Income Tax Appellate Tribunal - Delhi
Giesecke & Devrient Ms India Private ... vs Acit, Circle 10(1), Delhi on 23 December, 2022
Author: G.S. Pannu
Bench: G.S. Pannu
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI FRIDAY BENCH-I : NEW DELHI
BEFORE SHRI G.S. PANNU, HON'BLE PRESIDENT AND
SHRI KUL BHARAT, HON'BLE JUDICIAL MEMBER
Stay Application No.116/Del/2022
(In ITA No. 835/Del/2022)
Assessment Year : 2017-18
M/s Giesecke & Devrient MS Vs. ACIT, CIRCLE 10(1),
India Private Ltd., CR BUILDING, NEW DELHI
Unit No. 906 & 907, DS
Business Galleria Damji
shamji Business Bay, Lal
Bahadur Shastri, Mumbai
Maharashtra-400078
(PAN: AAGCG3207K)
(Appellant) (Respondent)
Appellant by : Shri Harpreet Ajmani, Adv. & Sh.
Pulkit Pandey, Adv.
Respondent by : Shri Sanjay Kumar, Sr. DR.
Date of hearing : 23.12.2022
Date of pronouncement : 23.12.2022
ORDER
Per G.S. Pannu, President :
The captioned stay application has been preferred by the assessee company seeking stay of the outstanding disputed demand of Rs. 15,04,08,800/- pertaining to assessment year 2017-18. 2 S.A. No.116/Del/2022
2. At the time of hearing Ld. Representative pointed that initially the Stay Application came up for hearing on 24.6.2022 and the then Ld. Bench was pleased to fix the corresponding appeal of the assessee on an out of turn basis and no order was passed qua the Stay Application and the same was kept open and tagged alongwith the appeal proceedings.
3. It has been pointed out that presently the appeal of the assessee is fixed for hearing before the regular Bench on 07.02.2023. It was canvassed that the AO has since issued garnishee notice u/s. 226 of the Act dated 28.11.2022 thereby initiating the recovery proceedings for an outstanding demand of Rs. 15,04,08,800/-. In this connection, it has been pointed that the impugned recovery proceedings are misdirected in as much as the stated demand of Rs. 15,04,08,800/- is not enforcible in-toto in view of the order passed by the Assessing Officer u/s. 154 read with section 143(1) dated 11.2.2022 whereby credit for the tax deducted at source on behalf of the assessee (TDS) of Rs. 4,06,31,227/- has been allowed. However, the credit for the same has not been given while putting out the outstanding demand in the recovery notice dated 28.11.2022 (Supra). Apart therefrom, it has been pointed out that the assessee has a good prima facie case to succeed 3 S.A. No.116/Del/2022 before the Tribunal and for that matter he has referred to a Chart of issues which, inter-alia, enumerates the disputes before the Tribunal, namely, TP additions on account of Software Development Services, ITeS-support Services, Intra-group services, Technical support services and Interest on Trade Receivables. Be that as it may, it has been pointed out that if one was to consider the tenability of the addition of Rs. 12,44,69,225/- which has been made by way of TP adjustment on account of intra-group services, the same is prima facie untenable, because the similar issue is covered by the earlier decision of the Tribunal in the case of the predecessor of the assessee M/s G&D India Pvt. Ltd. (Assessee has since merged with the said concern) pertaining to AY 2006-07 & 2007-08. It was pointed out that the demand corresponding to such addition of Rs. 9,44,94,386/- is clearly not enforcible. It was thus, pointed out that considering the non-allowing of credit for TDS in the computation of outstanding demand; and, coupled with the precedent relating to the dispute on account of intra- group services, the recovery proceedings in question are untenable. It was, therefore, contended that the assessee be protected from the recovery proceedings initiated by the AO vide notice dated 28.11.2022 (Supra).
4 S.A. No.116/Del/2022
4. The aforesaid factual matrix has not been controverted by the Ld. DR appearing for the Revenue, but he has merely stated that the disputed demand in question is outstanding.
5. Having considered the rival submissions, we find that the notice u/s. 226 of the Act dated 28.11.2022 (supra) issued by the AO initiating recovery proceedings is quite suspect in as much as the demand outstanding of the assessee has also not been worked out appropriately. Ostensibly, the AO has disposed off the rectification application moved by the Assessee on 11.2.2022 in terms of the directions of the Hon'ble High Court of Delhi in WP(C) 10204/2021 & CM Appl. 31476/2021 dated 16.09.2021 whereby inter alia he has allowed assessee's claim for the credit for TDS of Rs. 4,06,31,227/-. The Ld. Representative for the assessee has referred to the working of the amount of Rs. 15,04,08,800/- stated to be outstanding in the notice dated 28.11.2022 (Supra), which clearly shows that the same is without allowing the credit for TDS of Rs. 4,06,31,227/-. Secondly, it is also not controverted that the dispute corresponding to a tax effect of Rs. 9,44,94,386/- representing addition on account of intra-group services is an issue wherein, assessee has already succeeded before the Tribunal in earlier years. Considering the entirety of circumstances, we deem it fit and proper to restrain the Assessing Officer from adopting 5 S.A. No.116/Del/2022 any coercive measures to recover the disputed demand from the assessee.
6. The aforesaid decision shall operate for a period of 06 months from today or till the date of disposal of the corresponding appeal, whichever is earlier.
7. In the result, the Stay Application is allowed in the aforesaid manner.
Above decision was pronounced in the Open Court in the presence of both the parties today i.e., on 23rd December, 2022.
Sd/- Sd/-
(KUL BHARAT) (G.S. PANNU)
JUDICIAL MEMBER PRESIDENT
SRB
Copy forwarded to: -
1. Appellant.
2. Respondent.
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar