Wp/55578/2017 Of Google India Private Limited v. The Deputy Commissioner Of Income Tax

L IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 13 DAY OF DECEMBER 2701/7 BEFORE. THE HON'BLE Mrs. JUSTICE B.V.NAGARATHNA 'WRIT PETITION No.55578/2017 (1IT) C/w. WRIT PETITION Nos.555/79/2017, 55580/201 '& 55606/2017 (1IT) Between Google India Private Limited,No.3, RMZ Infinity, Tower E, ;[6<]Floor, Old Madras Road,Bengaluru-560 016,Represented by its Authorised |Signatory Ms.Gitanjlii Duggal. .. Petitioner(Common in all tnePetitions) ( By Sri Deepak Chopra, Advocate ) And 1)The Deputy Commissioner of Income Tax,Circle-1(1), 2[12]Floor, |BMTC Building, 80 Feet Road,Koramangala,Bengaluru-560 O95. 2.The Commissioner of Income Tax -III,BMTC Complex, BMTC Complex, 2 80 Feet Road, Koramangala, Bengaluru-560 095. 3.Citipank NA506-507, Level 5506-507, Level 5 Prestige Meridian 2,#30, M.G.Road, Bengaluru-560 OO1... Respondents|(common in WP.Nos.55578, 55579& 55580 of 2017)| ( By Sri K.V.Aravind, Sr.Standing Counsel!For R-1 & R-2 ).For R-1 & R-2 ). In W.P.No.55606/ 201 1)The Deputy Commissioner of Income Tax, Circle-1(1), 2[12]Floor, | BMTC Building, 80 Feet Road, Koramangala, Bengaluru-560 O95. 2.Tne Commissioner of Income Tax —III,BMTC Complex, BMTC Complex, 80 Feet Road, Koramangala,Bengaluru-560 O95.Bengaluru-560 O95. 3.Citipank NA. 506-507, Level 5Prestige Meridian 2,#30, M.G.Road,Bengaluru-560 OO1. Represented by Branch Manager. .. Respondents| ( By Sri K.V.Aravind, Sr.Standing Counsel!For R-1 & R-2 ).For R-1 & R-2 ). Writ Petition No.55578/2017 is filed under Articles 226& 227 of the Constitution of India praying to quash the orderof tne Tribunal dated 8.12.2017, in Stay Petition for)assessment year 2009-10 vide Annexure-A and to direct theR-1 and 2 to not enforce the balance demand ofINR.51,47,23,190/- (Rupees Fiftyone crores fortyseven lakhs.twentythree tnousand one hnundred and ninety only) inrespect of the Assessment Year 2009-10, until disposal ofappeal pending before the Tribunal for A.Y.2009-10.. Writ Petition No.55579/201/7 is filed under Articles 226& 227 of the Constitution of India praying to quash the order|of the Tribunal dated 8.12.2017, in Stay Petition forassessment year 2010-11 vide Annexure-A and to direct theR-1 and 2 to not enforce tne palance demand ofINR.79,27,89,430/- (Rupees Seventynine crores twentysevenlakns eightynine thousand four nNundred and thirty only) in.respect of the Assessment Year 2010-11, until disposal of|appeal pending before the Tribunal for A.Y.2010-11.. Writ Petition No.55580/201/7 is filed under Articles 226& 227 of the Constitution of India praying to quash the orderof.the.Tribunal|dated8.12.201/7,In,Stay.Petition No.273/Bang/2017InITA.No.559/Bang/2016,for.assessment year 2011-12 vide Annexure-A and to direct theR-1 and 2 to not enforce the balance demand ofINR.114,37,82,276/- (Rupees One hundred and fourteen.crores, thirtyseven lakns eightytwo thousand two hundred|and seventysix only) in respect of the Assessment Year|2011-12,untildisposalof|appealbearingITA.No.559/Bang/2016, pending before the Tribunal forA.Y.2011-12. Writ Petition No.55606/201/7 is filed under Articles 226& 227 of the Constitution of India praying to quash the orderof the Tribunal dated 8.12.2017, in Stay Petition forassessment year 2012-13 vide Annexure-A and to direct theR-1 and 2 to not enforce tne palance demand ofINR.340,52,75,314/- (Rupees Three hundred and forty crores_ fiftytwo lakhs seventyfive thousand three hundred and.fourteen only) in respect of the Assessment Year 2012-13,until disposal of appeal pending before the Tribunal forA.Y.2Z012-13. These Writ Petitions coming on for preliminary hearing this day, the Court made the following : ORDER Though these writ petitions are listed for preliminaryhearing, with the consent of learned counsel for respective|parties, they have been connected and heard finally and are|disposed of by this common order. fiftytwo lakhs seventyfive thousand three hundred and.fourteen only) in respect of the Assessment Year 2012-13,until disposal of appeal pending before the Tribunal forA.Y.2Z012-13. These Writ Petitions coming on for preliminary hearing this day, the Court made the following : ORDER Though these writ petitions are listed for preliminaryhearing, with the consent of learned counsel for respective|parties, they have been connected and heard finally and are|disposed of by this common order. 