PR COMMISSIONER OF INCOME TAX GURGAON vs. M/S JINDAL STEEL & POWER LTD HISAR

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ITA/57/2016HC Punjab & HaryanaPHHC01110650201609 May 2016Author: MR. JUSTICE SURINDER GUPTA,MR. JUSTICE RAMESHWAR SINGH MALIK4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the matter was no longer res integra. It referred to its own previous decisions in STA No.15 of 2015 (Commissioner of Central Excise, Rohtak vs. M/s Voice Telesystem) and Principal Commissioner of Income Tax vs. Carrier Air Conditioning and Refrigeration Limited, ITA No.5 of 2016. In these cases, interpreting provisions pari materia to Section 254(2A) of the Act, the Court had concluded that interim protection can continue beyond 365 days in deserving cases where the delay in disposal of the appeal is not attributable to the assessee, particularly due to the pressure of pendency of cases. The Court relied on the Apex Court's judgment in Commissioner of Customs & Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Limited. Accordingly, the High Court found no error in the impugned order passed by the ITAT and held that no substantial question of law arose.

What were the facts?

The assessee, Jindal Steel and Power Limited, filed its income tax return for assessment year 2008-09. Following assessment proceedings, a penalty under Section 271(1)(c) of the Income Tax Act, 1961, was imposed. The assessee appealed this penalty order to the Commissioner of Income Tax (Appeals), which was dismissed. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT) and also filed a stay application for the outstanding demand of ` 14,10,17,089/-. The ITAT initially granted a stay for six months, which was subsequently extended. The ITAT, by an order dated 8.6.2015, extended the stay for a further period of six months or until the disposal of the appeal, whichever was earlier, relying on a Delhi High Court decision. The revenue appealed this order to the High Court, contending that the ITAT's order contravened the provisos to Section 254(2A) of the Act.

What were the issues?

1. Whether the Hon'ble ITAT has acted in contravention of the Second Proviso of Section 254(2A) of the Income Tax Act, 1961, as the combined period of stay has exceeded 365 days? (Question of law) 2. Whether the order of the ITAT be treated as void ab initio in light of the third proviso to Section 254(2A) of the Income Tax Act, 1961, which provides that stay of demand stands vacated after the expiry of a period of 365 days even if delay in disposal of appeal is not attributable to the assessee? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that the ITAT's order extending the stay beyond 365 days contravened the Second and Third Provisos to Section 254(2A) of the Act. The revenue contended that the stay should have been vacated after 365 days, irrespective of the reasons for the delay in appeal disposal.

Which sections of the Income-tax Act were involved?

Section 254(2A),Section 271(1)(c),Section 115JB,Section 143(3),Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 09.05.2016 The Principal Commissioner of Income Tax, Gurgaon ……Appellant Jindal Steel and Power Limited, Hissar …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MRS. JUSTICE RAJ RAHUL GARG

1.

Whether Reporters of local papers may be allowed to see the judgment?

2.

To be referred to the Reporters or not? YES

3.

Whether the judgment should be reported in the Digest? Present: Mr. Tajender K.Joshi, Advocate for the appellant. Ajay Kumar Mittal, J.

1.

This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 8.6.2015, Annexure A.III passed by the Income Tax Appellate Tribunal, Delhi Bench, New Delhi (Friday) (in short, “the Tribunal”) in Stay Application 327/Delhi/2015 (in ITA No.3052/DEL/2014) for the assessment year 2008-09, claiming following substantial questions of law:- “1. Whether the Hon'ble ITAT has acted in contravention of the GURBAX SINGH 2016.05.23 10:33 integrity of this document High Court Chandigarh Second Proviso of Section 254(2A) of the Income Tax Act, 1961 as the combined period of stay has exceeded 365 days?

2.

Whether the order of the ITAT be treated as void ab initio in the light of third proviso to section 254(2A) of the Income Tax Act, 1961, which provides that stay of demand stands vacated after expiry of a period of 365 days even if delay in disposal of appeal is not attributable to the assessee?”

2.

A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee furnished its return of income for the assessment year 2008-08 declaring income of ` 766,99,04,200/- on 29.9.2008. Subsequently, a revised return of income was filed on 29.3.2010 wherein income of ``766,72,79,900/- was declared and tax was paid under the provisions of Section 115JB of the Act. Assessment under section 143(3) of the Act was completed on 27.12.2010 at a total income of ` 10,33,26,17,034/- and penalty proceedings under section 271(1)(c) of the Act were also initiated. Aggrieved by the assessment order, the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 10.3.2014, the CIT(A) dismissed the appeal. The Assessing Officer imposed penalty under section 271(1)(c) of the Act at ` 28,21,94,177/- vide order dated 28.11.2013, Annexure A.I for the assessment year 2008-09. Against the penalty order, the assessee filed appeal before the CIT(A). Vide order dated 13.3.2014, Annexure A.II, the CIT(A) dismissed the appeal. The assessee had deposited demand of ` 14,11,77,088/- on 29.3.2014 and the balance demand outstanding was of ` 14,10,17,089/-. Against GURBAX SINGH 2016.05.23 10:33 integrity of this document High Court Chandigarh the order passed by the CIT(A) under section 271(1)(c) of the Act, the assessee filed appeal before the Tribunal. Original stay of demand application was also filed by the assessee before the Tribunal praying for staying the outstanding demand of ` 14,10,17,089/- as penalty under section 271(1)(c) of the Act. The Tribunal granted stay vide order dated 16.6.2014 for six months. The assessee filed further application for extension of second stay of demand. The Tribunal granted stay upto 15.6.2015 vide order dated 20.2.2015. The assessee filed another application for extension of stay of demand. The Tribunal vide order dated 8.6.2015, Annexure A.III extended the stay for a further period of six months or till the disposal of the appeal whichever was earlier by relying upon the decision of the Delhi High Court in Pepsi Foods Pvt. Limited vs. ACIT, 2015-TIOL-1306 HC-DEL-IT. According to the appellant-revenue, the decision of the Tribunal is not in accordance with law as it is contrary to the second and third provisos to section 254(2A) of the Act. Hence the instant appeal by the revenue.

3.

We have heard learned counsel for the appellant-revenue.

4.

The matter is no longer res integra. While interpreting the provisions of Section 35C(2A) of the Central Excise Act, 1944 which is pari materia to section 254(2A) of the Act, this Court in STA No.15 of 2015 (Commissioner of Central Excise, Rohtak vs. M/s Voice Telesystem) decided on 20.1.2016 after considering the relevant case law on the point concluded that wherever the appeal could not be decided by the Tribunal due to pressure of pendency of cases and delay in the GURBAX SINGH 2016.05.23 10:33 integrity of this document High Court Chandigarh disposal of the appeal is not attributable to the assessee in any manner, the interim protection can continue beyond 365 days in deserving cases. Reference was made to the judgment of the Apex Court in Commissioner of Customs & Central Excise, M/s Voice Telesystem's case (supra) had held similar view.

5.

Accordingly, we do not find any error in the impugned order passed by the Tribunal. Thus, no substantial question of law arises. The appeal stands dismissed. (Ajay Kumar Mittal) Judge May 09, 2016 (Raj Rahul Garg) 'gs' Judge GURBAX SINGH 2016.05.23 10:33 integrity of this document High Court Chandigarh

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