TMI Blog2014 (4) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995 and 20th October, 1995, which, according to the DRP, indicate that Hutchison Max Telecom Private Limited could commence operations once final clearance obtained from the DoT has been filed. The DRP held that these facts indicate that the cellular services were started in the assessment year 1996-97 i.e. after 1st April, 1995. The objection in that regard was, therefore, allowed. As we mentioned earlier, the DRP, Delhi has taken a view contrary to the one taken by the DRP in the present case. Mr. Ahuja also relied upon the fact that the petitioner had itself contended that radio paging services is not the same as cellular pagers. The issue regarding appreciation of evidence does arise viz. whether from the sale of pagers, it can be inferred that paging services were in place and had commenced. We do not suggest that the petitioner would be unable to establish it's case. Indeed, the assessment order in respect of the assessment year 2005-06 is strong evidence in favour of the petitioner's case. After examining the facts, the earlier assessment order noted that the petitioner had started providing paging services also only in May, 1995 and cellular services in November, 1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r seeks a writ of certiorari to set aside an order dated 14th March, 2014, passed by respondent No.2 - The Income Tax Appellate Tribunal (hereinafter referred to as ITAT ) directing it to pay a sum of ₹ 80 crores and to furnish corporate securities for the remaining demand of tax of ₹ 238.70 crores and interest of ₹ 128.20 crores demand for the assessment year 2009-10. The petitioner seeks a stay of the entire demand pending its appeal before the ITAT. 3. The petitioner filed its return of income on 30th September, 2009, declaring a total taxable income of ₹ 5,09,100/-. The petitioner filed a revised return on 31st March, 2011, deduction a total income of ₹ 8,44,31,495/- under the normal provisions of the Income Tax Act, 1961, while offering interest income from fixed deposit to tax under section 56 of the Act. The petitioner claimed a deduction under section 80-IA of Rs,1,88,77,47,249/-. The taxable book profits under section 115JB amounted to ₹ 1,37,76,21,509/- and the tax liability in respect thereof amounted to ₹ 15,60,84,517/-. The tax deducted at source was ₹ 39,49,14,458/-. From the payments made to the petitioner by variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituted] (2A) Notwithstanding anything contained in subsection (1) or sub-section (2), the deduction in computing the total income of an undertaking providing telecommunication services, specified in clause (ii) of sub-section (4), shall be hundred per cent of the profits and gains of the eligible business for the first five assessment years commencing at any time during the periods as specified in sub-section (2) and thereafter, thirty per cent of such profits and gains for further five assessment years. 6. The petitioner's case is this. The petitioner started business in the assessment year 1996-97. In other words, according to the petitioner, it's business started only after 1st April, 1995. The petitioner did not claim any deduction before the amendment to section 80-IA. Section 80-IA was amended in the year 2000. The petitioner claimed a deduction under section 80-IA for the first time only for the assessment year 2005-06. For the assessment year 2005-2006, the petitioner's claim for deduction under section 80-IA was accepted. The petitioner was, however, denied exemption from the assessment year 2006-07. The denial of the petitioner's claim for ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary, 2011, in respect of the assessment year 2006-07, which took a different view. In paragraph 5.1.1.4 of the directions, the DRP held : 5.1.1.4 The Panel has carefully considered the contentions of the Assessing Officer as incorporated in the draft assessment order, the submissions of the assessee alongwith the additional evidence and find that the assessee had itself claimed in the assessment year 1995-96 that it had setup its business prior to 31.03.1995. The said claim was never withdrawn by the assessee. Also, in the statutory audit report prepared by PWC and filed under section 80-IA(7) for the year under consideration, the date of commencement of assessee's operations/activity was given as 29th November 1994. Similarly, in a letter dated 26 October 2009 filed before the Assessing Officer, it was mentioned that cellular and paging services were rendered in FY 1994-95. In the said letter which is reproduced in Para 12.40 of the draft order, the assessee has given specific and complete year wise details of the activities done by it. In the said letter, it is clearly mentioned that in the FY 1994-95, cellular services were started in local area served by Bombay, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the one taken by the DRP in the present case. Mr. Ahuja also relied upon the fact that the petitioner had itself contended that radio paging services is not the same as cellular pagers. The issue regarding appreciation of evidence does arise viz. whether from the sale of pagers, it can be inferred that paging services were in place and had commenced. We do not suggest that the petitioner would be unable to establish it's case. Indeed, the assessment order in respect of the assessment year 2005-06 is strong evidence in favour of the petitioner's case. After examining the facts, the earlier assessment order noted that the petitioner had started providing paging services also only in May, 1995 and cellular services in November, 1995 and accordingly, the question of the petitioner commencing the provision of telecommunication services during the period prior to 1st April, 1995 does not arise. (c) Mr. Ahuja also invited our attention to the fact that an article published in the Indian Express news quoted the Associate Vice President of the petitioner having stated that the paging services were launched in the year 1994. The petitioner's explanation to the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the decision of the Tribunal only with a view to indicate the position as regards the petitioner's appeal pending before the Tribunal in respect of the final assessment order passed for the assessment year 2009-10. As far as the Tribunal is concerned, at least on the alternate case of the Revenue, the petitioner has made out more than just a strong prima facie case. Even on the first issue, the scales would tip in favour of the petitioner on account of the categorical findings of the DRP that the petitioner commenced its business only after 1st April, 1995 in the assessment year in question itself. However, before the Tribunal, the issue would be debatable, including on the basis adopted by the directions of the DRP, New Delhi. As we mentioned earlier, on this issue the petitioner has made out a strong case, but not an open and shut case even as far as the Tribunal is concerned. 15. By the impugned order, the Tribunal has taken into consideration the financial hardship pleaded by the petitioner. In fact, the operative part of the order is prefaced with the observation that the Tribunal has taken into account the liquidity position as well as the continuous loss incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year is taken separately, then of course there would be a liability against the petitioner for the assessment year 2003-04 - but such a narrow or constricted view does not commend itself to us since it would unnecessarily deprive an assessee of good money due to it from the Revenue. Looked at in this larger perspective, we are of the view that the petitioner would be entitled to the relief prayed for since it has, quite clearly, paid more than the amount that is due if the order passed by the Special Bench is implemented. In arriving at this conclusion, we have also taken note of the fact that the order of the Special Bench has not been stayed and is still operative and has in fact been given effect to by the Tribunal itself in its order dated July 29, 2005. Consequently, we issue a writ of mandamus and stay the requirement of the petitioner having to deposit ₹ 4.86 crores till its appeal for the assessment year 2003-04 is heard by the Commissioner of Income-tax (Appeals). This would necessarily imply that the Commissioner of Income-tax (Appeals) should hear the appeal of the petitioner for the assessment year 2003-04 without insisting on any deposit. The writ peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
