein that the petitioner has already paid total tax of Rs.16,37,86,663/- towards the tax demand for the assessment year 2008-09 as under:- kambli 4wp-1321-13 7.Mr.Dastur, learned senior counsel for the petitioner, therefore, submits that the petitioner having effectively paid the aforesaid amount exceeding Rs.16 crore against the total tax liability of Rs.35.40 crore and interest of Rs.15.40 crore, the petitioner has paid such substantial sums that nothing further ought to be permitted to be recovered from the petitioner. 6.At the previous hearing, learned counsel for the petitioner tendered affidavit dated 16 July 2013 and submitted on the basis of averments made therein that the petitioner has already paid total tax of Rs.16,37,86,663/- towards the tax demand for the assessment year 2008-09 as under:- kambli 4wp-1321-13 7.Mr.Dastur, learned senior counsel for the petitioner, therefore, submits that the petitioner having effectively paid the aforesaid amount exceeding Rs.16 crore against the total tax liability of Rs.35.40 crore and interest of Rs.15.40 crore, the petitioner has paid such substantial sums that nothing further ought to be permitted to be recovered from the petitioner. 8.It is submitted that this is without prejudice to the petitioner's contention that the Tribunal ought not to have imposed any condition upon the petitioner in the facts and circumstances of the case, particularly when the petitioner has a strong prima facie case and the impugned final assessment order has no legs to stand as the Assessing Officer has not taken into consideration the letter dated 14 July 2007 (at Exh.E), which was the letter from the Honorary Secretary to the BCCI to the petitioner clearly stating that the number of matches was reduced in the concerned itinerary, and therefore the amount for which the bank guarantee was required to be furnished by the petitioner was substantially reduced to Rs.557 crore and odd amount as against the previous liability of Rs. 961 crore and odd amount. 9.Learned counsel has also added, at the time of hearing, that over and above payment of Rs.16,37,86,663/- as aforesaid, there is a further sum of Rs.1,25,88,848/- required to be adjusted against the petitioner's liabilities as the said amount is demanded by the Assessing Officer by way of interest under section 234-D (item No.57), which is relatable to the refund amount of Rs.5,68,60,198/- (item No.50), in the income-tax computation form at Exh.A to the further affidavit. Learned counsel, under instructions, states that the aforesaid refund of Rs.5,68,60,198/- has not been received by the assessee and therefore, there cannot be any question of charging interest under section 234-D on an amount which has not yet received by the assessee. 10.On the other hand, Mr.Sureshkumar, learned counsel for the revenue has vehemently opposed the petition and submitted that the petitioner ought to comply with the order dated 18 January 2013 and cannot be permitted to challenge the same, more particularly when the petitioner has acquiesced into the said order by giving letter dated 7 March 2013 agreeing to deposit the entire amount of Rs.10 crores by 31 March 2013. 11.Learned counsel for the parties state that hearing of the appeal before ITAT is now fixed on 30 July 2013. 12.Having heard learned counsel for parties, for the present, we are not inclined to go into merits of the petitioner's challenge to the order dated 18 January 2013 for more than one reason. kambli 13.In the first place the petitioner did not challenge the order dated 18 January 2013 immediately after the order was passed, but it is only when the petitioner's second application came to be dismissed by the Tribunal as not maintainable on 5 April 2013, that the petitioner filed the present petition. The second application was filed on the ground of hardship, in asmuch as, the petitioner could not obtain finances from banks to deposit the aforesaid amount of Rs.10 crores. 11.Learned counsel for the parties state that hearing of the appeal before ITAT is now fixed on 30 July 2013. 12.Having heard learned counsel for parties, for the present, we are not inclined to go into merits of the petitioner's challenge to the order dated 18 January 2013 for more than one reason. kambli 13.In the first place the petitioner did not challenge the order dated 18 January 2013 immediately after the order was passed, but it is only when the petitioner's second application came to be dismissed by the Tribunal as not maintainable on 5 April 2013, that the petitioner filed the present petition. The second application was filed on the ground of hardship, in asmuch as, the petitioner could not obtain finances from banks to deposit the aforesaid amount of Rs.10 crores. 