Income Tax Appellate Tribunal - Mumbai
Universal Medicare P.Ltd, Mumbai vs Dcit Cen Cir 3(2), Mumbai on 22 June, 2018
Aayakr ApIlaIya AiQakrNa "F" nyaayapIz maM u b a[- mao .
IN THE INCOME TAX APPELLATE TRIBUNAL " F" BENCH, MUMBAI
BEFORE SRI MAHAVIR SINGH, JM AND SRI G MANJUNATHA, AM
S. A. No.325/Mum/2018
(Arising out of ITA No. 4418/Mum/2016)
(inaQa- a rNa baYa- / Assessment Year 2012-13)
Universal Medicare Pvt. Ltd. DCIT Central Circle -3(2)
Capsulation Premises, Sion Erstwhile Asst. CIT Central
Trombay Road Circle-20
Deonar Vs. R.No.1923, 19 t h Floor,
Mumbai-400 038. Air India Building,
Nariman Point,
Mumbai-400 021.
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
PAN No. AAACU0717B
Revenue by : Suman Kumar, DR
Assessee by : D.V. Lakhani, AR
Date of hearing: 22.06.2018 Date of pronouncement : 22-06-2018
AadoSa / O R D E R
PER MAHAVIR SINGH, JM:
By way of the stay application, the assessee has requested for further extension of the stay, already granted originally on 02.06.2017, extended up to 16.03.2018 vide stay application No.171/Mumbai/2018. The relevant stay order dated 16.03.2018 reads as under:
"1. By way of this stay petition the assessee seeks extension of outstanding demand of tax on interest for assessment year 2012-13 in ITA No.4418/Mum/2016.2
SA N o. 3 2 5/ Mu m/ 20 1 8
2. The Ld. Counsel of the assessee submitted that in the assessee's case, this tribunal had heard the appeal for the assessment years 2006-07 to 2010-11 in December, 2017 and the order is awaited. One of the issues dealt with in those appeals has a bearing on the issue arising in the present appeal. The Ld. Counsel of the assessee submitted that because of this reason, hearing of this appeal has been adjourned. He submitted that there was no fault of the assessee in this regard.
3. Upon hearing both the Counsel and perusing the records, we are extending the stay in this case for a period of 3 months or the date of ITAT order in the aforesaid appeal in the assessee's own case, whichever is earlier. The stay petition is disposed of accordingly.
4. In the result, the assessee's stay application is disposed off as above."
2. In terms of the above, the assessee stated that the Tribunal has granted stay vide order dated 02.06.2017 under the proviso to section 254(2A) of the Income Tax Act, 1961 (hereinafter 'the Act') and the stay was valid f or a period of 180 days from the date of passing of the order. Ld. Counsel explained before us that assessee made third stay application, which was accepted vide order dated 16. 03.2018 granting the stay for a further period of 3 months, which expired on 15.06.2018. The appeal was yet not disposed of f and non-disposal off appeal is not attributable to any default or non -compliance on the part of the assessee. The assessee then prayed that stay may be extended for a further period of 180 days from 15. 06.2018 and also stated that there are no change in the facts which prevail at the time when the original stay order was passed by the Tribunal. Accordingly, assessee requested for stay of outstanding demand of ₹2,25,31,309/-.
3. Ld. Senior D.R. opposed the st ay petition and stated that in terms of the third proviso to section 254(2A) of the Act the stay cannot be extended beyond 365 days even if the delay in disposing 3 SA N o. 3 2 5/ Mu m/ 20 1 8 of appeal is not attributable to the assessee. He referred to the first, second and third pr oviso to section 254 (2A) of the Act, which reads as under:
[Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub -section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order:
Provided further that where such appe al is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period of periods as it thinks fit; so, however, that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any cas e, exceed three hundred and sixty five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed;
[Provided also that if such appeal is not so disposed of within the period allowed under the fir st proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee]].
4. Further, Ld. Sr. D.R. argued that revenue has never asked for adjournment but when he was confronted with the order sheet entry dated 20.06.2018, he could not controvert the order sheet entry recorded. But he maintained that the revenue has not asked for any adjournment. But this plea was without any basis. He also argued that in case extension is granted, it will prejudice to the cause of the revenue.