2. These writ petitions have been filed by the—assessee, who is appellant before the Income Tax Appellate|Tribunal (hereinafter referred to as_ Tribunal’ for brevity),Bengaluru, assailing common order dated 8.12.201/7, passedin Stay Petition No.271/Bang/2017 in ITA.No.69/Bang/2014,Stay Petition No.272/Bang/2017 in ITA.No.68/Bang/2015,Stay Petition No.273/Bang/2017 in ITA.No.559/Bang/2016,|andStayPetition No.2/74/Bang/2017InITA.No.387/Bang/2017 respectively, for the Assessment. Years 2009-10 to 2012-13. A copy of the said order isproduced as Annexure- A’ to these writ petitions. ‘3. Petitioner is stated to pe aé Private LimitedCompany, incorporated under the provisions of the)Companies Act, 1956. As already noted above, beingaggrieved by tne common order dated 8.12.201/7, these writpetitions have been filed. The Tribunal by exercising|jurisdiction under second proviso to Section 254 (2A) of the)Income Tax Act, 1961 ( the Act’ for short), has directed thepetitioner-assessee to deposit 55% of the outstanding duesin respect of the aforesaid Assessment Years and to retainbalance of 20% in its account maintained in CITI Bank,M.G.Road Brancn, Bengaluru-560 001, while extending the.interim stay. Furtner, the Tribunal has stated that if theaforesaid conditions are complied with, the stay would be.extended for a period of three months from 8.12.201/7 (i.e.,.tne date of the impugned order), or till the disposal of the|appeals, whichever is earlier. 4. Sri Deepak Chopra, learned counsel for the}petitioner contended that while exercising jurisdiction underthe second proviso to Section 254 (2A) of the Act, theTribunal could not nave directed tne assessee to make'additional payments or retain balance in its account. He,Submitted tnat the said order if at all could have peen§passed in the first instance when the stay application was)considered on merits, but, thereafter, there cannot be any|modification witn regard to tne earlier order passed at thefirst instance at the time of extension of the stay order.Learned counsel would submit tnat tnere are innumerable.judgments of several High Courts across the country to this.effect. But, the Tridunal has mechanically followed the order|of this Court dated 22.11.2017, passed in Writ Petition)Nos.52358-52359/2017, which order was passed navingregard to the factual matrix that arose in that writ petition|and the same parameters could not have been applied|mecnanically in these petitions. Learned counsel drew my|attention to Para-2 of the impugned order and submitted that|for each of the Assessment Years 2009-10 to 2012-13, which are the subject matter of appeals before the Tribunal, thetotal demand and the amount paid nas been recorded and)the Tribunal irrespective of the quantum of demand and the.amount paid, nas issued a direction without having any co-relation to the dues and the amount paid. are the subject matter of appeals before the Tribunal, thetotal demand and the amount paid nas been recorded and)the Tribunal irrespective of the quantum of demand and the.amount paid, nas issued a direction without having any co-relation to the dues and the amount paid. 5. He furtner submitted that in so far as Assessment|Year 2012-13 is concerned, even when the stay was grantedat the first instance, the Tribunal directed that there snould|be a deposit of 50% of the total outstanding dues. But, this)Court in Writ Petition No.13601/2017, disposed of on)17.7.2017, reduced the deposit to be made from 50% to.30%, which order has been complied with and therefore, fortnat assessment year, the TridDunal could not have enhancedthe amount to be deposited or pass an order wnhicn wascontrary to the order passed by this Court. Learned counselfurther submitted that in so far as Assessment Year 2011-12|is concerned, wnen the extension of stay was granted, anadditional condition of deposit of Rs.15 Crores was made by.the Tribunal. Tne same ts. assailed in Writ Petition| No.13599/2017, and the additional condition for deposit ofRs.15 Crores at the time of extension of stay, nas beenstayed by this Court and the writ petition is pending. The)said writ petition pertains to ITA.No.559/2016. Learned)counsel for the petitioner, contended that this Court may.interfere in the impugned order and extend the stay grantedby the Tribunal without any conditions being imposed on thepetitioner. 