TMI Blog2004 (2) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were posted, were heard prior to the applications, which were not listed. To this, query of the Bench, the learned Authorised Representative contended that he would argue the matter, if time is granted. Under these circumstances, the matter was adjourned to12th Feb., 2004. On12th Feb., 2004the same request for adjourning this matter on the ground that the other applications were pending, this time through the written communication was once again made. As the learned counsel had agreed to argue the matter the previous day, i.e., on11th Dec., 2002, we, in these circumstances rejected the application and proceeded to hear the matter. 2. Necessary facts available on record for the adjudication of the present controversy are that a search and seizure operation was conducted at the premises of the assessee on1st Sept., 1994. Consequent to the search, the AO called upon the assessee to file the return. After various adjournments the return was filed. The AO felt that the return which was filed was not a complete return. Certain relevant documents had not been enclosed with the return. As the return was not complete, the AO called upon the assessee to remove the defects which was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing authority as well as before the CIT(A), as the photocopies of the seized documents and other records had not been supplied to the appellant and the seized computers were not released by the IT Department despite several letters. According to the assessee, as the Revenue did not supply him the necessary documents which were in their possession and belonged to the assessee, the assessee was prevented by reasonable cause to submit his explanation and justification on the issues so raised by the assessing authority and the CIT(A). The assessee had contended that the proceedings conducted by the authorities below were contrary to the principles of natural justice. After having submitted so, the learned Authorised Representative contended that this Tribunal has in the case of Shahenshah Talwar who is the director of the company had filed an application for stay before this Tribunal in ITA No. 2482-2488/Del/2003 and in Stay Application No. 312-318/Del/2003 this Tribunal has granted the stay of recovery of demand in those cases subject to the applicant making a deposit of Rs. 15,000 per month. Some other conditions were also imposed by this Tribunal in the order itself. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in obtaining the stay order from another CIT who had no jurisdiction, and who had passed the order without even cross-checking the facts pertaining to supply of documents from the AO came to her notice, she immediately called upon the assessee to deposit the amount. The learned Departmental Representative contended that such an order passed by an officer staying the demand, being without jurisdiction, had no binding effect on the officer who was seized of the matter. The learned Departmental Representative also contended that the assessee was supplied with the documents way back on7th Oct., 1994. He made the statement by reference to the letter of11th July, 2003written by Asstt. CIT, Circle 27(1) to Shahenshah Talwar. The learned Departmental Representative also drew our attention to the noting so recorded by the concerned officer on the letter of the assessee to the Asstt. CIT for supply of documents wherein it has been so recorded that the documents were supplied on7th Oct., 1994. It was, in this background, contended that not only the assessee was granted ample opportunity but he had obtained the necessary documents from the record. According to the learned Departmental Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Departmental Representative contended that the balance of convenience is in favour of the Revenue and not in favour of the assessee. The learned Departmental Representative contended that the plea of the assessee that the documents have not been supplied to him till 2002 is false on the face of it for the reason that no grievance has been made by the assessee before the CIT(A) to the said action of the AO as no such ground has been raised by the assessee in the grounds of appeal before the CIT(A). The learned Departmental Representative in the alternative submitted that as the assessee had obtained the documents or that the assessee was in possession of necessary and relevant documents, it was for this and for this reason alone the assessee had not raised any ground in ground of appeal before CIT(A) because he had no grievance on this score and, therefore, there is no prima facie case in favour of the assessee and the plea of the non-supply of documents is nothing but afterthought. The learned Departmental Representative contended that how can the assessee claim to have balance of convenience in his favour especially when he, after the letter of 26th March, 2003, written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an through the material on the record and filter the necessary facts. The necessity for filtering the facts and scanning through the record had arisen because there are no averments made in the application with regard to the facts which establish prima facie case. All that it was stated in the application for stay against column No. (vi) was that the appellant-company is not in a position to pay the created illegal and unlawful demand. How it is illegal demand, why it is disputed or illegal whether any amount of tax is payable or not, the application is totally silent. The whole thrust of the assessee s case was that documents were not supplied. When such serious allegations were made against Revenue with regard to non-compliance of rules of natural justice, we first of all took ourselves through the assessment order where the facts are very clearly recorded and from there we find that a search was conducted at the premises of the assessee on1st Sept., 1994. Consequent to a search on1st Sept., 1994at the premises of the assessee notice under s. 142(1) was issued on30th Nov., 1995calling upon the assessee to file its return which notice was served on4th Dec., 1995. Pursuant to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion were compiled with. On4th Jan., 2000another notice under s. 142(1) was issued along with the letter by the AO and simultaneously penalty proceedings under s. 271(1)(b) were also initiated for previous non-compliance. The said notice was served personally at the business premises of the assessee by the Inspector and the case was adjourned to17th Jan., 2000. On 17th Jan., 2000, there was no compliance from the assessee despite service and the matter was adjourned to 15th Dec., 2002, but as a gesture to give fair opportunity to the assessee, the AO on 9th Feb., 2000, issued another letter asking the assessee to explain the bank entries, the details of which were directly obtained from the bank, but this was not done. As the assessment was getting time-barred and the attitude of the assessee was not co-operative, the AO framed the assessment under s. 144. 