TMI Blog2014 (2) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... nt spectator to the arbitrary and illegal actions on the part of the Assessing Officer so as to frustrate the legal process provided under the Act. In terms of the proviso to Section 254(2A) of the Act, the Tribunal is empowered to grant stay against any demand, pending disposal of appeal before it - The order passed by the Tribunal directing the revenue to refund the amount of Rs.159.84 crores to respondent No.2 was upheld - Decided against petitioner. - Writ Petition (L) No.3174 of 2013 - - - Dated:- 4-2-2014 - Mohit S. Shah, CJ And M. S. Sanklecha,JJ. For the Appellants : Mr Vimal Gupta Sr. Adv. And Mr Padma Divakar For the Respondents : Mr Pradeep Jetaly And Mr M S Bhardwaj And Mr Vinod Joshi (No.1) JUDGMENT (Per M. S. Sanklecha, J.) At the request of the parties, the petition is taken up for final disposal at the stage of admission. 2) This petition by the revenue challenges the order dated 25 November 2013 passed by the Income Tax Appellate Tribunal ( the Tribunal ) directing the petitioner revenue to refund an amount of Rs.159,84,03,720/( rounded of to Rs.159.84 crores for this order) within 10 days from the receipt of the impugned order. The im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income Tax as the administrative head seeking a complete stay of the demand of Rs.199.82 crores. e) On 4 September 2013, the Commissioner of Income Tax modified the terms of the stay granted by the Assessing Officer and and directed respondent No.2assessee to pay the outstanding balance aggregate demand in 10equal instalments of Rs.17.76 crores beginning with 15 September 2013. Respondent No.2 paid the first instalment on 15 September 2013. Therefore, respondent No.2 had in the aggregate paid an amount of Rs.39.96 crores out of total demand of Rs.199.80 crores ( Rs.146.91 crores tax and Rs.12.88 crores as interest). f) Thereafter, before the second instalment became due, respondent No.2assessee on 10 October 2013 filed Writ Petition No.2544 of 2013 in this Court seeking stay of demand and the quashing of orders dated 23 July 2013 of the Assessing Officer and 4 September 2013 of the Commissioner of Income Tax. No orders were obtained by respondent No.2 in its Writ Petition No. 2544 of 2013 filed in this Court. However, the Commissioner of Income Tax (Appeals) did hear respondent No.2 assessee on its appeal from the order of the Assessing Officer dated 18 Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59.84 crores to respondent No.2 within 10 days from the receipt of the order. It is against the aforesaid directions in the impugned order dated 25 November 2013 that this petition has been filed. 3) Mr. Vimal Gupta, learned Senior Counsel appearing for the petitioner revenue in support of the petition submits as under: a) On facts it is stated that the bank account was attached on the morning of 18 November 2013 while the intimation about the filing of the appeal and stay application before the Tribunal was filed in the office of the petitioner only at 3.30p.m. and reached the Assessing Officer only at 5.30p.m. of 18 November 2013. In the mean time the amounts which were attached had already been withdrawn. Therefore, the attachment and withdrawal of the amounts by the Assessing Officer was prior to knowledge of the filing of the appeal and stay application to the Tribunal and fixing of the hearing on 22 November 2013. b) The impugned order dated 25 November 2013 is without jurisdiction. This submission was premised on the fact that the impugned order holds that it cannot exercise jurisdiction with regard to the stay of the recovery of the demand as the matter is subjudice b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be heard on 22 November 2013. On 18 November 2013 itself not only was the appeal and the stay application served upon the Assessing Officer at about 12.30p.m. But intimation that stay application was listed for hearing on 22 November 2013 was also given to the Assessing Officer. Notwithstanding the above, the Assessing Officer visited the bankers of respondent No.2 in the afternoon and delivered a notice under Section 226(3) to the Manager of the petitioner's bank and forcibly recovered the amount of Rs.159.84 crores. The above conduct, it is submitted, clearly demonstrates that the Assessing Officer wanted to preempt the Tribunal from dealing with the petitioner's stay application which was scheduled for hearing on 22 November 2013. b) No fault can be found with the impugned order dated 25 November 2013 of the Tribunal directing a refund of the entire amount of Rs.159.84 crores as it merely follows the binding decisions of this Court in Mahindra and Mahindra Vs. Union of India 59 ELT 505 wherein the amounts recovered by the revenue by encashing the bank guarantee even before the time to file appeal had expired was ordered to be refunded to the assessee. Further, the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction to deal with application for stay, has nothing to do with the power of the Tribunal to grant refund of amount illegally collected pending the hearing of stay application by the Tribunal. This is particularly so as no stay could have been granted by the Tribunal on the application for stay in view of the fact that there was nothing to be stayed as the amount of Rs.159.84 crores had already been taken away by the petitioner revenue. Besides, there was no reason to be in such unseemly hurry when an amount of Rs.39.96 crores i.e. 25% of the tax demand of Rs.146.91 crores has already been deposited. In view of the above, it is submitted that the petition should not be entertained. 5) We have considered the rival submissions. We find that the order dated 29 October 2013 of the Commissioner of Income Tax (Appeals) dismissing the appeal of respondent No.2 was served upon respondent No.2 only on 16 November 2013 (Saturday). Respondent No.2 filed an appeal and stay application before the Tribunal on the next working day i.e. 18 November 2013 and informed the Assessing Officer that the hearing of the stay application of respondent No.2 was fixed on 22 November 2013. There is a disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should not act as a mere tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interest of the Revenue while the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order; the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue. The above order in UTI (supra) was brought to the notice of the Assessing Officer on 13 November 2013 by respondent No.2 while pointing out that it would be filing an appeal and stay application to the Tribunal in respect of the order of CIT(A). 7) The action of the petitioner revenue, in particular, the Assessing Officer was in defiance of the above directions of this Court in UTI Mutual Funds vs. ITO (supra) wherein this Court had inter alia directed the revenue that no recovery of tax should be made before expiry of the time limit for filing an appeal before the higher forum has expired. The Court also has directed that when the bank account has been attached the revenue would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of same being a subject matter agitated before this Court was not entitled to direct refund, is unacceptable. Once the amount of Rs.159.84 crores being the balance amount of tax payable by respondent No.2 to the petitioner revenue was withdrawn by the revenue there is no occasion for the Tribunal or the High Court to grant any stay. Therefore, the impugned order could not have granted any stay as there was nothing to be stayed. However, the grant of refund was in the exercise of Tribunal's inherent powers to ensure that the assessee is not left high and dry only on account of illegal and highhanded actions on the part of the petitioner revenue and the Assessing Officer. 10) In any event, so far as Writ Petition No.2544 of 2013 filed by respondent No.2 in this Court is concerned, the same was for the purpose of seeking a stay essentially of the order of the Assessing Officer dated 23 July 2013 and of the Commissioner of Income Tax dated 4 September 2013 which had granted a conditional stay of notice of demand issued by the Assessing Officer. These applications before the Assessing Officer and the Commissioner of Income Tax as well as Writ Petition were all filed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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