TaxTMI 
TaxTMI 
2013 (10) TMI 1178
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....e strenuously asserts that the stay order stands vacated and, therefore, the revenue has appropriated Rs.208 crores from the account of the assessee, whereas the assessee urges to the contrary. The Tribunal has ordered the revenue to refund this amount. Counsel for the revenue, in his strenuous attempt to defend appropriation of Rs.208 crores by the revenue and assert the illegal nature of the order of refund, submits that stay order dated 13.12.2012, enjoined the assessee not to seek any adjournment and get the appeal finalised on 13.01.2013 or on any subsequent date. The fact that counsel for the assessee prayed for and was granted an adjournment, even if on the ground that a similar dispute was pending before a Special Bench of the Tribunal, the stay order, dated 13.12.2012, stood vacated. The stay order having been vacated by the act of the assessee seeking an adjournment, the revenue was well within its rights to demand and recover the tax due. The Income Tax Appellate Tribunal has no jurisdiction to direct refund of the amount legally appropriated by the revenue, by interpreting the stay order and the order of adjournment, as it does not exercise appellate or revisional powe....
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.... around 50% of the tax demanded emanates from an issue relating to advertising, marketing and promotion expenses, which was referred to a larger Bench of the Income Tax Appellate Tribunal, in the case of LG Electronics India Limited and, therefore, the assessee's counsel was duty bound to bring this fact to the notice of the Tribunal. The Income Tax Appellate Tribunal has made specific mention of this case, while adjourning the case. The mere fact that it recorded that this fact was brought to its notice by counsel for the assessee, has rightly been held to be irrelevant while holding that the case had to be adjourned in order to maintain judicial propriety and judicial discipline. It is further submitted that the Income Tax Appellate Tribunal has clearly held that adjournment was not taken by counsel for the assessee but was granted by the Tribunal in view of pendency of a similar matter before a Larger Bench. It is further submitted that the alleged adjournment is dated 16.01.2013, but the revenue took no action till 26.03.2013 and only at the fag end of the financial year, issued a notice under Section 226(3) of the Act. The sole object of the notice was to meet targets placed u....
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....nal, New Delhi, accompanied by an application for stay of the demand. The assessee also filed an application before the Central Board of Direct Taxes under Mutual Agreement Procedure (MAP). It would be appropriate, at this stage, to point out that Article 27 of the Convention (Treaty) between Governments of United States of America and India, executed for avoidance of double taxation etc. empowers a person considering that actions of one or both of States would result in taxation in contravention of provisions of the convention, irrespective of the remedies provided by domestic law of those States, to present his case to the competent authority of the State of which he is a resident or national. The Convention/Treaty was followed by a memorandum of understanding (MOU) regarding deferment of assessment and/or suspension of collection of taxes was issued. The MOU contemplates that Tax Authorities in India and USA shall retain the right to demand security for deferment of assessment/payment of tax. The security to be furnished in India is an irrevocable bank guarantee. The CBDT has issued instruction No.10/2007, dated 23.10.2007, providing that on receipt of formal request for suspens....
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.... adjournment has been sought by the assessee, beyond 16.01.2013, the stay order stands automatically vacated. A notice was issued under Section 221(1) of the Act, on 22.03.2013, calling upon the assessee to discharge liability for assessment year 2008-09. A perusal of the notice reveals that it does not refer to the vacation of the stay order but alleges that it is not clear whether MAP application has been admitted. However, it appears from the reply filed by the respondents, to the show cause notice, that this matter was discussed with the respondents during meetings in their office, but as noticed above, does not form part of the notice issued to the assessee. It would be appropriate to point out that replies filed by the assessee on 24.03.2013, do refer to the stay order, pendency of a matter before a Special Bench in the case of LG Electronics and that the innocuous adjournment granted on 16.01.2013, cannot be construed as a vacation of the stay order, or an adjournment at the request of the petitioner. The revenue, however, proceeded to appropriate the amount of tax due from the assessee by serving a notice on Standard Chartered Bank. The assessee filed an application under....
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....g a similar issue is pending before a Special Bench. It was for the Tribunal to hear the appeal or adjourn the appeal. The Tribunal choose, instead, to adjourn the appeal as it could not be decided without decision of the reference. The order dated 16.01.2013 must, therefore, be read as the assessee bringing a fact to the notice of the Tribunal and the latter adjourning the case. The endeavour of the revenue to interpret this order as an adjournment claimed by the assessee, in our considered opinion is erroneous as even a prima facie perusal of the order does not indicate any request by counsel for the assessee for an adjournment. This fact apart, it would be appropriate to point out that the show cause notice issued to the assessee does not refer to vacation of the stay order but refers to admission or not of the MAP application, though, it appears that there was some discussion relating to vacation of the stay order during a personal hearing, that preceeded issuance of the notice. If such a discussion had taken place, the officer concerned should have been honest enough to issue a show cause notice on the ground that the stay order stands vacated, a stand that was vehemently urg....