Delhi High Court - Orders
Eglo India Pvt Ltd vs Income Tax Officer Ward 8(1) Delhi And ... on 5 April, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 2580/2023 & CM APPL. 9892/2023
EGLO INDIA PVT LTD ..... Petitioner
Through: Mr Kapil Goel and Mr Sandeep Goel,
Advs.
versus
INCOME TAX OFFICER WARD 8(1)
DELHI AND ANR. ..... Respondents
Through: Mr Sanjay Kumar, Sr Standing
Counsel.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORDER
% 05.04.2023 [Physical Hearing/Hybrid Hearing (as per request)]
1. Pursuant to the order dated 01.03.2023, Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the respondents/revenue, has placed before us the calculations obtained by him. For the sake of convenience, the relevant parts of the order dated 01.03.2023 is set forth hereafter:
"2. This writ petition is directed against various orders passed under Section 220(6) of the Income Tax Act, 1961 [in short, "Act"]. The impugned orders referred to in the prayer clause are the following:
"21.12.2021, 21.09.2022, 24.11.2022 and 14.02.2023"
3. The sum and substance of the petitioner's grievance is that while the reviewing authority, i.e., Principal Commissioner of Income Tax (PCIT) has noticed that the petitioner has a prima facie case and is in financial difficulty, interim protection granted has been made subject to stringent conditions.
4. In order to demonstrate that the petitioner has a prima facie case, Mr Kapil Goel, who appears on behalf of the petitioner, has drawn our attention to the assessment order.
W.P.(C) 2580/2023 page 1 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:11.04.2023 16:49:05 4.1. The petitioner, it appears, had filed its income tax return for Assessment Year (AY) 2018-19, wherein a loss of Rs.1,55,48,905/- was returned. The Assessing Officer (AO), however, assessed the petitioner's income via order dated 09.04.2021 at Rs.9,33,53,854/-. 4.2. Based on this, a demand stands created, to the extent of Rs.3,72,59,700/-.
4.3. The additions that have been made concern disallowance of payment to creditors against the imports which, according to the assessee, are international transactions.
5. Concededly, the AO did not refer the matter to the Transfer Pricing Officer (TPO). The addition made, in this behalf, is Rs.10,59,29,972/-. This aspect has been noticed by the PCIT in the order dated 21.09.2022.
6. Prima facie, even according to us, this addition seems to be flawed. Therefore, if this addition is excluded while calculating the amount that the petitioner should be called upon to pay to progress its appeal, the amount that it would have to deposit for seeking a stay may get substantially reduced.
7. Issue notice.
7.1. Mr Sanjay Kumar accepts notice on behalf of the respondents/revenue.
8. Mr Kumar will return with the calculation as to what would be the amount that the petitioner would have to deposit for the purposes of grant of stay, if the aforementioned addition is excluded. 8.1. Mr Kumar will also inform the court on the next date of hearing as to the amount that the petitioner has already deposited.
9. We may note that Mr Goel says that the petitioner, up until now, has deposited Rs.24,28,226/-.
10 Furthermore, in support of his plea that the authority concerned can lower the bar below 20% of the outstanding demand, reliance is placed on the order dated 20.07.2018, passed in Civil Appeal No.6850/2018, titled Principal Commissioner of Income Tax 5 & Ors. v. M/s LG Electronics India Pvt. Ltd."
2. The calculation placed before us by Mr Sanjay Kumar are also set forth hereafter:
"1. Calculation of amount as per point no.8 of Hon'ble High Court Order
(a) Assessed income 9,33,53,854/-
(b) Less: addition made u/s 92D(3) of the Act 10,59,29,972/-
(c) Assessed Income for the purpose of grant of (-) 1,25,76,118/-
stay as per Hon'ble high Court
(d) Demand would be NIL
(e) Amount would have to be deposit by assessee NIL
for the purpose of grant of stay @20% of (d)
W.P.(C) 2580/2023 page 2 of 4
Signature Not Verified
Digitally Signed By:PREM
MOHAN CHOUDHARY
Signing Date:11.04.2023
16:49:05
2. Amount already deposited by the assessee as per point no.8.1 of Hon'ble High Court Order S.N Challan Amount (Rs.) Remarks o deposit date 1 29.11.2022 16,10,064/- Received from HSBC bank cashier order no.505228 dated 23.12.2022 2 29.04.20222 8,18,162/- Received from HSBC bank cashier order no.504440 dated 14.03.2022 3 28.12.2022 10,473/- Due to adjustments Total 24,38,699/-
3. Having perused the calculations placed before us by Mr Kumar, it is quite clear that if the upward adjustment made qua international transactions is excluded, then the demand against the petitioner would be "nil". 3.1 However, as noted both in our order dated 01.03.2023 and as per the respondents/revenue's calculations, an amount in excess of Rs.24,00,000/- has been deposited by the petitioner.
4. In our order dated 01.03.2023, the sum noted by us, based on the submission of Mr Kapil Goel, who appears on behalf of the petitioner, was Rs.24,28,226/-.
5. The respondents/revenue's calculation, however, shows that the petitioner has, in fact, deposited a higher amount, i.e., Rs.24,38,699/-.
6. Given the what is recorded hereinabove and having regard to the aforementioned judgment of the Supreme Court in LG Electronics India Pvt. Ltd., we are of the view that the interest of justice would be served if the amount deposited by the petitioner, i.e., Rs.24,38,699/- is treated as the amount based on which stay i.e., interim protection against recovery should operate in its favour.
W.P.(C) 2580/2023 page 3 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:11.04.2023 16:49:05 6.1. It is ordered accordingly.
7. The concerned appellate authority, i.e., Commissioner of Income Tax (Appeals), will adjudicate the appeal preferred by the petitioner against the assessment order dated 09.04.2021. The interim protection will operate during the pendency of the appeal.
8. The writ petition is disposed of in the aforesaid terms.
9. Consequently, pending application shall stand closed.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J APRIL 5, 2023 aj Click here to check corrigendum, if any W.P.(C) 2580/2023 page 4 of 4 Signature Not Verified Digitally Signed By:PREM MOHAN CHOUDHARY Signing Date:11.04.2023 16:49:05