Wp/22376/2018 Of M/S.cholamandalam Ms v. The Income-Tax Appellate

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM : THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMAND THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR WRIT PETITION NOS.22376 TO 22379 OF 2018 &WP.SR.NOS.97605, 97610, 97615, 97620, , 97635, 97640, 97645, 97650, 97655, 97660,97665, 97670, 97675, 97680, 97685, 97690,117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534 AND 117538 OF 2018& ALL CONNECTED PENDING WMPS 1 M/s.Cholamandalam MS General Insurance Company Ltd. Rep. by its Chief Financial Officer Mr.Venugopalan S Dare House 2nd Floor No.2 N.S.C. Bose Road Chennai-600 001..Petitioners in W.P.Nos.22376, 22377/2018.W.P.Sr. No.s 97605, 97610, 97615, 97620, 97625, 97630, 97635, 97640/2018 1.M/s.Royal Sundaram General Insurance Company Ltd. Rep. by its Managing Director Mr.M.S.Sreedhar Sundaram Towers 45&46 Whites Road Chennai-600 002. 1.M/s.United India Insurance Co. Ltd.,Represented by its Authorised SignatoryMr.S.V.Venkatesh Murthy,24, Whites Road, https://hcservices.ecourts.gov.in/hcservices/ 2 The Deputy Commissioner of Income-Tax Large Tax Payer Unit 1775 Jawaharlal Nehru Inner Ring Road Anna Nagar Western Extension Chennai-600 101. 3 Ministry of Finance Department of Financial Services Rep. by its Secretary Jeevan Deep Building Parliament Street New Delhi-110 001...R3 in W.P.Nos.22379/2018 4 Insurance Regulatory and Development Authority of India Rep. by its Chairman Sy No.115/1 Financial District Nanakramguda Gachibowli Hyderabad-500 032...R3 in W.P.SR. Nos. 117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538/2018 & R4 in W.P.Nos.22379/2018.5 The Central Board of Direct Taxes Rep. by its Chairman 9th Floor Lok Nayak Bhawan Khan Market New Delhi-110 003...R4 in W.P.Nos.22379/2018 &..R5 in W.P.Nos.22379/2018.6 General Insurance Council Rep. by its Secretary General 5th Floor National Insurance Building 14 Jamshedji Tata Road Churchgate Mumbai-400 020....RR1 to 6 in W.P.Nos.22376/2018, 22377/2018, 22378/2018 & ..R6 in W.P.Nos.22379/2018..R5 in W.P.SR.Nos. 117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538 of 2018.7. The Assistant Commissioner of Income Tax Large Tax Payer Unit 1775 Jawaharlal Nehru Inner Ring Road Anna Nagar Western Extension Chennai-600 101...Respondents 1 to 7 in W.P.SR. Nos. 97605,97610, 97615, 97620, 97625, 97630, 97635, 97640, 97645, 97650, 97655, 97660, 97665, 97670, 97675, 97680, 97685, 97690 of 2018. 8.The Additional Commissioner of Income Tax, Large Taxpayer Unit, Jawarharlal Nehru inner Ring Road,Anna Nagar Westson Extn.,Chennai 101. ...R2 in WP.No.22379/2018 9.The Joint Commissioner of Income Tax, Company Range, Chennai-34, The Deputy Commissioner of Income Tax/ The Asst. Commissioner of Incoem Tax, Large Taxpayer Unit, Chennai 600 101 ..R2 in WP.SR.Nos.117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538 of 2018 10.The Assistant Commissioner of Income Tax, Corporate Circle -3(2), Chennai -34. 11.The Assistant Commissioner of Income Tax, Corporate Circle -3(III), Chennai -34. 12.The Dy. Commissioner of Income Tax/ Asst. Commissioner of Income Tax/ ITO(TDS), Large Taxpayer Unit, Chennai 101 ...Respondents 6 to 8 in WP.SR.Nos.117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538 of 2018 Prayer:Writ of certiorari or any other appropriate writ, orderor direction in the nature of writ to call for the records ofdated 28.08.2018 on the file of the Respondent NO.1 and quashthe same. ..R2 in WP.SR.Nos.117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538 of 2018 10.The Assistant Commissioner of Income Tax, Corporate Circle -3(2), Chennai -34. 11.The Assistant Commissioner of Income Tax, Corporate Circle -3(III), Chennai -34. 