Income Tax Appellate Tribunal - Delhi
Microsoft Regional Sales Corporation, ... vs Assessee on 14 October, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: "FRIDAY-E" NEW DELHI
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
AND
SH.PRASHANT MAHARISHI, ACCOUNTANT MEMBER
S.A.No.-476/Del/2016
(In I.T.A .No.-1553/Del/2016)
(ASSESSMENT YEAR-2012-13)
Microsoft Regional Sales Corporation, Vs DCIT,
C/o-Mr. Aakash Uppal (Director), SRBCC & (International
Associates LLP, 6th Floor, Wing A & B, Taxation),
Worldmark 1, Aero City, Opp. Holiday Inn, Gurgaon
Mahipalpur, New Delhi-110037.
PAN-AADCM1638A
(APPELLANT) (RESPONDENT)
Assessee by Sh. Umesh Chander Dubey, Sr.DR
Revenue by Sh.Sandeep S.Karhail, Adv. &
Sh. Shatanik Chakrabarty, Adv.
Date of Hearing 14.10.2016
Date of Pronouncement 14.10.2016
ORDER
PER DIVA SINGH, JUDICIAL MEMBER
By the present Stay petition moved under Rule 35A of the ITAT Rules, 1963 the assessee prays for extension of stay which was originally granted by the Co-ordinate Bench on 12.04.2016 in S.A.No.208/Del/2015 in ITA No.1553/Del/2016. Extension is sought on the ground that the delay in hearing the appeal is not attributable to the assessee.
2. Addressing the issues, it was submitted that earlier years appeals have been decided by the ITAT in the case of the assessee alongwith appeals of MOL Corporation by a consolidated order dated 26.09.2016. It was stated that although there is some similarity on the issues however there is a fresh issue also in the year under consideration qua "cloud computing" which is required to be addressed.
S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016)
3. Inviting attention to the record, it was submitted by Mr. Sandeep S.Karhail, Adv. that the appeal came up for hearing on 11.05.2016; 02.06.2016; and 22.09.2016. On each of these days the assessee it was submitted was ready to argue, however on 02.06.2016, the Bench was not functional and the appeal was refixed by the Registry. On the remaining 2 occasions, the appeal came up for hearing i.e. on 11.05.2016 & 22.09.2016 and adjournments were sought by the Revenue. 3.1. The following extract of the hand-written order sheet dated 22.09.2016 in ITA No.1553/Del/2016 was read out:-
"Adj. to 24th Oct. 2016 on the written request of CIT DR. Mr. Anuj Arora who seek consolidation with MOL Corporation's Appeal. The particulars to be provided by the Revenue and seek consolidation by way of a petition before the Hon'ble Vice President in the stay granted appeal wherein the stay is stated to be expiring on 07the Oct. 2016. Mr.Anil Sharma, Sr.Dr present. Subject to consolidation the Revenue would be at liberty to pray for an earlier date by way of a petition before the Competent Authority. Mr.Karhail, Adv. for assessee. Read out in the Tribunal."
Sd/- Sd/-
(P.Maharishi) (Diva Singh)
(emphasis provided in the present proceedings)
3.2. Considering the above, Mr. Umesh Chander Dubey, Sr. DR appearing on behalf of the Revenue was required to state whether any application seeking consolidation had been addressed by the Revenue. Ld.Sr.Dr stated that he had no knowledge of any such request. However, reading from the order of the ITAT, it was submitted that as per the facts of the present case, it is a protective assessment. On query, he was unable to state the fate of the appeal where addition has been made on a substantive basis.
3.3. The Ld.AR on query stated that though he is not aware of any petition seeking consolidation having been filed by the Revenue however he was aware that the appeal of MOL Corporation in ITA No.1554/Del/2016 wherein substantive assessment has been made has been filed before the ITAT on 23.03.2016. The said appeal it was stated Page 2 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) has not been listed for hearing till date. It was further clarified that no stay petition has been filed therein before the ITAT as pursuant to the directions of the AO, part payment has been made by that assessee.
3.4. Ld. Sr. DR was required to address whether the Revenue would like to pre-pone the date of hearing from 24.10.2016 to an earlier date. However, Ld. Sr. DR stated that he had no instructions thereon.