8. The assessment so framed gave rise to the appeal before the CIT(A), but the attitude of the assessee did not improve as during the pendency of appeal which lasted for months, the assessee appeared only once and, in these circumstances, the CIT(A) had no option but to dismiss the appeal on merits and that too ex parte. 9. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he supply of the same, the assessee has the remedy available to him in law which we must say have not been availed of by him. In this case, the assessee does not take any legal recourse if his grievance is not met on the non-supply of documents and to the contrary, the assessee files a return. On what basis the return is filed is obviously on the strength of the document, otherwise the assessee could have been precluded from filing the return. Not only this, the Asstt. CIT, Circle 27(1),New Delhi, vide its letter dt.11th July, 2003addressed to Shahenshah Talwar, director of the assessee-company, had categorically stated in terms: "as regards copies of seized material is concerned, the same were handed over to your Authorised Representative and your brother Shri Deepak Talwar on7th Oct., 1994." There is no denial to this. There is another endorsement by the officer concerned which endorsement is made on the letter of the assessee in reply to the letter of the AO dt.9th March, 1998which are in these terms: "Present Shri M.R. Sehgal, advocate, with this application for adjournment at this juncture when hardly any time left. Moreover, all the copies of seized material and copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 178 CTR (Del) 394 : (2002) 258 ITR 291 (Del) wherein the Tribunal is required to consider whether or not with reference to material placed before it, a prima facie case for the grant of stay is made out or not. After examining the material placed before us and after going through the orders of the authorities below and considering the arguments raised at the bar, we feel that the story of non-supply of documents is cooked up story, devoid of any merits. The assessee, therefore, we must say, has failed to establish a prima facie case. 15. This brings us to the second issue of balance of convenience. On this we must say that even the balance of convenience is not in favour of the assessee. We say so on the basis that the assessee-company, i.e., Deeshe Appliances (P) Ltd. was possessed of Plot Nos. 204 and 205 measuring 450 sq. ft. each falling in Phase IV, Udyog Vihar, Gurgaon. The said plot out of the two, the Revenue has placed on record a sale deed dt. 2nd day of August, 1999 executed by M/s Deeshe Fold Plast in favour of Deeshe Elica India (P) Ltd. Obviously, this plot initially belonged to the assessee. The assessee must have transferred this plot to Deeshe Fold Plast, Plot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee or litigant to prove the existence of three conditions in his favour at the time when he applies to the Court for the grant of stay. These three conditions are: prima facie case, balance of convenience and irreparable loss which must co-exist and absence of even one would disentitle the petitioner or the assessee as the case may be for the grant of injunction. In this case, the assessee has not placed the balance sheet of the company depicting the financial position. Assuming though not admitting, that the company is not in a good financial position and this may cause undue hardship to the assessee, but that by itself is not enough unless and until the assessee establishes a prima facie case and balance of convenience in his favour which we have already said the assessee had failed to establish. Then, on this ground the application filed by the assessee fails. We may here itself add that in column Nos. 6 and 7 the assessee has not pleaded the existence of prima facie case or balance of convenience in his favour. All that the assessee in col. No. 6 has stated is that the appellant-company is not in a position to pay illegal demand. We feel that, that is not enough when the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout which we do not express any opinion, we do not think that it was sufficient justification for granting the interim orders as was done by the High Court. There was no question of any balance of convenience being in favour of the respondent-company. The balance of convenience was certainly in favour of the Government of India. Governments are not run on mere bank guarantees. We notice that very often some Courts act as if furnishing a bank guarantee would meet the ends of justice. No Governmental business or for that matter no business of any kind can be run on mere bank guarantees. Liquid cash is necessary for the running of Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of the utmost importance to realise that interim orders ought not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by Asstt. Collector of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not that of the assessee. 19. To the same effect is the judgment of the apex Court in the case of Empire Industries Ltd. Anr. vs.Unionof India Ors. (1986) 162 ITR 846 (SC). 20. In view of the discussion above, we must observe that the assessee has failed to satisfy all the three ingredients the existence of which is a pre-condition for the grant of injunction and we have, therefore, no hesitation in rejecting the application so filed by the assessee but at the same time we feel that this matter is already in the corridors of the tax Department for last approximately ten years and prolonging it further would prejudice the interest of both the assessee as well as the Revenue. We, therefore, feel that let this appeal be listed for an out-of-turn hearing on3rd May, 2004on day-to-day basis till it is concluded. We make it clear that if the assessee asks for a date on the said date on any ground whatsoever the out-of-turn hearing so granted shall automatically stand withdrawn without any further order. We expect both the parties to co-operative in early disposal of the appeal. 21. Before we part with, we must observe that it is a well settled proposition that the assessee befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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