Gujarat High Court
Gspc Gas Company Ltd vs Deputy Commissioner Of Income Tax on 25 March, 2014
Bench: Akil Kureshi, Sonia Gokani
C/SCA/4394/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No. 4394 of 2014
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GSPC GAS COMPANY LTD....Petitioner(s)
Versus
DEPUTY COMMISSIONER OF INCOME TAX....Respondent(s)
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Appearance:
Mr SN SOPARKAR Sr Advocate with Mr B S SOPARKAR, Advocate for the Petitioner
Mr SUDHIR M MEHTA, Advocate for the Respondent(s) No. 1
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CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHI
and
HONOURABLE Ms. JUSTICE SONIA GOKANI
25th March 2014
ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)
Heard learned senior advocate Shri S.N Soparkar for the petitioner and Shri Sudhir Mehta for the Revenue, who appears on a Caveat, for final disposal of the petition.
The petitioner, a Government company, has challenged the action of the Incometax authorities of insisting on petitioner depositing 100% tax demand raised by the Assessing Officer in his order of assessment, pending petitioner's appeal before the CIT [A].
Briefly stated, the facts are that for the A.Y 201112, the Assessing Officer passed order of assessment on 31st January 2014 and made various Page 1 of 4 C/SCA/4394/2014 ORDER disallowances to the tune of Rs. 125.82 Crores [rounded off] and resultantly, raised an additional tax demand of Rs. 60.80 Crores [rounded off] inclusive of interest.
The petitioner desired to appeal against such order and required protection against recovery of the taxes. An application was, therefore, filed before the Assessing Officer for such purpose. In due course, the appeal has also been filed by now. The Assessing Officer passed his impugned order dated 14th March 2014 insisting that the petitioner should deposit entire amount pending such appeal. He noted that during the discussion, the representative of the petitioner did not even agree to deposit 50% of the tax demand. In that view of the matter, referring to the decision of the Apex Court in case of Dunlop India Limited, 154 ITR 172 (SC), he passed the said order.
Learned counsel Shri Soparkar for the petitioner submitted that all the four major additions made by the Assessing Officer were the subject matter which had cropped up in the earlier assessment years also. The disallowance of Rs. 9.62 Crores [rounded off] pertaining to depreciation on intangible assets was decided in favour of the assessee by the CIT [A] in earlier year and it is the Revenue which is before the Tribunal on this issue. Regarding rest of the three issues, counsel submitted that the assessee has a strong prima facie case, in particular with respect to major chunk of addition of Rs. 125.20 Crores towards Page 2 of 4 C/SCA/4394/2014 ORDER unaccounted purchases. Counsel contended that being a Government company, it cannot be expected that gas worth crores of rupees was purchased in cash. The discrepancy has arisen only on account of conversion ratio of 1.695 kg. per cubic meter of gas adopted by the Assessing Officer as against 1.32 kg. per cubic meter of gas presented by the assessee. This issue though decided by CIT [A] in earlier years against the assessee, the same is carried in appeal before the Tribunal. He further submitted that the Tribunal has already heard the appeals and the decision is expected very shortly.
On the other hand, Shri Sudhir Mehta for the Department opposed the petition contending that the Assessing Officer has given cogent reasons for making additions. He drew our attention to the order dated 12th November 2013 passed in Special Civil Application No. 14689 of 201 in which, by an interim formula, the assessee was directed to deposit 50% of the disputed demand, pending the appeal.
Having thus heard learned counsel for the parties and having perused the documents on record, we find that the case is somewhat peculiar. Part of the addition made by the Assessing Officer is not agreed to by the CIT [A] in the earlier years. But, only to keep the issue alive, the Assessing Officer has made the additions. Rest of the additions are disputed by the assessee and similar issues for earlier years are pending before the Tribunal. Learned Page 3 of 4 C/SCA/4394/2014 ORDER counsel has informed us that the decision is likely to be rendered shortly. In any case, the discretion lies with the Assessing Officer to impose such conditions, as found justified in the facts of the case. Such discretion was not governed by the fact whether the assessee agreed to deposit a certain percentage of the tax demand or not. The Assessing Officer had to therefore decide independently whether and to what extent relief was justified.
In the facts of the case, therefore, the petition is disposed of with the following directions :
(a) The petitioner shall deposit 50% of the tax demand before the authorities latest by 21st April 2014;
(b) If in the meantime, the Tribunal decides the tax appeals concerning the assessee for the earlier years and grants any major relief pertaining to the additions made by the Assessing Officer in the current year, it would be open for the petitioner to move the Court for further relief by filing a fresh petition;
(c) In any case, the deposit shall be governed by the decision of CIT [A] in the pending appeal preferred by the assessee.
With these directions, writ petition is disposed of.
{Akil Kureshi, J.} {Ms. Sonia Gokani, J} Prakash* Page 4 of 4