12.The Dy. Commissioner of Income Tax/ Asst. Commissioner of Income Tax/ ITO(TDS), Large Taxpayer Unit, Chennai 101 ...Respondents 6 to 8 in WP.SR.Nos.117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534, 117538 of 2018 Prayer:Writ of certiorari or any other appropriate writ, orderor direction in the nature of writ to call for the records ofdated 28.08.2018 on the file of the Respondent NO.1 and quashthe same. Prayer in W.P.No.22376, 22377, 22378 and 22379 of 2018:The Hon'ble High Court may be pleased to issue a Writ ofCertiorari or any other appropriate Writ, order or direction inthe nature of Writ to call for the records inITA.Nos.2276/chny/2014, and 2372/chny/2014 dated 31/07/2018 &ITA Nos.2310/chny/2014 and 2371/chny/2014 dated 06/08/2018respectively. Prayer in WP SR Nos.97605, 97610, 97615, 97620, 97625, 97630,97635,97640&97645,97650,97655,97660,97665,97670,97675,97680,97685,97690 of 2018&117014,117021,117029,117037,117044,117053,117517,117521,117525,117534 and 117538 of 2018. https://hcservices.ecourts.gov.in/hcservices/ The Hon'ble High Court may be pleased to issue a Writ ofCertiorari or any other appropriate writ, order or direction inthe nature of writ to call for the records in I.T.ANos.2146/Chny/2008,40/Chny/2009, 1620/Chny/2011,1759,Chny/2011,1621/Chny/2011,1676/chny/2011,1350 /chny/2013, 1366/chny/2013,dated 31/07/2018 and ITA Nos.1626/chny/2011,1666/chny/2011,1628/chny/2011,1668/chny/2011,1629/chny/2011,1669/chny/2011,1630/chny/2011,1670/chny/2011,1356/chny/2013,1367/chny/2013dated06/08/2018and1608/chny/2011,1610/chny/2011,1605/chny/2011,1149/chny/2016,1085/chny/2017,764/chny/2014,1607/chny/2011,30/chny/2014,364/chny/2016,1609/chny/2011, 1606/chny/2011 dated 28/08/2018 respectively onthe file of the Respondent No.1 and quash the same. For Petitioners in WP.Nos.22376 to22379 of 2018 & WP.SR.Nos.97605, 97610, 97615, 97620, 97625, 97630, 97635, 97640, 97645, 97650, 97655, 97660, 97665, 97670, 97675, 97680, 97685 and 97690 of 2018 :Mr.Vijay Narayan, SC forMr.Sandeep Bagmar For Petitioners in WP.SR.Nos.117014, 117021, 117029, 117037, 117044, 117053, 117517, 117521, 117525, 117534 and 117538 of 2018:Mr.M.V.Swaroop For the Department :Mrs.Hema Muralikrishnan, SSCFor the UOI & the CBDT : Mr.Venkatasamy Babu, SPCFor the IRDAI : Mr.M.B.GopalanFor the General Insurance Council:Mr.N.Vijaya Raghavan COMMON ORDER (Order of the Court was made by T.S.SIVAGNANAM,J) We have heard the learned counsel appearing for all theparties. 2. In these writ petitions, the petitioners are three innumber, namely Cholamandalam MS General Insurance CompanyLimited, Royal Sundaram General Insurance Company Limited andUnited India Insurance Company Limited. Four of the writpetitions filed by both the Cholamandalam MS General InsuranceCompany Limited and the Royal Sundaram General Insurance CompanyLimited were numbered as W.P.Nos.22376 to 22379 of 2018. Priorto the said petitions being numbered, Registry raised anobjection with regard to maintainability on the ground that asagainst the impugned orders passed by the Income Tax appellate https://hcservices.ecourts.gov.in/hcservices/ Tribunal (for brevity, the Tribunal), an appeal lies to thisCourt under Section 260A of the Income Tax Act, 1961 (for short,the Act) and the appeal has to be decided on a substantialquestion of law to be framed by the Division Bench. https://hcservices.ecourts.gov.in/hcservices/ Tribunal (for brevity, the Tribunal), an appeal lies to thisCourt under Section 260A of the Income Tax Act, 1961 (for short,the Act) and the appeal has to be decided on a substantialquestion of law to be framed by the Division Bench. 3. It is represented by the learned Senior Counsel appearingfor the Cholamandalam MS General Insurance Company Limited andthe Royal Sundaram General Insurance Company Limited that thesaid writ petitions were directed to be numbered on 28.8.2018subject to maintainability and by order dated 30.8.2018, anorder of interim stay has been granted for a period of fourweeks. 