TMI Blog2020 (3) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... aw the proceedings initiated by it before the AAR and the Department may also file an appropriate affidavit stating that it was willing to treat the communication dated 22.03.2018 as a show cause notice. An appropriate affidavit of undertaking to withdraw the proceedings initiated before the AAR has since then been filed by the appellant. The communication dated 22.03.2018 shall be treated as a show cause notice calling upon the appellant to respond with regard to the aspects adverted to in said communication. The appellant shall be entitled to put in its reply and place such material, on which it seeks to place reliance, within 10 days from today. - CIVIL APPEAL NO. 1992 OF 2020 ( ARISING OUT OF SPECIAL LEAVE PETITION(CIVIL) No. 23705 of 2019) - - - Dated:- 4-3-2020 - JUSTICE UDAY UMESH LALIT, JUSTICE INDU MALHOTRA And JUSTICE HEMANT GUPTA For the Petitioner : Mr. Gopal Subramanium, Sr. Adv. Mr. Tushar Jarwal, Adv. Ms. Anuradha Dutt, adv. Ms. Fereshte D. Sethna, Adv. Mr. Vijayalakshmi Menon, Adv. Mr. Rahul Sateeja, Adv. Mr. Srinath Sridevan, Adv. Mr. Pawan Bhushan, Adv. Ms. Hima Lawrence, Adv. Mr. Vivek Raja, Adv. Mr. Deepak Thackur, Adv. Ms. B. Vijayalakshmi Menon, AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On 21.11.2017 a letter was received by the appellant from the Deputy Commissioner of Income Tax, Large Taxpayer Unit-1, Chennai in connection with non-payment of tax on the remittances made to the nonresidents, in Financial Years 2015-16 and 2016-17. The letter stated:- On verification of 15CA data available with the department, it is noticed that your company has made the following remittances to non-residents during the financial years 2015-16 and 2016-17. Date of Remittance Name of the non-resident company receiving the remittance Amount remitted (Rs.) Tax made on remittance (Rs.) 17.02.2016 Cognizant (Mauritius) Ltd. 335,36,38,361 Nil 19.05.2016 Cognizant (Mauritius) Ltd. 10761,03,91,036 Nil 19.05.2016 Cognizant Technology Solutions Corporation, USA 7511,40,61,859 810,73,37,402 19.05.2016 Market Rx Luc, USA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved by the Court, the provisions of section 115-QA, 115-O or 2(22) of Income Tax Act are not applicable to its case. During the personal discussion between the company and the AO/JCIT/CIT (LTU), it was brought to the notice of the Company that: Provisions of sections 115-QA of the IT Act, which were introduced w.e.f. 01.06.2013, defines the buyback , as the one done in accordance with sec.77A of the Companies Act (valid upto 31.05.2016). W.e.f. 01.06.2016, any buy-back of own shares will attract 115-QA. Provisions of sec.2(22)(d), clearly postulates that any distribution on reduction of capital, to the extent of accumulated profits will amount to dividends. The only exception to this is the buy-back u/s. 77A of the Companies Act. Provisions of sec.2(22)(d) are: S.2(22)(d): any distribution to its shareholders by a company on the reduction of its capital, to the extent to which the company possesses accumulated profits which arose after the end of the previous year ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not: Even otherwise, provisions of sec. 2(22)(a) of the Act, which stipulate that any dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 115-P of the Act, immediately, failing which the department will proceed with the collection and recovery of the taxes, including coercive steps, as per the provisions of the Act. 7. Said communication dated 22.03.2018 was received by the appellant on or about 26.03.2018 and soon thereafter the bank accounts of the appellant were attached by the Department. 8. It must be stated here that while the meetings between the officials of the appellant and the officers of the Department were going on, an application was preferred by the appellant on 20.03.2018 before the Authority for Advance Ruling (AAR) under Section 245Q of the Act The Income Tax Act, 1961 seeking a ruling on the issue whether the appellant was liable to pay tax on buy-back of its shares under Section 115QA or Section 115-O or any other provision of the Act. 9. The appellant challenged the communication dated 22.03.2018 by filing Writ Petition No.7354 of 2018 in the High Court submitting inter alia that while the issue was pending before the AAR under Section 245Q of the Act, in view of the bar provided under Section 245RR of the Act, the matter could not have been considered. It was also submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Bank account in JP Morgan Chase Bank N.A., J.P. Morgan Tower, 8th Floor, Off C.S.T Road, Kalina, Santacruz East, Mumbai 400 098 shall stand lifted forthwith. However, the attachment in respect of other Bank accounts viz., (a) State Bank of India, CAG Branch, Chennai. (b) Deutsche Bank, Ground Floor, Door No.4 4A, Western Tower, Sunny Side, Shafi Mohammed Road, Thousand Lights, Chennai 600 006. (c) Corporation Bank, Corporate Banking Branch, 38 39 Whites Road, Chennai-600 014. (d) City Bank N.A., No.163, Anna Salai, Chennai-600 002. (e) HDFC Bank, No.115, Dr. Radhakrishnan Salai, 9th Floor, Mylapore, Chennai-600 004, shall continue till the compliance of the above direction. Similarly, the attachment of the nine Bank deposits viz., (1) HDFC Limited, (ii) HDFC Limited, (iii) HDFC Limited, (iv) HDFC Limited, (v) HDFC Limited, (vi) HDFC Limited, (vii) Bajaj Finance Limited, (viii) Bajaj Finance Limited, (ix) Bajaj Finance Limited shall also continue subject to the lien being created for the remaining amount of taxes. The remittance of 15% of the tax demanded shall be retained in a separate account and shall ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atural justice or requisite procedure contemplated under the Act is a matter for consideration before the Appellate Authority. The learned Single Judge has rightly observed that the appeal can be entertained and decided on merit as the appellant has already deposited a sum of ₹ 495 crores. 13. The view taken by the Division Bench of the High Court is presently under appeal. On 04.10.2019, an affidavit of undertaking, filed on behalf of the appellant was taken on record in which it was submitted:- In the event this Hon ble Court is gracious to pass an order that the fixed deposits over which a lien has been created, pursuant to the Interim Order passed by the Learned Single Judge (continued by the Division Bench), is vacated as an interim measure to enable the Petitioner Company to run its business and operations, the Petitioner undertakes that in the event this Hon ble Court is satisfied that any security must be offered by the Petitioner ex debito justitiae at the time of the disposal of the Special Leave Petition, the Petitioner will unqualifiedly, without demur, furnish such security/fixed deposits to the satisfaction of the Registrar of the Hon ble Court as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as a show cause notice and the Department be permitted to conclude the issue within a reasonable time, provided the interim order passed by the Single Judge of the High Court on 03.04.2018 was continued. The course suggested by the learned counsel for the Department was acceptable to the learned Senior Counsel for the appellant. 17. It was, therefore, suggested that the appellant may file an affidavit of undertaking to withdraw the proceedings initiated by it before the AAR and the Department may also file an appropriate affidavit stating that it was willing to treat the communication dated 22.03.2018 as a show cause notice. An appropriate affidavit of undertaking to withdraw the proceedings initiated before the AAR has since then been filed by the appellant. An affidavit has also been filed on behalf of the Department stating:- The communication dated 22.03.2018 may be treated as a show cause notice and the assessee will be given an opportunity of being heard and a fresh order will be passed within two months from the date of the judgment of this Hon ble Court. 18. In the peculiar facts and circumstances of the present case, while disposing of this Appeal, we di ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
