PR. COMMISSIONER OF INCOME TAX-6 vs. MOTHERSON SUMI SYSTEMS LTD.

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ITA/893/2017HC DelhiDLHC01325496201725 October 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Revenue was not maintainable. This decision was based on the High Court's prior ruling in Pepsi Foods P. Ltd. v. Assistant Commissioner of Income-Tax and Another (2015) 376 ITR 87 (Del), which had declared the third proviso to Section 254(2A) of the Income Tax Act, 1961, to be unconstitutional. Since the Revenue's grievance was predicated on the validity of this unconstitutional provision, the appeal could not be sustained. Therefore, the appeal was dismissed. No other issues were decided on merits.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-6, is aggrieved by an order of the Income Tax Appellate Tribunal (ITAT). The Revenue's contention is that the ITAT's extension of an interim order beyond the 365-day period stipulated by the third proviso to Section 254(2A) of the Income Tax Act, 1961, is invalid. The assessee, Motherson Sumi Systems Ltd., was represented by none. The High Court noted that the aforementioned third proviso to Section 254(2A) had previously been declared unconstitutional by a decision in Pepsi Foods P. Ltd. v. Assistant Commissioner of Income-Tax and Another (2015) 376 ITR 87 (Del). Consequently, the High Court found the present appeal to be not maintainable.

What were the issues?

1. Whether the extension of an interim order by the Income Tax Appellate Tribunal beyond the period stipulated by the third proviso to Section 254(2A) of the Income Tax Act, 1961, is valid? The Revenue argued that the extension of the interim order beyond 365 days, as per the third proviso to Section 254(2A), is not valid. The Revenue's contention is based on the statutory period prescribed. The judgment does not record any arguments from the assessee. The High Court, however, addressed the maintainability of the appeal based on a prior ruling.

Which sections of the Income-tax Act were involved?

Section 254(2A)

AI-generated summary — verify with the full judgment below

$~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 893/2017 & CM No.38023/2017

PR. COMMISSIONER OF INCOME TAX-6 ..... Appellant Through: Mr. Sanjay Kumar, Standing Counsel with Mr. Rahul Chaudhary, Adv.

versus

MOTHERSON SUMI SYSTEMS LTD.

..... Respondent

Through: None.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA

O R D E R %

25.10.2017

The Revenue is aggrieved by the Tribunal’s order; it contends that the extension of interim order, beyond the period stipulated by the third proviso to Section 254(2A), i.e. 365 days, is not valid. At the outset, it is noticed that the said provision i.e. third proviso to Section 254(2A) was declared to be unconstitutional by the decision in Pepsi Foods P. Ltd. v. Assistant Commissioner of Income-Tax and Another (2015) 376 ITR 87 (Del). At that score, this appeal is not maintainable. The same is dismissed.

S. RAVINDRA BHAT, J

SANJEEV SACHDEVA, J OCTOBER 25, 2017 kks

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