TMI Blog2017 (5) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby the outstanding demand was stayed till the disposal of the appeals by the Tribunal or 01.11.2016, whichever was earlier. 2. Before us, the ld. counsel for the assessee, at the outset submitted that present stay applications are for extension of stay granted by the Tribunal. He submitted that originally stay was granted vide order dated 30.09.2014 and then on an application filed by the assessee, the extension was granted further for a period of 180 days and finally vide order dated 29.07.2016, the Tribunal was pleased to extend stay for a period of 90 days, which is now expiring on 01.11.2016. He further submitted that as there is no change in the facts and circumstances and there is no fault on the part of the assessee as the cases has not yet been fixed for hearing before the Third Member, therefore, the delay in disposal of appeals is not attributable to the assessee. He, therefore, prayed that the extension may be granted till the final disposal of the appeals by the Bench. 3. The ld. DR, on the other hand, strongly opposed the applications for extension of stay and submitted that if there is no fault on the part of the assessee then there is no fault on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to assessee. It was further submitted that appeals of the assessee in quantum proceedings has been admitted by the Hon'ble High Court which makes the issue in dispute debatable and therefore also the penalties were not leviable. 5. We have heard the rival contentions and have perused the material available on record. We have also considered the circumstances and observations contained in the interim orders dated 30.09.2014 (supra) 29.07.2016 (supra) and find the appeals of the assessee have been referred to the Third Member because of difference of opinion between the Members and which are yet to be fixed for hearing. The outstanding demand in the present cases, was stayed by the interim orders passed by the Tribunal dated 30.9.2014 (supra) 29.07.2016 (supra). The assessee has moved the present stay applications seeking extension of stay of recovery of the outstanding demand, beyond a period of 365 days even after insertion of third proviso to section 254(2A) of the Act, w.e.f. 1.10.2008 whereby the Tribunal's powers has been restricted to extend stay of demand beyond a period of 365 days. The ld. counsel for the assessee has relied on the decision of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble High Court and therefore, the issue on which penalty was imposed is a debatable issue and therefore also penalty was not leviable. Keeping in view the above facts and circumstances, we find that these cases are deserving cases for grant of extension of stay beyond 365 days and ratio of the case law of Hon'ble Punjab Haryana High Court is applicable to the facts and circumstances of the present cases. The case law relied upon by the ld. DR in the case of Ecom Gill Coffee Trading (P.) Ltd. (supra) relates to Hon'ble Karnataka High Court, whereas the case law relied upon by the ld. AR relates to jurisdictional High Court of Punjab Haryana. Therefore, keeping in view the above decision of Hon'ble Punjab Haryana High Court, we extend the stay for further period of 90 days or till the disposal of the appeal by the Third Member, whichever is earlier. The terms and conditions of the original stay order as well as of the extended stay order will continue to remain the same. In the meantime, the parties are directed to approach the appropriate authorities for fixation of their appeals for hearing so that the dispute could be resolved. 7. In the result, both the stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal of the appellant/assessee vide order dated 2.7.2014. 3.3 Thereafter, the Assessee preferred second appeals before the ITAT as well as also filed applications for stay of demand on 25.09.2014. 3.4 The Tribunal vide order dated 30.09.2014 granted stay of demands and the stay order was further extended from time to time, however, the Tribunal on 26.08.2015 finally decided the appeal of the assessee by taking divergent views and Hon'ble President of the ITAT referred the matter to the Third Member to adjudicate the question of law which existed divergent views between the Hon'ble Members. In the meantime, the stay was further extended from time to time and the matter was fixed before the Third Member for hearing on 10.05.2016, the Tribunal adjourned the hearing sine die on that date. It is to mention herein that by issuing garnishee notice dated 04.01.2016, the Revenue department attached the Bank account of the Assessee and aggrieved by the aforesaid attachment, the assessee filed a writ petition No. CWP 1722/2016 under article 261 of the constitution before the Hon'ble jurisdictional High Court and the Hon'ble Court vide order dated 21.07.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the ITAT cannot extend the order of stay beyond the statutory period of 365 days, even if the delay in disposing of the appeals is not attributable to the assessee. 6.1 Further contended by the ld. DR that the Hon'ble Tribunal is not empowered to go beyond specific provisions of the Act, as it mandates that the stay cannot be extended beyond 365 days. Even otherwise prima facie case is in favour of the Revenue the jurisdictional High Court and extended blanket stay without imposing any condition as mandates by the Jurisdictional high Court. Finally, it was argued by the ld. DR that if still the Tribunal feel it appropriate to extend the stay, then interest of the Revenue may be safeguarded by directing the assessee to deposit the quantum of penalty order subject to refund by the Revenue on success of assessee's appeals or otherwise any other security as deems fit and proper as the same was directed by the jurisdictional High Court while passing order dated 21.07.2016. 