4. It is seen that subsequently, by order dated 17.9.2018,the interim order has been extended till 10.10.2018. Again10.10.2018, the Division Bench of this Court extended theinterim order till 31.10.2018. Further, again on 31.10.2018, thematters were adjourned by two weeks and the interim order hasbeen extended for a further period of two weeks. At this stage,the said writ petitions are listed before us. Along with thesaid writ petitions, the other writ petitions filed by the othertwo insurance companies are listed under the caption 'formaintainability'. 5. The Revenue objects to the maintainability of the writpetitions on the ground that an appeal lies to the DivisionBench of this Court under Section 260A of the Act and that nowrit is maintainable. 6. The reply by the learned Senior Counsel appearing forboth the Cholamandalam MS General Insurance Company Limited andthe Royal Sundaram General Insurance Company Limited is that theTribunal transgressed its jurisdiction and had given certainfindings, which have virtually made the IRDA (General Insurance– Reinsurance) Regulations, 2000 as nugatory. Furthermore,before rendering such a finding, the Tribunal ought to haveheard the Government of India, the Insurance Regulatory andDevelopment Authority of India, the Central Board of DirectTaxes and the General Insurance Council, which are proper andnecessary parties to be heard in the matters. According to thelearned Senior Counsel, the petitioners are justified in theiraction in approaching this Court by filing the said writpetitions and had impleaded them as respondents 3 to 6. 7. In our considered view, the issue regardingmaintainability of the writ petitions has become academic, asthe Cholamandalam MS General Insurance Company Limited has https://hcservices.ecourts.gov.in/hcservices/ already filed tax case appeals against the orders passed by theTribunal and those appeals are in the process of being numbered. 8. So far as the other insurance companies are concerned, itis stated that they are in the process of filing appeals. Theywould further state that the period of limitation is 120 daysand that the period is yet to be over. 9. It is settled legal principle that before the expiry ofappeal time, if recovery proceedings are initiated, it wouldvirtually render the appeal as infructuous. Therefore,considering the fact that the said writ petitions were directedto be numbered subject to maintainability and that there hasbeen an interim order in force since 30.8.2018, we are of theconsidered view that the petitioners should be protected againstthe recovery proceedings. 10. Hence, we restrain the respective Assessing Officers ofthe petitioners – insurance companies not to initiate anyrecovery proceedings pursuant to the orders passed by theTribunal, against which, the insurance companies have filedappeals/are in the process of filing appeals under Section 260Aof the Act. In the light of this order, there would be nonecessity to keep these writ petitions, which have been numberedand which are yet to be numbered, pending. Accordingly, all thewrit petitions are disposed of. No costs. Consequently, theconnected WMPs are closed. 10. Hence, we restrain the respective Assessing Officers ofthe petitioners – insurance companies not to initiate anyrecovery proceedings pursuant to the orders passed by theTribunal, against which, the insurance companies have filedappeals/are in the process of filing appeals under Section 260Aof the Act. In the light of this order, there would be nonecessity to keep these writ petitions, which have been numberedand which are yet to be numbered, pending. Accordingly, all thewrit petitions are disposed of. No costs. Consequently, theconnected WMPs are closed. 11. We make it clear that the parties, which were impleadedas respondents 3 to 6 in the writ petitions namely the Ministryof Finance, Department of Financial Services, the InsuranceRegulatory and Development Authority of India, the Central Boardof Direct Taxes and the General Insurance Council, will be suomotu impleaded by us in the tax case appeals, which are in theprocess of being numbered. 