14.Secondly, the refund payable to the petitioner to the extent of Rs.5,68,60,198 for the same assessment year i.e. 2008-09 has not yet been paid to the petitioner and the learned counsel for the revenue agrees that the refund amount has not yet been paid to the petitioner, though the final assessment order was passed on 20 November 2012. That would also prima facie mean that the revenue cannot levy interest of Rs.1,25,88,848 under section 234-D on the amount, which is not yet refunded to the petitioner. 15.Similarly, there is no dispute about the fact that the petitioner has subsequently, after the Tribunal granted conditional stay on 18 January 2013, deposited Rs.50 lacs on 20 March 2013. 16.Further, the petitioner has indicated in his tax returns for the assessment year 2008-09 that TDS was paid to the tune of Rs.8,60,64,680/- (Exh.W), but the Assessing Officer has given credit for only Rs.7,90,28,669/- leaving balance TDS of Rs.70,35,934/- uncredited. kambli 17.In view of the above, it would appear that the following amounts need to be adjusted against the petitioner's liability to pay Rs.10 crores under ITAT order dated 18 January 2013:- 18.Mr.Dastur, learned senior counsel for the petitioner further submits that the tax computation (at Exh.X) would indicate that the gross tax chargeable on total amount for the assessment year 2008-09 has been assessed at Rs.35.40 crore approximately and the interest under section 234-D is charged at Rs.15.40 crore approximately and, therefore, the substantial portion of the tax demand is relatable to interest to the extent of almost 30%. 19.At this stage, we are not inclined to go into all the detailed calculations, but we we find prima facie substance in the submission of the learned counsel for the petitioner that the petitioner has already paid substantial amount towards its liability to deposit Rs.10 crores under the Tribunal's order dated 18 January 2013. However, since we are not inclined to undertake the exercise of making a detailed calculation of interest liability of the petitioner at this stage and verification of unexplained TDS shortfall of R.70,35,930 ,without prejudice to rights and contentions of parties, we direct that upon the petitioner depositing the further sum of Rs.1 crore with respondent No.1, the petitioner be treated to have deposited Rs.10 crores as directed by ITAT in the order dated 18 January 2013. 20.At this stage, Mr.Dastur, learned senior counsel for the petitioner states, under instructions, that the petitioner undertakes to deposit the aforesaid amount of Rs. 1 crore with respondent No.1 by 5 August 2013 so that hearing before the Tribunal scheduled on 30 July 2013 may not be postponed on the ground of alleged non-compliance with the order dated 18 January 2013. We find request to be reasonable. 21.In the result, the writ petition is disposed of in terms of the following directions:- 20.At this stage, Mr.Dastur, learned senior counsel for the petitioner states, under instructions, that the petitioner undertakes to deposit the aforesaid amount of Rs. 1 crore with respondent No.1 by 5 August 2013 so that hearing before the Tribunal scheduled on 30 July 2013 may not be postponed on the ground of alleged non-compliance with the order dated 18 January 2013. We find request to be reasonable. 21.In the result, the writ petition is disposed of in terms of the following directions:- (i)The petitioner shall deposit with respondent No.1 a sum of Rs.1 crore and upon deposit of such amount, the petitioner shall be treated to have complied with the order dated 18 January 2013 of the ITAT in the appeal for the assessment year 2008-09. (ii)In view of the undertaking of the learned senior counsel for the petitioner that the aforesaid amount of Rs.1 crore shall be deposited with respondent No.1 by 5 August 2013, the Tribunal shall proceed to hear the appeal on 30 July 2013 on the basis that direction given in the order dated 18 January 2013 to deposit Rs.10 crores is complied with and that there shall accordingly be stay against recovery of the balance amount. (iii)It is clarified that we may not be treated to have gone into merits of the controversy, which is the subject matter of the appeal before the Tribunal, and this order is passed for the limited purpose of dealing with the petitioner's challenge to orders dated 18 January 2013 and 5 April 2013. (iv)It is also clarified that reference to various figures of tax and interest are merely for the purpose kambli of disposal of this writ petition. (v)It is also clarified that reference to the petitioner's claim that there is shortfall of Rs.70,35,934/- is subject to verification by the Assessing Officer, but hearing of appeal shall not be postponed on such ground. 22.In view of the above order and the undertaking being given by the learned senior counsel for the petitioner, garnishee notices issued by the respondent-authority on banks shall stand revoked and the respondent-authority shall inform the concerned banks immediately within twenty four hours from the date of receipt of copy of this order duly authenticated by the Court Associate. CHIEF JUSTICE (M.S.SANKLECHA, J.)