6. Per contra, Sri K.V.Aravind, the learned Senior|Standing Counsel for the respondent-Department drew myattention to the judgment of the Hon’ble Supreme Court in>the case of ©Assistant Collector of Central Excise,|Chandan Nagar, West Bengal vs. Duniop India Ltd.,|and otners { (1985) 1 SCC 260}, to contend that theHon ble Supreme Court has stated therein that while grantingany interim order, Courts must be circumspect, particularly|when it concerns the revenue. He further submitted tnat§when thnis Court In tne earlier Writ Petition nad airected|payment of 55% and retaining balance of 20% as far as this very assessee is concerned, there can be no differentparameter imposed in these cases whnicn are in respect ofother assessment years and that the earlier order may be)followec. 7. By way of reply, learned counsel for the petitioner|submitted that naving regard to the fact that witn regard to)Assessment Years 2009-10 and 2010-11 are concerned,already there nas Deen payment of 50% of the dues made by|the assessee and the balance of 25% would be submitted|tnrougn Bank Guarantee, in which event, 75% of theoutstanding dues would be remitted. He submits tnat in so)far as Assessment Year 2011-12 is concerned, 30% of theamount nas been paid and that balance 20% would be paid|within a time frame to be granted by this Court and for)remaining 25%, Bank Guarantee would be furnished. But,|so far as Assessment Year 2012-13 is concerned, learnedcounsel empnasized and reiterated that when this Court nas|already permitted deposit of only 30% of the outstanding.dues in Writ Petition No.13601/2017, disposed of on) 10| 17.7.7201/(videAnnexure- D’COWrit|Petition No.55606/2017), the same parameters have to be followed.in these petitions. 8. Having neard the learned counsel for respective.parties, at the outset, the table containing the assessmentyear, total demand and tne amount paid, as indicated in|paragraph-2 of the impugned order, is extracted as under for|ready reference : From the above table, it is noted that as far as|Assessment Year 2009-10 and 2010-11 are concerned, theamounts paid are around 50% of the outstanding dues. As.far as Assessment Year 2011-12 is concerned, it is about30% of the outstanding dues, whereas, for the Assessment 10| 17.7.7201/(videAnnexure- D’COWrit|Petition No.55606/2017), the same parameters have to be followed.in these petitions. 8. Having neard the learned counsel for respective.parties, at the outset, the table containing the assessmentyear, total demand and tne amount paid, as indicated in|paragraph-2 of the impugned order, is extracted as under for|ready reference : From the above table, it is noted that as far as|Assessment Year 2009-10 and 2010-11 are concerned, theamounts paid are around 50% of the outstanding dues. As.far as Assessment Year 2011-12 is concerned, it is about30% of the outstanding dues, whereas, for the Assessment Year 2012-13 also, it is about 30% of the outstanding dues,naving regard to the order passed by this Court on17.7.2017. The Tribunal wnile passing the impugned order|and extending the stay, nas followed the earlier order passedby this Court in Writ Petition Nos.52358-52359/201/7,disposed of on 22.11.2017. In that writ petition, the facts|were that out of the demand of about Rs.129 Crores, 55% of|the outstanding demand being Rs.7O Crores, had already|been|paidvoluntarilybythepetitioner.In.the|circumstances, the petitioner was directed to retain balance|of 20% in its account maintained with CITI Bank, Bengaluru,|and on the said conditions being complied with, the stay was)extended till disposal of the appeal pending before the)Tribunal, by directing the Tribunal dispose of the appeal on or.before 31.1.72018. It was In the aforesaid factual matrix that.the order was passed by this Court. But, what is significant.from the order passed in the aforesaid writ petitions, it is thefact that this Court had reigned in 75% of the outstanding.dues t.e., 55% by way of payment stated to be voluntarily|paid by the petitioner and 20% by retaining the balance in the account with the bank. If the said parameter has to be.applied to the present case naving regard to the