BENTLEY SYSTEMS INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX & ANR

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W.P.(C)-9409/2014HC Delhi2014:DHC:746424 December 20143 pages
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What did the High Court hold?

The High Court held that it has the power to extend the stay initially granted by the ITAT until the disposal of the appeal by the ITAT, in exercise of its jurisdiction under Article 226 of the Constitution. The Court reasoned that since the petitioner had already been granted a conditional stay by the ITAT and the appeal was in the process of being heard by the Tribunal, it would be in the interest of justice to continue the stay order. The Court found that the circumstances warranted such an extension, aligning with the principle established in CIT v. Maruti Suzuki (India) Limited, which affirmed the High Court's authority to grant such relief when the ends of justice require it. Consequently, the writ petition was disposed of with the operative direction to continue the stay granted by the ITAT until the disposal of the appeal by the ITAT.

What were the facts?

The petitioner, Bentley Systems India Private Limited, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an order of the Dispute Resolution Panel dated August 16, 2013. The ITAT initially granted a stay on the demand for assessment year 2009-10, conditional upon the petitioner depositing 40% of the demand, amounting to ₹95,68,762. The ITAT later extended this interim stay. However, a Division Bench of the Delhi High Court in CIT v. Maruti Suzuki (India) Limited ruled that the ITAT cannot extend a stay beyond 365 days from the initial grant. As the 365-day period was nearing expiry, and the petitioner's appeal was listed for hearing on January 12, 2015, the petitioner filed a writ petition seeking a stay on the recovery of the balance demand until the disposal of their appeal by the ITAT.

What were the issues?

1. Whether the High Court can grant a stay on the recovery of tax demand till the disposal of an appeal by the ITAT, when the ITAT's power to extend stay is limited to 365 days? Assessee's Contentions: The petitioner argued that the High Court, in exercise of its writ jurisdiction under Article 226 of the Constitution, can extend the stay granted by the ITAT until the disposal of the appeal, citing several High Court orders to this effect. They relied on the decision in CIT v. Maruti Suzuki (India) Limited, which, while limiting the ITAT's power, also acknowledged the High Court's jurisdiction in such matters. The petitioner also highlighted that the appeal was pending before the ITAT and could not be heard earlier due to reasons not attributable to them. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in opposition to the writ petition.

Which sections of the Income-tax Act were involved?

Article 226

AI-generated summary — verify with the full judgment below

WPC 9409/2014

Page 1 of 3

THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 24.12.2014

+ W.P.(C) 9409/2014 & CM 21263/2014

BENTLEY SYSTEMS INDIA PRIVATE LIMITED ... Petitioner

versus

DEPUTY COMMISSIONER OF INCOME TAX & ANR ... Respondents

Advocates who appeared in this case: For the Petitioner : Mr Deepak Chopra with Ms Manasvini Bajpai For the Respondents : Mr Sanjay Kumar

CORAM:-

HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE I. S. MEHTA

JUDGMENT

BADAR DURREZ AHMED, J (ORAL) 1. Issue notice. Notice is accepted by the learned counsel appearing on behalf of the respondents. Since the facts are not in dispute, the matter is taken up for hearing at the first instance itself.

2.

The petitioner has filed an appeal being ITA No. 6161/Del/2013 before the Income Tax Appellate Tribunal being aggrieved by the order passed by the Dispute Resolution Panel on 16.08.2013. The Tribunal, at the initial stage, that is, on 26.12.2013, had granted stay of the demand 2014:DHC:7464-DB

WPC 9409/2014

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which had been raised subsequent to the said order of the Dispute Resolution Panel on the condition that the petitioner deposits 40% of the demand. The petitioner had deposited a sum of ` 95,68,762/- (representing 40% of the demand) and the recovery of the balance demand was stayed.

3.

A subsequent order dated 27.06.2014 was passed by the Tribunal extending the interim stay which it had earlier granted on 26.12.2013. By virtue of the decision of a Division Bench of this Court in CIT v. Maruti Suzuki (India) Limited: [WP(C) 5086/2013] decided on 21.02.2014, it is made clear that the Tribunal has no authority to extend the period of stay beyond a period of 365 days from the initial date of grant of stay. As 365 days would elapse on 27.12.2014, the petitioner cannot approach the Tribunal for any further extension of stay. It is also to be noted that, in the meanwhile, the petitioner’s said appeal before the Tribunal was listed for hearing but could not be taken up for reasons not attributable to the petitioner. Now, the appeal is listed for hearing on 12.01.2015.

4.

It is in these circumstances that the petitioner has approached this Court by way of this writ petition seeking grant of stay of recovery of the balance amount in respect of the assessment year 2009-10 till the disposal 2014:DHC:7464-DB

WPC 9409/2014

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of the appeal by the Tribunal. The learned counsel for the petitioner has placed before us several orders passed by this court, whereby this Court has extended the stay initially granted by the Tribunal till the disposal of the appeal by the Tribunal in exercise of its jurisdiction under Article 226 of the Constitution. In fact, it is settled law that there is no bar for grant of such a relief if the Court is of the opinion that the circumstances and the ends of justice so warrant. This has also been stated clearly in Maruti Suzuki (supra).

5.

We feel that since the petitioner had already been granted conditional stay by the Tribunal in respect of the said appeal and that the Tribunal is in the midst of hearing the appeal, it would be in the interest of justice that the stay order granted by the Tribunal is continued till the disposal of the appeal by the Tribunal. It is ordered accordingly. The writ petition stands disposed of. Dasti under the signature of the Court Master.

BADAR DURREZ AHMED, J

DECEMBER 24, 2014

I. S. MEHTA, J SR 2014:DHC:7464-DB

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