TaxTMI 
TaxTMI 
2021 (9) TMI 203
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....d by Respondent No.2 at Annexure-A to the extent it puts a condition of adjustment of future refunds arising to the Petitioner without any limit and to direct the Respondent No.2 to grant unconditional stay of demand against the application filed by the Petitioner dated 10.07.2019 till the disposal of appeal by the Income Tax Appellate Tribunal. (D) Prohibit the Respondent No.1 to recover any amount from the Petitioner No.1 towards the demand raised for AY 2012-13 or 2010-11 or adjust any refunds arising to the petitioner No.1 against the demand of A.Y.2012-13 to 2010-11 till the disposal of appeal by the Income Tax Appellate Tribunal. (D1) Quash and set aside intimations dated 22.07.2019 at Annexure-A1. (D2) Stay the operation of intimations dated 22.07.2019 at Annexure-A1 and Prohibit the Respondent No.1 to recover any amount from or adjust any refunds arising to the petitioner No.1 towards the demand raised for the Assessment Year A.Y. 2012-13 or 2010-11 till the final disposal of appeal by the Income Tax Appellate Tribunal. (E) Pending the admission, hearing and final disposal of this petition, prohibit the Respondent No.1 to recover any amou....
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....ed a fresh application dated 19th August, 2017 before the respondent No.2. 2.14 The respondent No.2, vide his order dated 21st August, 2017, granted stay till 28th February, 2018 or the order of the ITAT whichever would have been earlier but with further condition to adjust the future refunds accruing in favour of the writ applicant No.1 against the demand of A.Y.2012-13. 2.15 On 16th March, 2018, the writ applicant No.1 received a letter, seeking to review the status of the stay. 2.16 On 22nd March, 2018, the writ applicant No.1 filed its reply and further made an application to the respondent No.2 for stay. 2.17 The writ applicant No.1, vide letters dated 14th May, 2019 and 20th May, 2019 respectively sent reminders to the respondent No.2 for passing appropriate order, granting stay. 2.18 The respondent No.1 issued an intimation dated 28th June, 2019 proposing to adjust the refund of Rs. 222,93,38,240/- emanating from the order giving effect to the appellate order for the A.Y. 2014-15 against the outstanding demands of the writ applicant No.1 for the A.Y.. 2012-13 and A.Y. 2010-11. 2.19 The writ applicant No.1, thereafter, preferred a stay application dated 1st ....
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....baxy Laboratories Limited (Now merged with Sun Pharmaceutical Industries Limited) Assessment order for AY 2012-13 u/s.143(3) r.w.s. 92CA r.w.s.144C(13) dated 23.01.2017 Details of covered issues in favour of assessee and working of tax demand Sr.No. Nature of Additions Addition Rs. Covered by Relief in tax Authority Ref. Of Order rate Amount Rs. 1. Upward adjustment on account of transfer pricing 10,35,06,00,000 ITAT ITA No.195/Del/2013 50.80 5,25,84,22,916 2. Deduction under section VI A 80,95,76,144 ITAT ITA No.196/Del/2013 50.80 41,12,89,563 3. Deduction u/s.35(2AB) of the act 4,40,22,43,702 ITAT ITA No.1390/Ahd/2016 50.80 HC of Tax App. No.541/2017 Guj. S.C. SLP21485 of 2018 (Dismissed SLP of department) 2,23,64,75,099 4. Disallowances u/s.14A read with rule 8D 5,45,95,563 ITAT ITA No.1390/2016 50.80 (Ranbaxy Lab, Ltd. 2,77,36,224 5. Disallowance of Marked to Marker losses 6,67,29,40,000 S.C. Suzlon Energy Ltd. 50.80 (2020) 21 Ta....
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....to be recovered. He would submit that unconditional stay may be granted until appropriate decision is taken by the First Appellate Authority, i.e, the ITAT. Mr. Soparkar further pointed out that the notices issued by the respondent No.1 for the purpose of further adjusting the refund of Rs. 336 Crore (A.Y.2012-13) and Rs. 318 Crore (A.Y.2010-11) respectively are erroneous inasmuch as the same would amount to recovering far more tax from his client as against the disputed issues in the assessment order. 9. In the last, Mr. Soparkar also took us through the observations made by the respondent No.1 while declining to grant unconditional stay. Those are as under; Issue Para and issue in order of CIT Submission 1. 12,13: Rate of tax computed should not be 50.80% but 31.5% or 34.62% The Petitioner has computed 50.80% based on tax demand/total income (2004/3946) as per assessment order (at pg. 500). The denominator cannot be 5791.05 as claimed by CIT because net assessed income is 3946 crores only on which tax is levied. 2. 14: TP adjustment is fact-based issue (pg.22) As noted by DRP on page 232, Identical issue of TP adjustment arose in earlier ....
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....peal before it. Mr. Patel also seeks to rely upon a decision rendered by the Madhya Pradesh High Court in the case of Northern Coals Fields Ltd. vs. Asst. Commissioner of Income-Tax & Ors., reported in (2017) 398 ITR 508 (MP). 14. Mr. Patel submitted that the impugned order, imposing condition for adjustment of refund is just, proper and legal as the same is in conformity with the provisions of Section 245 of the Act. He would argue that Section 245 does not provide for any limit so far as the adjustment of refund is concerned. 15. Mr. Patel submitted that the respondent No.2 -PCIT, while passing the impugned order, considered all the aspects relevant for the purpose of deciding the stay application. 16. Mr. Patel submitted that the office memorandums dated 29th February, 2016 and 31st July, 2017 respectively are not applicable to the cases wherein the appeals are pending before the ITAT. The said office memorandums would be applicable only in case where the appeals are pending before the CIT (A). He argued that in the case on hand, as the appeals are pending before the Tribunal, the said two office memorandums would have no application. In such circumstances, referred to ....
