Income Tax Appellate Tribunal - Delhi
Corteva Agriscience Seeds Pvt Ltd, ... vs Dcit, Circle 4(2), New Delhi on 22 January, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'F', NEW DELHI
Before Shri Kul Bharat, Judicial Member
&
Dr. B. R. R. Kumar, Accountant Member
SA Nos.29 to 33/Del/2024
Arising out of ITA Nos. 7655/Del/2016, 1575/Del/2018,
7375/Del/2018, 1422/Del/2023 & 9671/Del/2019
Asstt. Years: 2012-13 to 2014-15 & 2016-17
Corteva Agriscience Seeds P Ltd., Vs The DCIT, Circle 4(2), New Delhi
12th Floor, Atria Block, V-
Ascendas, Plot No. 17, Software
Units Layout, Madhapur,
Hyderabad, Telangana 500081
(APPELLANT) (RESPONDENT)
PAN No. AACCP 3920 F
Assessee by : Sh. Ajay Vohra, Sr. Adv.
Mr. Aditya Vohra, Adv.
Mr. Arpit Goyal, AR
Revenue by : Sh. Kanv Bali, Sr. DR
Date of Hearing: 19.01.2024 Date of Pronouncement: 23.01.2024
ORDER
Per Dr. B. R. R. Kumar:-
Heard the arguments of both the parties and peruse d the material available on record.
2. The break-up of the total outstanding demand is as under:
2SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
AY Section Outstanding Demand (in
Rs.)
2016-17 Order under Section 143(3) 50,08,19,932
2016-17 Penalty order under Section 99,77,25,958
271(1)©
2012-13 Interest under Section 12,07,35,972
220(2)
2013-14 Interest under section 11,04,89,400
220(2)
2014-15 Interest under section 5,69,09,700
220(2)
Total 178,66,80,962/-
3. The assessee filed writ petition no. WP(C) 499/2024 before Hon'ble High Court of Delhi assailing garnishee notices dated 09.01.2024 issued by the Revenue.
4. With regard to the writ petition, the Hon'ble High Court held as under:-
5. Undisputedly, the writ petitioner has been unsuccessful up to the stage of the Commissioner of Income Tax (Appeals) ["CIT(A)"] insofar as the original order of assessment is concerned, with the CIT (A) having dismissed its appeals on 23 October 2019. Subsequently, penalty orders came to be drawn by the Assessing Officer on 05 January 2022 in terms of Section 271(1)(c) of the Act. The aforesaid order has also come to be affirmed by the CIT (A) vide an order dated 23 March 2023.
6. We are however informed that appeals have been preferred by the petitioner against the aforesaid orders and are presently pending before the Income Tax Appellate Tribunal ["ITAT"]. The first of those appeals was instituted as far back as 20 December 2019.
7. The respondent appears to have proceeded further to effect recoveries of the outstanding demand consequent to the dismissal of the appeals by 3 SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
the CIT(A) and being constrained by the limited contours of Section 220(6) of the Act.
8. Mr. Vohra further apprises the Court that in furtherance of the demand which is outstanding, the respondent has also taken over a demand draft of a sum of Rs. 98,85,00,196/-. According to learned senior counsel, the aforesaid demand draft is yet to be ncashed by the Department.
9. Mr. Kumar, learned counsel for the respondent, however, on instructions has apprised us that the said demand draft has already been deposited for encashment.
10. It is in the aforesaid backdrop that a prayer is made that pending the right of the petitioner to take emergent steps before the ITAT to press its applications for stay, the respondent may be restrained from encashing the demand draft which is held, subject to the petitioner ensuring that its bank accounts which form the subject matter of seizure maintain a credit balance of Rs. 79,81,80,766/- [i.e. Rs. 178,66,80,962/- - Rs. 98,85,00,196/-].
11. In view of the aforesaid, we dispose of the writ petition with the following directions:
a.We accord liberty to the petitioner to approach the ITAT forthwith and take appropriate orders for expeditious consideration and disposal of the stay applications in the pending appeals. We further request the ITAT to take up the stay applications and dispose them of with due expedition.
b.For a period of two weeks, we direct the respondent not to encash the aforenoted demand draft which has been recovered, if not already presented for encashment. In case the demand draft has already been submitted, the proceeds thereof shall abide by the orders that the ITAT may pass on the stay applications moved by the petitioner.4
SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
c.The encashment of the demand draft as well as the further rights of the respondent to effect recoveries from the petitioner shall abide by any direction that the ITAT may pass on the stay applications.
d.Till such time as the ITAT disposes of the stay applications, the petitioner shall ensure that the concerned bank accounts maintain a credit balance of Rs. 79,81,80,766/- at all times.
e.Subject to compliance with the above and pending further orders to be passed by the ITAT, the impugned garnishee notices dated 09 January 2024 shall remain stayed.
5. During arguments before us, pertaining to the application of stay of demand, the ld. AR submitted that the demand draft of Rs . 98,85,00,196/- as mentioned in the para 11(b) o f the order of the Hon'ble High Court has already been en-cashed by the Revenue Department.