5. We have heard the rival contentions and gone through the facts and circumstances of the case. Admittedly the last stay order extending 4 SA N o. 3 2 5/ Mu m/ 20 1 8 the stay is 16.03.2018. The original stay was granted vide order dated 02.06.2017 in term of the first proviso to section 254(2A) of the Act. After the stay order dated 16.03.2018 in SA No.171/Mum/2018, the matter was already fixed for hearing on 23.04.2018. On 23.04.2018, assessee's Counsel asked for adjournment for the reason that earlier assessment year 2006-07 was heard and order was awaited and on that basis, matter was adjourned. The relevant order sheet entry reads as under:
"As Counsel orally informed in the court today that earlier A.Y. 2006-07 is heard before the Bench. Order is awaited, therefore requested for adjournment. Hearing is adjourned to 20.6.2018. (a/w CO 260/M/17) As per the direction of the Bench, assessee has filed a letter requesting for adjournment today in the court.
Both parties informed.
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NKP SGD
AM JM
6. We find from the facts of the case that on 11.09.2017 all the appeals were consolidated pertaining to the earlier years i.e. A.Y. 2006-07 to 2010- 11 along with appeal under consideration for assessment year 2012-13. As the appeal for assessment year 2006-07 was heard and the orders were not passed being one of the common issue, the matter was adjourned on 23.04.2018. On 23.04.2018, the appeals were not taken up for hearing as earlier year's order i.e. for assessment year 2006-07 was not passed and has kept the matter for clarification on 20.06.2018. When the matter came up for hearing, Ld. CIT(DR) requested time for filing of complete audited accounts of Aventis Pharms Limited (now known as Sunofi India Limited) along with all schedules and annexures. While adjourning the matter, the Tribunal on 20.06.2018 adjourned the matter by recording the following orders sheet entry:
"Appeal pertaining to assessment year 2012-13 is a stay granted matter. Ld. Sr. Counsel Shri J.D. Mistri pointed out to the communication filed by revenue i.e. audited accounts of the other party, according to him, these are not complete on which revenue is 5 SA N o. 3 2 5/ Mu m/ 20 1 8 relying. He stated that in case revenue do not want to rely, he has no objection. In case revenue want to rely, let the complete statement of account be filed. Apart from this, Ld. Counsel drew our attention to communication of revenue dated 26.10.2017, whereby revenue has requested the assessee to file some of the documents. He pointed out that business purchase agreement excluding annexures which run into 600 pages is already filed. Rest of the items b, c, d & e he is not aware what revenue is asking for. Ld. Counsel for the assessee also made statement at Bar that even these schedules and annexures also can be given to revenue. When these were confronted to, Ld. CIT(DR) Miss. S. Padmaja, she stated that sometime be provided to file complete accounts relating to Aventis Pharma Limited now known as Sanofi India Limited. Apart from this, she made a statement that the application filed by revenue dated 26.10.2017 should be decided first.
We have gone through the petition dated 26.10.2017 and these are the documents in the nature of factual position. Business purchase agreement is already produced by the assessee and whether the other items asked by i.e. item No.b, c d & e are relevant or not can be decided at the time of hearing as and when arguments will progress. There cannot be a separate order and appeal cannot be decided in piecemeal manner. Hence, the plea of Ld. CIT(DR) is quite unreasonable. Hence, we are adjourning this matter, as requested by Ld. CIT(DR). Matter is adjourned to 6.8.2018."
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(G MANJUNATHA) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
7. In such circumstances, we are of the view that on 20.06.2018, the Ld. CIT(DR) requested for adjournment/time to file the details. Reason being these are additional evidences to be filed by revenue. In view of the above, according to us, there is no fault or non-compliance on the part of the assessee. The appeals were yet to be disposed off and non-disposal off appeals cannot be attributed to the assessee.