7. In reply to the submissions of the ld. DR, the ld. counsel for the assessee argued that the assessee is working on an overdraft limit and putting any kind of condition qua security shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond 365 days in deserving cases. Applying the ratio of the aforesaid case decided by the Hon'ble Jurisdictional High Court, although the said order has been, passed in peculiar facts and circumstances, however, I feel that the ratio is also applicable to the instant case because the Hon'ble Jurisdictional High Court was also dealing with the stay of demand under section 254 of the Act. Therefore, the contention of the ld. DR that the ratio of the said case is not applicable to the instant case is devoid of merits because the jurisdictional High Court has clearly held that stay can be extended beyond 365 in deserving cases. The case of Ecom Gill Coffee Trading (P.) Ltd. (supra) relied upon by the Id. counsel for the Assessee relates to Hon'ble Karnataka High Court, therefore, in my considered opinion, the same cannot be applied in instant case because it is imperative to follow the ratio of the judgment if any on the same subject matter passed by the Jurisdictional High Court as the situation is same in the instant case. It is worthwhile to mention herein that in the instant case, the Hon'ble President, ITAT had referred the matter for decision by a Third Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the AO and the Id. CIT (A) and also one Member of the ITAT also given order in favour of the Revenue. Therefore, equity demands as well as it is imperative to safeguard interest of the Revenue also and I found support from Vodafone case in which the Hon'ble Apex Court safeguard the interest of the Revenue while securing the amount of demand under dispute by deposit of reasonable amount and rest by Bank guarantee. 8.4 The Hon'ble Apex court in the case of ITO v. M.K. Mohammad Kunhi 1969 AIR SC 430 analyzed the Tribunal's powers to grant of stay of recovery of penalty pending appeal and laid down the law as under: Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when s. 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) If yes, in what form : As the Hon'ble Tribunal deems fit Further verbally it was submitted by the Ld A/R of assessee that the Assessee is ready to give undertaking to the effect that the Assessee shall not transfer, dispose of, alienate or create any kind of third party interest in the fixed and immovable assets of the assessee-company, in order to secure the amount under consideration. Therefore, I am of the considered opinion that in the ends of justice, the stay can be extended subject to two conditions:- i. The Assessee shall provide Bank guarantee of Nationalized Bank to the tune of 25% of the amount of the order on such terms and conditions as the Revenue/Department deems fit within 30 days from the date of the order. ii. Assessee shall give undertaking to the effect that the Assessee shall not transfer, dispose of, alienate or create any kind of third party interest in the fixed and immovable assets of the Assessee-company, in order to secure the amount under consideration within 30 days from the date of the order. 8.6 In the aforesaid observations, terms conditions, the stay order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing observations vide para 8.2 of his order: 8.2 The Hon'ble Jurisdictional High Court passed the order dated 21.07.2016 in Writ Petition No. 1722/2016 by giving specific direction to impose condition in the event of the stay being extended by the Tribunal for any period. The relevant operative part of the order is again reproduced herein below for the sake of convenience and brevity: In the event of the stay being extended by the Tribunal for any period, the respondents shall refund the amount recovered but subject to any conditions imposed by the Tribunal. However, from the stay order dated 29.07.2016 passed by the Hon'ble Tribunal, it does not reflects the mentioning/consideration of the aforesaid directions. 3. Whether while making such observations, the ld. JM was justified in observing that on the basis of directions of the Hon'ble High Court the Tribunal was bound to impose conditions while granting extension of stay? 4. Whether while making such observations is it justified on the part of Hon'ble JM to ignore the reasons for extension of stay as given in the Tribunal order dated 29.07.2016 wherein the Hon'ble Tribunal had al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty as the Hon'ble Tribunal deems fit and during the Course of hearing also, it was submitted by the Ld. Counsel of the Assessee that the Assessee is ready to give undertaking to the effect that the Assessee shall not transfer, dispose of, alienate or create any kind of third party interest in the fixed and immovable Assets in order to secure amount under dispute in the instant appeals, in that eventuality, the Ld. Accountant Member was justified to extend the blanket stay (Without conditions) without considering the said undertaking and assurances of Assessee ? 5. Whether the Tribunal is justified to grant/extend blanket stay without considering the fact that it shall amounts to jeopardize the rights of the Revenue? 6. Whether financial constraints and situation of year 2014 is paramount and would be more relevant to consider while ignoring the today position, in extending the stay in the absence of any supporting documents? 7. Whether once statute specified 365 maximum days for stay of Order then lapse of around 761 days are not relevant and important to consider while considering application for extension of extension? 8. Whether the Ld A.M, was not duty bound and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration that assessee in the Stay Applications has agreed to offer securities as deemed fit by the Tribunal. The Ld. Judicial Member, therefore, extended the stay for further period of 90 days as has been extended by the Ld. Accountant Member, however, subject to two conditions : (i) The assessee shall provide bank guarantee of Nationalized Bank to the tune of 25% of the amount of the order on such terms and conditions as the Revenue Department deems fit within 30 days from the date of order ; (ii) The assessee shall give undertaking to the effect that the assessee shall not transfer, dispose off, alienate or create any kind of third party interest in the fixed and immovable assets of the assessee company, in order to secure the amount under consideration within 30 days from the date of the order. 3. Since there had been a difference of opinion between both the ld. Members of ITAT Amritsar Bench, therefore, both the ld. Members have framed their questions for reference to the Third Member. Hon'ble President, ITAT Mumbai has appointed me as Third Member to resolve the controversy involved while passing the orders on the Stay Applications. 4. I have heard ld. Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to do day-to-day business so no demand could pay to Department. The ld. counsel for the assessee, therefore, submitted that assessee is willing to give undertaking to the Revenue Department that it shall not transfer or alienate any of his fixed assets or immovable assets till the disposal of the appeals in order to protect the interest of revenue, therefore, condition of paying 25% through bank guarantee should not have been imposed. The ld. counsel for the assessee submitted that when stay was extended vide order dated 29.07.2016, the department has refunded the amount so realized by them. Copy of the order is also placed on record. 6(i) On the other hand, ld. DR submitted that the directions of the Hon'ble High Court dated 21.07.2016 have not been followed by the ITAT Amritsar Bench in their order dated 29.07.2016. No blanket stay should be granted in the matter. The assessee on the hearing of Stay Applications has agreed to give undertaking not to transfer or alienate their fixed assets/properties. The department has prima facie case to levy the penalty, because quantum was decided against the assessee. The assessee paid advance tax of ₹ 166 crores in this year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery of the penalty was made contrary to and in violation of an interim order granted by the Tribunal. It is not necessary to refer to the facts in detail. It is sufficient to note only a few facts. 2. On 18.02.2014, the Assessing Officer passed an order under Section 271(l)(c) imposing a penalty which was affirmed by the order of the CIT (Appeals) dated 02.07.2014. The appellant filed an appeal before the Tribunal which, by an order dated 30.09.2014, allowed the stay application filed by the petitioner. We are informed that the petitioner sought a stay of 180 days. The order, therefore, was limited to 180 days. On 25.03.2015, the petitioner filed another application for stay which, by an order dated 05.06.2015 was adjourned sine die and the Tribunal directed that no coercive measures be taken for recovery of the disputed demand in the meantime and directed status quo to continue. There was no time limit of the stay order. The appeal was heard on 26.08.2015. As there was a difference between the members, a reference was made on 06.01.2016 to the President of the Tribunal for placing the appeal before a third member. By an order dated 03.02.2016, the third member noted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any condition. The ld. Judicial Member by following the judgment of Hon'ble Punjab Haryana High Court dated 21.07.2016 (supra), though extended the stay for further period of 90 days but imposed the above two conditions. The point of difference is, therefore, whether stay should have been extended with condition or without any condition. The department is aggrieved because the judgment of Hon'ble Punjab Haryana High Court dated 21.07.2016 have not been followed by the Tribunal in their earlier order as well as in subsequent orders. The ld. DR contended that direction of the Hon'ble High Court should be followed by the Tribunal. 10. I am of the view that judgment of Hon'ble High Court in the case of the assessee is the best precedent to be followed by the subordinate authorities including the Tribunal. The directions of the Hon'ble High Court are clear and specific that in the event stay is being extended by the Tribunal, the Income Tax Department shall refund the amount recovered, but subject to any condition imposed by the Tribunal. The Deptt. has refunded the recovered amount. Therefore, while extending the stay, even if no delay is attributabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Division Bench for passing consequential order. ORDER T.S. Kapoor, Accountant Member - This order is being passed as a consequential order after the Third Member order dated 04.01.2017 on there being a difference of opinion between ld. Members constituted by the Amritsar Bench. The difference of opinion arose between the members while granting extension of stay for the recovery of demand. 2. The brief facts of the case are that the assessee was imposed penalty u/s. 271(l)(c) of the Act. While adjudicating the appeals relating to penalty difference of opinion arose between ld. Members constituted by the Amritsar Bench and therefore, the matter was referred to Third Member for his decision. However, the hearing before Third Member could not take place. 3. In the meantime, on an application filed by assessee, it was granted stay vide order dated 30.09.2014, which on another application was further extended by order dated 29.07.2016. Again assessee applied for extension of the Stay Order as the cases fixed before Third Member were not heard and delay in disposal of appeals were not attributable to the assessee. The Accountant Member, therefore, passed the order fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