6. The provisions of section 220(6) read as under:-
(6) Where an assessee has presented an appeal under section 246 [or sectio n 246-A] [ Inserted by Act 10 of 2000, Section 62 (w .e.f. 1.6.2000).] the [Assessing Officer] [ Substituted by Act 4 of 1988 , Section 2, for "
Income-tax O fficer" (w.e.f. 1.4.1988).] may , in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undis posed of.
7. The provisions of section 254(2A) reads as under:-
(2A) In eve ry a ppea l, the Appellate T ribunal, where it is possible , may hea r and decide such appeal w ithin a perio d o f four ye ars from the end of the financial year in which s uch appe al is file d under sub-section (1) or sub-sectio n (2) o f section 253 :5
SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
Pro vide d tha t the Appella te Tribunal may, after considering the merits o f the application made by the assessee , pas s an order of stay in any proceedings rel ating to an appe al filed unde r sub-section (1) of section 253, for a pe rio d no t e xce eding one hundred and eighty days from the date of such order 57[s ubject to the condition that the assessee deposits no t less than twenty pe r cent o f the am ount of tax, inte rest, fee, penalty, o r any other sum payable unde r the pro visio ns o f this Act, or fur nishe s security o f equal amount i n respect the reof] and the Appe llate Tribunal shall dispose of the appe al within the s aid perio d of stay specified in that order:
8. The Hon'ble Supreme Court in the case of ITO vs. M.K.M Kunhi (71 ITR 185) he ld that, Tribunal's power in dealing with appeals are o f widest amplitude and is identical with powers of an appellate Court under Civil Procedure Code . The Hon'ble Cour t held that, when section 254 confers appella te jurisdiction, it impliedly grants power of doing all such act, or employing such means, as are e ssentially necessary to its executio n and that statutory power carried w ith it duty in proper cases to make such orders for staying proceeding as will prevent appeal, if successful from being rendered nugatory. The Hon'ble Court has also emphasized that power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of c ourse in view of the special nature o f taxation and revenue laws. It will o nly be used when a strong prima facie cas e is made out, then the Tribunal will consider whether to stay the recovery proceedings and on what conditions, and the stay w ill be granted in most deserving and appropriate cases only.
6SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
9. The Hon'ble High Court of Bombay in the case of DIT(Exemptio n) Vs. Income Tax Appellate Tribunal, 43 taxmann.com 146, held that, the assessee canno t be prevented to exhaust the legal remedie s available to them and the Revenue Authorities cannot Act in undue haste . The Hon'ble Cour t has also ordered directing the Revenue to refund the amounts colle cted in exercise of extr a ordinary jurisdiction under Article 226 of the Constitution.
10. In the case of MSEB Vs. JCIT (81 ITD 299), the coordinate bench of ITAT at Mumbai directed the refund of the amounts which have been collected showing undue has te, failing the tests of rationality and procedural proprietary. In this case the Tribunal held that, where interest of Revenue ar e not go ing to be prejudiced beyond repair, if Assessing Officer had chosen to await outcome of stay application before the Tribunal.
11. In the ca se of M/s. Tata Communication Ltd. Vs. ACIT, the Special Bench of ITAT at Mumbai, after considering judgments of various Courts viz. Ronak Industries Ltd. [S.A. No. 137/M/2009, dated 22-5-2009] (para 2), Narang Overseas (P.) Ltd. v. ITAT [2007] 295 ITR 22 / 165 Taxman 557 (Bom.) (para
2), Hewlett Packard India (P.) Ltd. v. Addl. CIT [S.A. No . 426 (Delhi) of 2004, dated 16-2 -2005] (para 5), Mahindra & Mahindra Ltd. v. Union of India [1992] 59 ELT 505 (Bom.) (para
5), R PG Enterprises Ltd. v. Dy. CIT [2002] 74 T TJ (Mum.) 391 (para 5), M.S.E.B. v. Jt. CIT [2002] 81 ITD 299 (Mum.) (para
5), Western Agencies (Madras) Ltd. v. Jt. CIT [2003] 86 ITD 462 (Mad.) (para 5), CIT v. B.R. Constructio ns [1994] 73 Taxman 473 (AP) (FB) (para 6), Jethamal Faujimal Soni v. ITAT 7 SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
[Writ Petition No. 1744 (Bom.) of 2010, dated 12-4-2010] (para