8. Another aspect argued by Ld. Senior D.R. that the stay cannot be extended beyond 365 days and for this, he relied on the decision of Hon'ble Uttarakhand High Court in the case of Director of Income-tax 6 SA N o. 3 2 5/ Mu m/ 20 1 8 (International Taxation)-II, New Delhi Vs. Seacor Offshore Dubai LLC, wherein it is held as under:
"2. The Bombay High Court rendered its judgment in CIT v. Ronuk Industries Ltd. [2011] 333 ITR 99/203 Taxman 90/15 taxmann.com 369 on 22nd November, 2010 and, thereby, repeated its decision rendered in the case of Narang Overseas (P.) Ltd. v. ITAT [2007] 295 ITR 22/165 Taxman 557 (Bom.), which was rendered on 30th July, 2007 without taking note of the fact that as on 30th July, 2007, the third proviso to sub- section (2A) of Section 254 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") was not in existence, which came to be inserted only with effect from 1st October, 2008. This aspect of the matter, the Tribunal failed to take note of and erroneously held as if it was held in Ronuk Industries Ltd. (supra) that the Tribunal has power to extend stay of demand beyond the period of 365 days even after insertion of third proviso to sub-section (2 A) of Section 254 of the Act. First of all, there is no such pronouncement in Ronuk Industries Ltd. (supra) and, secondly, a statutory authority, which has been granted statutory power, can exercise such power within the four comers of the statute granting such power and in the instant case as on the date when the Tribunal exercised the power of extending stay of demand beyond 365 days, the power of the Tribunal to do so was withdrawn by inserting the proviso in question in the statute."
9. We have also considered the decision of Hon'ble Bombay High Court in the case of CIT Vs. Tata Teleservices (Maharashtra) Ltd. (2017) 81 Taxmann.com 348 (Bombay), wherein the decision considered by Hon'ble Uttarakhand High Court in the case of Seacor Offshore Dubai LLC (Supra) of CIT Vs. Ronuk Industries Ltd. (2011) 333 ITR 99 (Bom), the same was considered by Hon'ble Bombay High Court and granted the stay beyond 365 days by holding that the additions of the words, "even if delay in disposing of the appeal is not attributable to the assessee" substituted by third proviso to section 254(2A) of the Act, has been struck down by Hon'ble Delhi High Court in the case of Pepsi Foods Pvt. Ltd. Vs. ACIT (2015) 376 ITR 87. Hon'ble Bombay High Court after considered the case laws, held as under:
3. We find that the impugned order being concious of the provisions of Section 254(2A) of the Act, granted the extension in view of the Court's orders in "Narang Overseas (P) Ltd. v. ITAT [2007] 295 ITR 22/165 Taxman 557 (Bom.) and "CIT v. Ronuk 7 SA N o. 3 2 5/ Mu m/ 20 1 8 Industries Ltd. F2011] 333 ITR 99/15 taxmann.com 369/203 Taxman 90 (Mag.)(Bom)". The aforesaid decisions have been consistently followed by this Court in "DIT v. Ingram Micro(India) Exports Pte.Ltd.
in Income Tax Appeal (L) No. 137 of 2013rendered on 6 March 2013; DIT (IT) v. St Jude Medical Inc. in Income Tax Appeal (L) No.2121 of 2012 rendered on 1 March 2013; CIT v. PTC Software (India) (P.) Ltd. in Income Tax Appeal (L) No.1927 of 2012 rendered on 28 February 2013, by not entertaining these appeals. Thus the grievance raised appear to stand concluded against the Revenue. In the above view, we were not inclined to entertain the Petitions filed by the Revenue.
4. However, Mr. Suresh Kumar, learned Counsel appearing for the Revenue submits that the view taken by this Court in above decisions would require reconsideration. This is for the reason that all the above decisions have essentially relied upon the decision of this Court in "Narang Overseas (P) Ltd." (supra) which in fact was concerned with the earlier proviso i.e. prior to the substituted third proviso to Section 254(2A) of the Act. It is, therefore, submitted that the decisions relied upon would not apply to the substituted third proviso to Section 254(2 A) of the Act.