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....enses in the sum of Rs. 15,60,70,679/-. The Ld. AR argued that except adjustment towards AMP, all other international transaction of the assessee were accepted by the Ld. TPO to be at Arm's length. He argued that the transaction of AMP does not fail within the ambit of international transaction as defined u/s. 92B of the Act in support of which he placed reliance on the decision of Hon'ble Delhi High Court in the case of Maruti Suzuki India Ltd. vs. CIT (2015) 64 taxmann.com 150 / (2016) 237 Taxmann 256/381 ITR 117 among others. He further stated that the assessee had filed a letter dated 07.03.2018 before the Ld. AO expressing its willingness to pay 20% of the total demand in consonance with the requirement of the recent CBDT Circular dated 29.02.2016 and also gave his consent for adjustment of refunds of the various years for appropriation towards tax arrears of assessment year 2013-14 till the disposal of the appeal by the Tribunal. He also argued that though the said circular would apply only for matters pending before the Ld. CIT(A) , i.e, the first appeal, the impugned appeal before this Tribunal also would have to be construed as first appeal, inasmuch as on the final assess....
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....xercised in a reasonable manner. Here is a case wherein the assessee is sought to be deprived of a huge amount towards the refund. A huge amount towards refund is being declined on the ground that a demand is pending for the previous year. If such unbridled power is assumed by the Revenue to adjust the refund, it would result in a situation where two assessees against whom equal demands are raised will be treated differently. One assessee who has to recover significant amount towards the refunds and another who has not to recover the refunds would be put in two different categories because in the first case refund would be adjusted whereas in the second case, no such adjustment is possible. 22. We are also not impressed by the submission canvassed on behalf of the Revenue as regards estoppel. First, there cannot be any estoppel against the statute. 23. In the last, we may only observe that the writ applicant has raised issues relating to financial hardships. The writ applicant has pointed out that it has suffered losses in earlier four years. In the aforesaid context, we may refer to a decision rendered by the Punjab & Haryana High Court in the case of Jindal Steel & Power Lt....
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....ssment year". The petitioner contends that this liberty to adjust is only in respect and to the extent of the balance of the said 15%, namely, Rs. 26.18 crores which was to be paid in the said installments and on the other it could be to the extent of the entire demand. The Assessing Officer, however, interpreted the order to mean that he was entitled to adjust the refund that the petitioner may be entitled to against the entire demand. This compelled the petitioner to seek a clarification before the Pr.CIT. The Pr.CIT by the said order dated 26.08.2016 referred to the guidelines and to the previous order. In particular a reference was made to Clause-C of the original instructions dated 02.02.1993 which reads as under:- "C. GUIDELINES FOR STAYING DEMAND. (i) ................ (ii) In granting stay, the Assessing Officer may impose such conditions are he may think fit. Thus he may,- a) Require the assessee to offer suitable security of safeguard the interest of revenue; b) Require the assessee to pay towards the disputed taxes a reasonable amount in lump sum or in installments; c) Require an undertaking from the assessee that he w....
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....the CIT(A). The present case does not fall under para(B) either. Clause-4(B)(a) provides that in a situation where the Assessing Officer is of the view that the nature of the addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted, the Assessing Officer shall refer the matter to the Administrative Pr.CIT/CIT who after considering all the relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump-sum payment for granting a stay of the balance For Subsequent orders see CM-11613CWP-2016 13 of 16 demand. Admittedly, a reference under clause 4(B)(a) was not made by the Assessing Officer to the Pr.CIT. In that event, Clause-4(A) alone would operate. As we mentioned earlier, clause 4(A) provides that where the outstanding amount is disputed before the CIT(A), the Assessing Officer "shall" grant stay of demand till disposal of the first appeal on payment of 15% of the disputed demand. In other words, the Assessing Officer is bound to grant a stay of the entire demand on payment of 15% of the disputed demand unless the case falls under category-B of clause-4. The Assessing Officer is not entitled t....
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....nder section 220(6) of the Act. However, in view of the circular dated 02.02.1993 as clarified by the circular dated 21.03.1996 and modified by the Office Memorandum dated 29.02.2016 the Assessing Officer's powers have been circumscribed to the extent provided therein. 29. We quite see the force in Mr. Putney's contention that the department must safeguard its interest and that its interest may be jeoparadized if the petitioner is entitled to avail of the refund and at the same time enjoy the benefit of the stay. However, the Department is bound by the circular as modified by the Office Memorandum. Had the circulars/Office Memorandum not been in force, it may have been a different matter altogether. 30. In the circumstances, the writ petition is disposed of by holding that the petitioner shall be entitled to a stay of the demand subject to its depositing the installments as required by the order dated 14.06.2016 and that the future refunds can be adjusted only to the extent of the balance amount directed to be paid as a condition for the stay. The respondents shall, however, be entitled to withhold the refund(s) upto and including 31.10.2016 to en....
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....g Officer may impose such conditions as he may think fit. He may, inter alia,: (i) require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled; (ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if the assessee has not cooperated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of Section 245." 9. It can thus be seen that under para 4(A) of the O.M., a case where outstanding demand is disputed before the CIT(A) (as in the present case), the assessing officer shall grant stay of demand, till the disposal of the first appeal on payment of 15% of the disputed demand, unless the case falls in category discussed in para 4(B). It is not in dispute that the present case would not fall in the category as provided in para 4(B) of the O.M. and thus, would be governed by para ....