12. We find that both the Insurance Regulatory andDevelopment Authority of India and the General Insurance Councilhave already filed their respective counter, which will betaken as the stand of both of them in the tax case appeals, inwhich, we will implead them as party respondents. We direct thepetitioners herein to get their appeals numbered and they shallbe listed on 20.11.2018 for admission. Registry is furtherdirected to list the miscellaneous petitions wherever thepetitioners filed the same for dispensing with the production ofcertified copies of the orders passed by the Tribunal or where https://hcservices.ecourts.gov.in/hcservices/ they sought for accepting the cause title, etc. Registry is alsodirected to list the miscellaneous petitions well before20.11.2018. We also make it clear that the interim protectiongranted to the petitioners in the said writ petitions on30.8.2018, which we have extended to the other petitioners aswell, shall continue till we hear the stay petitions in the taxcase appeals, which are to be listed on 20.11.2018. We furthermake it clear that it is left open to the parties to agitate allthe issues, both factual and legal, in the tax case appeals. s/d- Assistant Registrar(CS VII) True Copy Sub-Assistant RegistrarRSTo1 The Income-Tax Appellate Tribunal 'A' Bench A-3 II Floor Rajaji Bhavan Besant Nagar Chennai-600 090.2 The Deputy Commissioner of Income-Tax Large Tax Payer Unit 1775 Jawaharlal Nehru Inner Ring Road Anna Nagar Western Extension Chennai-600 101.3 Ministry of Finance Department of Financial Services Rep. by its Secretary Jeevan Deep Building Parliament Street New Delhi-110 001.4 Insurance Regulatory and Development Authority of India Rep. by its Chairman Sy No.115/1 Financial District Nanakramguda Gachibowli Hyderabad-500 032.5 The Central Board of Direct Taxes Rep. by its Chairman 9th Floor Lok Nayak Bhawan Khan Market New Delhi-110 003.6 General Insurance Council Rep. by its Secretary General 5th Floor National Insurance Building 14 Jamshedji Tata Road Churchgate Mumbai-400 020.7. The Assistant Commissioner of Income Tax Large Tax Payer Unit 1775 Jawaharlal Nehru Inner Ring Road Anna Nagar Western Extension Chennai-600 101. 8. The Additional Commissioner of Income Tax,Large Tax Payer unit, 1775, Jawaharlal Nehru Inner ring Road, Anna Nagar Western Extn., Chennai 101. 9. The Joint Commissioner of Income Tax, Company Range, Chennai-34. 10. The Commissioner of Income Tax, Income Tax, Corporate Circle-3(2)Chennai-34. 11. The Assistant Commissioner of Income Tax, CorporationCircle-3(III), Chennai-34. 12. The Deputy Commissioner of Income Tax, AssistantCommissioner of Income Tax, ITO(TDS), Large Tax Payer UnitChennai-101. 13. The Section Officer, A.E. Section, High Court, Madras-104. 8. The Additional Commissioner of Income Tax,Large Tax Payer unit, 1775, Jawaharlal Nehru Inner ring Road, Anna Nagar Western Extn., Chennai 101. 9. The Joint Commissioner of Income Tax, Company Range, Chennai-34. 10. The Commissioner of Income Tax, Income Tax, Corporate Circle-3(2)Chennai-34. 11. The Assistant Commissioner of Income Tax, CorporationCircle-3(III), Chennai-34. 12. The Deputy Commissioner of Income Tax, AssistantCommissioner of Income Tax, ITO(TDS), Large Tax Payer UnitChennai-101. 13. The Section Officer, A.E. Section, High Court, Madras-104. 14. The Section Officer, Judicial Section, High Court (for posting the Tax Case Appeals and M.P.on 20.11.2018 as perthe direction of this court). + 1 cc to Mr. Hemamuralikrishnan, Advocate SR.77194+ 2 ccs to Mr. Sandeepbagmar, Advocate Sr.777249, 77250+ 4 ccs to Mr. Venkataswamy Babu, Advocate Sr.77273, 77274,77272, 77271 WP.No.22376 of 2018etc. cases RGN, VBA(CO)SP(15/11/2018)