4. We have heard the rival submissions and perused the material available on record. We find that the Co-ordinate Bench in S.A.No.208/Del/2016 vide its order dated 12.04.2016 passed the following order:-
5. "We find that the facts of the case in hand are exactly identical to those of A.Y.2011-12. Accordingly, respectfully following the same, we grant stay of the disputed outstanding amount of Rs.33,99,83,903/- in ITA No.1553/Del/2016 for A.Y. 2012-13 for a period of six months or till the disposal of the appeal, whichever is earlier on the same terms and conditions as given in A.Y.2011-12. Registry is directed to fix the appeal for hearing on 11.05.2016. "
(emphasis provided) 4.1. We find from the record that the assessee unlike the assessee in MOL Corporation in ITA No.1554/Del/2016 in the facts of the present case directly approached the ITAT and did not go either before the AO or any of the tax authorities to seek a stay. We further find that it is an undisputed fact that the addition in the facts of the present case has been made on a "protective basis" and the substantive addition has been made in the case of MOL Corporation USA which appeal admittedly has not been listed for hearing. We further find that in the peculiar facts and circumstances of the case where admittedly no recovery proceedings have been carried out by the Revenue since as per the legal jurisprudence protective assessment is permissible, however protective recovery is not permissible which fact has been taken note of by the Co-ordinate Bench in para 4 in the earlier stay order wherein following Page 3 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016) the order dated 17.04.2015 in S.A. No.230/Del/2015 in ITA No.1615/Del/2015 in the case of the assessee itself in 2011-12 AY the legal position was noted. For ready- reference, the aforesaid extract from S.A.No.208/Del/2016 is reproduced hereunder:-
4. "We have heard both the parties and perused the records available with us and especially the contention raised by the assessee in the present Stay Application, we are of the considered view that since the demand raised on the assessee has already been raised on MOL Corporation and the said Demand raised on the assessee is on protective basis. As pointed by the Ld. Counsel of the assessee that 'in the -assessment year 2007-08 and 2008-09 assessee has also filed the Stay Application in the Appeals and this Bench vide order dated 31.12.2011 has also stayed the recovery of due demand. Ld. Counsel further pointed that the ITAT has further granted Stay vide its Order dated 11.4.2014 to the assessee in Stay Application No. 219/Del/2014 (A.Y. 2010-11). As pointed out by the Counsel of the assessee in the present Stay Application that the ITAT has passed favourable orders in assessee's own cases for the asstt. year 1999-2000, 2001-02 dated 26,10.2010, asstt. year 2002-03 to 2006-07 dated 30.11.2011 and A.Yrs.2007-08 to 2008-09 order dated 29.2.2012 and A.Y. 2009-10 order dated 5.7.2013, wherein it has held that the payments received by MRSC from Indian distributors is not taxable in the hands of MRSC as the same has already been taxed in the hands of its group entity, Gracemac Corporation (now MOL Corporation). The Hon'ble High Court of Delhi has affirmed the order of the ITAT for the asstt. year 2009-10 vide its order dated 16.7.2014. Ld. Counsel of the assessee has also cited various judgments rendered by the Hon'ble High Courts supporting the contention of the assessee for granting the Stay Demand in dispute."
4.2. Accordingly in the aforesaid peculiar facts and circumstances of the case noting that balance of convenience is in favour of the assessee and the fact that decision in 2011-12 AY in assessee's own case is available on record, we deem it appropriate after hearing the parties to:-
(a) Extend stay for a period of six months or disposal of appeal whichever is earlier;
(b) Direct the Registry to tag ITA No.1554/Del/2016 alongwith present appeal for hearing on 24.10.2016 and issue notice etc. to the parties post haste as without a decision on the substantive appeal the present appeal cannot be decided; and Page 4 of 5 S.A.No.-476/Del/2016 (In I.T.A .No.-1553/Del/2016)
(c) Direct that no adjournment on any unreasonable ground shall be sought by the assessee.
5. In the result, the stay petition of the assessee is allowed.
The order is pronounced in the open court on 14th of October, 2016.
Sd/- Sd/-
(PRASHANT MAHARISHI) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
*Amit Kumar*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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