5. We find that this Court has consistently taken a view that the Tribunal has power to extend the stay even after the substituted third proviso to sub-section 2A to Section 254 of the Act was introduced. This is evident from all the orders referred to in para 3 hereinabove. The Revenue has not filed appeal against the above orders of this Court in the context of the substituted third proviso to Section 2 54(2A) of the Act. Nothing has been shown to us as to why when the Revenue has accepted the above orders, a different stand is taken in this appeal.
6. In any case the ratio of the decision of this Court in "Narang Overseas (P) Ltd." (supra) would apply even to the substituted third proviso to Section 254(2A) of the Act. The basis of the decision in "Narang Overseas (P) Ltd." (supra) was on the basis of the following:--
'We have considered the object of the amendment and before answering the issue, let us consider the position of law in the matter of grant of interim relief before the amendment. The power to grant interim relief has been recognised by the Supreme Court [See ITO v. M.K.Mohammed Kunhi [1969] 71 ITR 815 (SC)]. We may gainfully reproduce the following paragraph:
"It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Tribunal under S.220(6) and it is only at the earlier stage of appeal before the A AC that the statute provides for such a matter being dealt with by the ITO. It is a firmly established rule that an express grant of statutory power carries 8 SA N o. 3 2 5/ Mu m/ 20 1 8 with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland's Statutory Construction, Third Edition, arts.5401 and 5402). The powers which have been conferred by S.254 on the Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective."
The Supreme Court while disposing of the appeal noted that the Tribunal is not a Court, but it exercises judicial powers and that the Tribunal's powers to deal with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate Court under the CPC. The Supreme Court quoted with approval what Jessel M.R. Said about the powers of the Court of Appeal to grant stay in Polini v. Gray [1879] 12 Ch.D. 438 and we quote :
"It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party in the litigation, that is, the ultimately successful party, is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of appeal before the second trial, as to the Court of last instance before the hearing of the final appeal."
It would, therefore, be clear that the power to grant stay or interim relief has to be read as co-extensive with the power to grant final relief. The object being that in the absence of the power to grant interim relief the final relief itself may be defeated.' This Court thereafter followed the decision of the Apex Court in "CCE \. Kumar Cotton Mills (P) Ltd. 2005 taxmann.com 752 and held that notwithstanding the pre-substituted third proviso to Section 254(2 A) of the Act the Tribunal continues to have powers to grant interim relief.
7. In the above view, therefore, the ratio of the decision in "Narang Overseas (P) Ltd." (supra) would apply even in case of substituted third proviso to Section 254(2A) of the Act.
8. It may be pointed out that the only substantial difference in the pre- substituted third proviso and substituted third proviso to Section 254(2A) of the Act is the addition of the words "even if delay in disposing of the appeal is not attributable to the assessee" These additional words added in the substituted third proviso to Section 254(2 A) of the Act has been struck down by the Delhi High Court "Pepsi Foods (P) Ltd. v. Asstt. CIT (2015) 376 ITR 87/57 taxmann.com 337 ".
10. In view of the decision of Hon'ble Bombay High Court in the case of Tata Teleservices (Maharashtra) Ltd. (supra), there is no fetters on the 9 SA N o. 3 2 5/ Mu m/ 20 1 8 power of the Tribunal to extend the stay beyond 365 days in case there is no default on the part of the assessee in disposing off the appeals or there is no cause attributable to assessee for any default or non- compliance for non-disposal off appeal. In the present case before us, none of the circumstances attribute anything for non-disposal off the appeal to the assessee. According, we extend the stay up to 30.09.2018 and accordingly, the stay application of the assessee is allowed.
11. In the result, the stay application filed by the assessee is allowed.
Order pronounced in the open court on 22-06-2018.
Aado S a kI Gaao Y aNaa Ku l ao mao idnaM k 22-06-2018 kao kI ga[- .
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(G MANJUNATHA) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 22-06-2018
Venu Gopal /Sr.PS
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Copy of the Order forwarded to:
1. The Appellant
2. The Respondent.
3. The CIT (A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai BY ORDER,
6. Guard file.
//True Copy//
Assistant Registrar
ITAT, MUMBAI