7), Asstt. CIT v. Hindustan Mint & Argo Products (P.) Ltd. [2009] 119 ITD 107 (Delhi)(SB) (para 7), SMC Creatio ns v. Asstt. CIT [2008] 304 ITR 319 (Mad.) (para 7), CIT v. Pamwi Tissues Ltd. [2009] 313 ITR 137 (Bo m.) (para 7), C IT v. Gangappa Cables Ltd. [1979] 116 ITR 778 (AP) (para 7), Kanel Oil & Export Inds. Ltd. v. Jt. CIT [2009] 121 ITD 596 (Ahd.) (TM) (para 7), Asstt. CIT v. DHL Operation BV [2007] 13 SOT 581 (Mum.) (SB)(para 9), Central Wines v. ITO [2000] 244 ITR 307 (AP) (para 9), CIT v. Highway Construction Co. (P.) Ltd. [1996] 217 ITR 234 (Gauhati) (para 9), National Textile Corpn. Ltd. v. CIT [2008] 171 Taxman 339 (MP) (para 13), Nirma Industries Ltd. v. Dy. CIT [2006] 283 ITR 402 / 155 Taxman 330 (Guj.) (para 14), General Optics (Asia) Ltd. v. Dy. CIT [2009] 315 ITR 400 (Mad.) (para 15), Addl. CIT v. Gurjargravures (P.) L td. [1978] 111 ITR 1 (SC) (para 15), Natio nal Thermal Power v. IAC [1988] 24 ITD 1 (Delhi)(SB) (para 17), S.RM.AR.RM. Ramanatham Chettiar v. Addl. ITO [1956] 29 ITR 683 (Mad.) (para 20) and Sabeta D etergents Ltd. v. CIT [2001] 248 ITR 385/ 119 Taxman 83 (Ma d.) (para 20), held that, the mode of recovery ado pted by the Asse ssing Officer could not be regarded as a coercive measure taken by him to recover the outstanding demand from the assessee in undue haste and that to with an intention to thwart the stay proceedings before the Tribunal. In the instant case, the stay granted by the Tribunal had already been expired and the application filed by the assessee seeking furthe r extens ion of stay beyond the period of 365 days was referred to the Special Bench in view of the 2008 amendment. The Division Bench, 8 SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
which heard the said stay applications of the assessee initially, was of the opinion that in view of the 2008 amendment, further stay beyond the period of 365 days was not possible after 1-10- 2008. Keeping in view this opinion expressed by the Division Bench, it could reasonably be said that the Assessing O fficer had a justifiable basis to believe that the assessee wa s not entitled to ge t a stay of outstanding demand beyond the period 365 days and with this bona fide belief, he procee ded to re cover the outstanding demand which was pending for more than three years. Moreover, the said recovery was made by him by way of adjustment of refund w hich had become due to the assessee for other years as a result of relief allowed by the Tr ibunal. Holding thus, the Tribunal dismissed the plea of the assessee and held that, is not a fit case to direct the refund of the amount that has been already recovered by the Assessing Offic er.
12. Further, we find that the order of the Hon' ble High Court was dated 12.01.2024, in Writ Petition (C) 499 of 2024 and subse quently, the asse ssee has filed stay application before the Tribunal on 17.01.2024 and no interim order ha s been passed by the Tribunal. The hearing w as conducted on 19.01.2024 by the time the Revenue has already recovered Rs. 98,85,00,196/- towards the o utstanding demand of Rs. 178,66,80 ,962/- by way of de mand dr aft dated 11.01.2024. Thus, we find no infarction of the procedure has occurred before the Tribunal.
9SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
13. We have also examined the parameters to be taken into account while consider ing the grant of stay of dis puted demand. The well settled principles are 'the existence of a prima facie case' , 'financial stringency' and 'the balance of convenience'. The Hon'ble Courts have held that 'Financial str ingency' would include within its ambit the question of 'irrepara ble injury' and 'undue hardship' as well.
14. We have examined various judgments with regard to the taxability of profits earned in cultivation and sale of hybrid seeds of vario us food crops namely, CIT vs. Raja Benoy Kumar Sahas Roy, CIT vs. Monsanto India Ltd., CIT vs. Naamdhari Seeds Pvt. Ltd.
15. With regard to the pleadings and arguments of the ld. AR for refund of the tax collected in excess of 20% o f the de mand, we hold that the provisions of Section 254(2A) co nfers power of stay in any proceedings relating to an appeal filed under sub section (1) of the Section 253, it doesn't confer power o n the Tribunal for directing the tax co llected legally following the due proce dure of law in the absence of any interim stay or directions. Hence, in the abse nce of specific provision o f the Act, and the powers co nferred, the reque st for refund of the tax collected in excess of 20% of the demand cannot be accede d to.
16. Having considere d facts on record, with re ference to the three parame ters, since considerable amount has already been collected by the Revenue, we hereby grant 100% stay o n the entire outstanding demand existing as on 19.01.2024.
10SA Nos. 29 to 33/Del/2024 Corteva Agriscience Seeds P Ltd.
17. We have also considered grating of ear ly hearing to resolve the dispute and on verification of appe al in quantum proceedings, we find that the two cases have already been fixed for hearing on 20/02/2024 and 13/03/2024 hence , no inter ference is called for.
18. In the result, the stay applications of the assessee are allowed.
Order Pronounced in the Open Court on 23/01/2 024.
Sd/ - Sd/-
(Kul Bharat) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 23/01/2024
*NV, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT, DELHI