Income Tax Appellate Tribunal - Delhi
Genpact India Pvt Ltd, Delhi vs Dcit Circle-10(1), New Delhi on 7 February, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'Friday', NEW DELHI
BEFORE SH. BHAVNESH SAINI, ACCOUNTANT MEMBER
AND
SH. R. K. PANDA, JUDICIAL MEMBER
Stay Application No.87/Del/2020
( In ITA No. 583/Del/2020)
Assessment Year: 2014-15
Genpact India Pvt. Ltd. Vs. DCIT
12A, Ground Floor, Prakash Circle -10 (1)
Deep Building,7, Tolstoy New Delhi
Marg, New Delhi
PAN No. AABCE4461B
(APPELLANT) (RESPONDENT)
Appellant by Sh. Peray Pardiwala, Sr.
Advocate
Sh. Sachit Jolly, Advocate
Respondent by Ms. Rakhi Vimal, Sr. DR
Date of hearing: 07/02/2020
Date of Pronouncement: 07/02/2020
ORDER
PER R.K PANDA, AM:
The assessee through this stay application requests the Tribunal to stay on the realization of the outstanding demand of Rs.820,85,85,000/- and applicable interest u/s. 220.
2. The Ld. Counsel for the assessee referring to the contents of the stay application submitted that the assessee filed its return of income on 29.11.2014 declaring net income of Rs.602,43,14,910/- under the normal provisions of the Act and Rs.13,66,87,30,839/- under the provisions of section 115 JB of the IT Act. Subsequently the assessee revised its return of income declaring net income of Rs.599,94,81,170/- under normal provisions of the Act and the same book profit as declared above. The AO completed the assessment u/s. 143 (3) of the Act determining the total income of the assessee at Rs.714,76,03,867/- under the normal provisions. However he accepted the income declared u/s. 115 JB of the Act. He submitted that the assessee filed an appeal before the CIT(A) (other than on the addition made u/s. 115QA of the Act on buy back of shares) and the appeal of the assessee as well as the revenue are pending before the Tribunal. He submitted that the AO alongwith order passed u/s. 143 (3) of the Act has also made an adjustment and raised demand u/s. 115 QA of the Act by levying tax and interest aggregating to Rs.8,20,85,85,000/- in respect of buy back of shares made by Genpact India during assessment year 2014-15 pursuant to a scheme of arrangement u/s. 391 of the companies Act, 1956.
3. While explaining a prima facie case in favour of the assessee, the Ld. Counsel for the assessee made two fold arguments. He submitted that the AO in the assessment order has mentioned the name of the assessee as "Genpact India (now merged with Genpact India Private Limited, PAN No. AABCE4461B)".
Page | 2
4. Relying on various decisions he submitted that assessment order passed in the name of the amalgamating company instead of in the name of the amalgamated company is not valid.
5. The second plank of his argument was that the provisions of section 115 QA as it stood at the relevant time is not applicable. According to him the buyback of shares in excess of 25% of paid up equity shares capital was beyond the purview of provisions of section 77 A of the companies Act and the only option available with the assessee was to buyback its equity shares to the extent of 33% of its existing equity share capital by complying with the provisions of section 391 of the companies Act. Relying on various decisions he submitted that the assessee has a strong prima facie case in its favour.
6. So far as the balance of convenience is concerned he submitted that the although the assessee has sufficient cash and bank balance, however, refund of Rs.193.34 crores as refund is due to the assessee for A.Y.2010-11 which can be adjusted towards the demand for A. Y. 2014-15. Further the assessee vide its letter dated 26.12.2019 addressed to the PCIT had agreed for additional payment of Rs. 150 crores post adjustment of the refund of Rs.193.34 crores. He accordingly submitted that stay should be granted to the assessee subject to the adjustment of the refund of Rs.193,33,58,205/- and payment of Rs.150 crores within 4 weeks. He also requested for an early hearing.
Page | 3
7. The Ld. DR on the other hand strongly opposed the stay application filed by the assessee. She submitted that the Ld. CIT(A) has thoroughly discussed both the issues raised by the assessee i.e. validity of the assessment order passed in the name of the amalgamating company and the addition made by the AO u/s. 115 QA. Therefore, the assessee does not have any prima facie case in its favour and rather the revenue has got a strong case in its favour. So far as the financial condition of the assessee is concerned the Ld. DR drew the attention of the Bench to the balance sheet of the assessee company as on 31.03.2019 and submitted that the assessee has cash and bank balance of Rs. 2789 Million. Further the total tax alongwith interest u/s. 220 is about 1100 crores and, therefore, the assessee should be directed to pay at least 50% of the outstanding demand.
8. We have considered the rival arguments made by both the sides and perused the record. After considering the totality of the facts of the case and perusal of the record, we are of the considered opinion that assessee has prima facie case for grant of stay subject to certain conditions. We, therefore, without commenting upon the merits of the case, stay the outstanding demand for a period of 6 months or disposal of the appeal whichever may expire earlier subject to payment of Rs. 200 cores by the assessee to the revenue within 30 days and direct the AO to adjust the refund of Rs. 193.34 crores arising to the assessee for A. Y. 2010-11 against outstanding demand for A.Y.2014-15.
Page | 4 The request of the assessee for out of turn hearing is also accepted and the appeal is fixed for hearing on 16.04.2020 which was announced in the open court. The assessee is hereby directed to file the paper book in advance and not to seek any adjournment under any pretext failing which the stay granted to the assessee shall stand vacated automatically.
9. In the result, the stay application is disposeD of in the terms indicated above.
Order pronounced in the open court on 07.02.2020.
Sd/- Sd/-
(BHAVNESH SAINI) (R.K PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
*Neha*
Date:- 07.02.2020
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
Date of dictation 07.02.2020
Date on which the typed draft is placed before the dictating 07.02.2020 Member Date on which the approved draft comes to the Sr.PS/PS 07.02.2020 Date on which the fair order is placed before the Dictating 07.02.2020 Member for Pronouncement Date on which the fair order comes back to the Sr. PS/ PS 07.02.2020 Date on which the final order is uploaded 07.02.2020 on the website of ITAT Date on which the file goes to the Bench Clerk 07.02.2020 Date on which file goes to the Head Clerk.
The date on which file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order Page | 5