outstandingdues and the payments made, it is noticed that for theAssessment Years 2009-10 and 2010-11, 50% of thepayment nas already been made by the assessee. In thecircumstances, for the aforesaid two assessment years, thepetitioner is directed to furnish a Bank Guarantee for the)balance of 25% of the outstanding dues. 9. In so far as Assessment Year 2011-12 is concerned, |as only 30% of the outstanding dues has been paid, the)petitioner is directed to pay remaining 20% to therespondent-Department on or before 7[6<]January 2018. Forthe balance of 25%, the petitioner is directed to furnish Bank.Guarantee in terms of the aforesaid direction j.e€., on orbefore 31[st]December 2701 7. 10. In so far as Assessment Year 2012-13 Is)concerned, it is noted that even when the stay was granted|in the first instance by the Tribunal by exercising jurisdictionunder the first proviso to Section 254 (2A) of the Act, the) Tribunal had ordered that 50% of the dues be deposited.Tne said order was assailed by the assessee in Writ Petition|No.13601/2017. This Court by the order dated 17.7.201/7,reduced the percentage to be paid from 50% to 30%. |Learned counsel for the petitioner submits that the saiddirection nas been complied with. In the circumstances, the|Tribunal, in my view, could not nave once again directed the|petitioner to pay 55% of the amount, having regard to thefact that the order dated 17.7.2017 has, for tne present,|attained finality and has not yet been interfered with in-appeal. Tnougn learned counsel for the respondent-Department submits tnat Writ Appeal No.5193/2017 has—been filed by the Department against the said order, thesame is pending consideration by the Division Bench of this.Court. 11. In the circumstances, as far as Assessment Year|2012-13 is concerned, there cannot be a direction to thepetitioner to deposit further 20% as the same is pending|adjudication before the Division Bench. Instead, the) 11. In the circumstances, as far as Assessment Year|2012-13 is concerned, there cannot be a direction to thepetitioner to deposit further 20% as the same is pending|adjudication before the Division Bench. Instead, the) petitioner is directed to furnish a Bank Guarantee for 45% of|tne dues as far as that assessment year is concerned. Thesaid Bank Guarantee shall also be furnished on or before |31[st]December 2ZO1/. It Is needless to observe tnat tne|directions issued as far as Assessment Year 2012-13 iIsconcerned, the same is subject to any further orders to be|passed by the Division Bench of this Court in Writ AppealNo.5193/2017. Pending such order, the aforesaid directionwould prevail. 12. Having heard the learned counsel for the petitionerand the learned counsel for the respondent-Department, it is|noted that in the earlier writ petition disposed of by this|Court, while staying the impugned directions of the Tribunal,on compliance of the directions issued by this Court, a)further direction was issued to the Tribunal to dispose of that)appeal concerning the Assessment Year 2013-14 on or before31[st]January 2018. Learned counsel for the petitioner—submits that the said appeal is under consideration before| the Tribunal. In the circumstances, a similar order would|nave to be made in so far as these appeals are concerned. Accordingly, tne stay granted by the Tribunal isextended till the disposal of the appeals by the Tribunal,|subject to compliance of aforesaid directions by thepetitioner. The Tribunal is directed to dispose of the appeals,out of which, these writ petitions arise, on or before |31[st]of Marcn 2018. It is needless to observe tnat in view ofthe specific direction issued by this Court for expeditious|disposal of the appeals by the Tribunal, both parties are)directed to co-operate with the Tribunal in that regard. In the circumstances, the impugned order standsmodified with regard to the direction for deposit of the)amount, as well as, the period of stay. With the aforesaid observations and directions, the WritPetitions aredisposed. In view of disposal of the writ petitions, IA.2/201/7 filedfor stay in each of these writ petitions, stand disposed. 16| Sri K.V.Aravind, learned Standing Counsel for the.respondent-Department is permitted to file his memo ofappearance/vakalatnama within a period of six weeks from.today. *DK/| Sd/-) JUDGE.