PRINCIPAL COMMISSIONER OF IN vs. M/S.SNJ DISTILLERS PVT. LTD.

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TCA/159/2020HC Madras11 September 2020Bench: THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that subsequent developments had rendered it unnecessary to consider the substantial questions of law framed by the Revenue. The Court observed that the appeals were filed challenging interim orders granted by the ITAT on 02.08.2019. It was stated that the assessee had filed appeals before the Tribunal challenging the CIT(A)'s order, and had also filed stay petitions. The Tribunal granted stay without conditions, which would ordinarily remain in force for 180 days. The impugned orders in the appeals were the ones granted on 02.08.2019. Subsequent stay petitions filed by the assessee were either dismissed or orders were passed on them. Since the appeals were challenging interim orders that had been superseded by subsequent events or orders, the High Court held that nothing survived for consideration. Accordingly, the appeals were closed, and the substantial questions of law were left open. No costs were awarded.

What were the facts?

The Revenue filed three appeals (T.C.A.Nos.159, 160 & 284 of 2020) before the High Court of Judicature at Madras, challenging orders passed by the Income Tax Appellate Tribunal (ITAT) dated 02.08.2019 and 25.10.2019. These orders were in relation to stay petitions filed by the assessee, M/s.SNJ Distillers Private Ltd., for assessment years 2015-16, 2016-17, and 2017-18. The assessee's appeals before the ITAT challenged a common order of the Commissioner of Income Tax (Appeals) which confirmed assessment orders under Section 153A read with Section 143(3) of the Income Tax Act, 1961. The ITAT had initially granted stay without conditions. Subsequently, the assessee filed further stay petitions, some of which were dismissed, and others were pending or had been decided by the ITAT.

What were the issues?

The High Court was to decide the following Substantial Questions of Law framed by the Revenue: 1. (T.C.A.Nos.159 & 284 of 2020) Whether the ITAT was legally right in granting an absolute stay of demand collection for six months, without considering rulings of the jurisdictional High Court and Supreme Court, rendering the order perverse? 2. (T.C.A.No.160 of 2020) Whether the ITAT was legally right in granting a stay of recovery until the assessee's debt from a creditor was fully recovered by the Department, thereby violating the first proviso to Section 254(2A) of the Income Tax Act by exceeding 180 days? 3. (T.C.A.No.160 of 2020) Whether the ITAT was legally correct in directing the Revenue to lift bank attachments, when its power under Section 254(2A) is limited to granting stay? Arguments: Assessee: Not recorded in the judgment. Revenue: Contended that the ITAT's orders granting stay were perverse and violated statutory provisions regarding the duration and scope of stay, specifically Section 254(2A) of the Act.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 153(A),Section 143(3),Section 254(2A)

AI-generated summary — verify with the full judgment below

T.C.A.Nos.159, 160 & 284 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.09.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.Nos.159, 160 & 284 of 2020 Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai 600 034. .. Appellant in all cases Versus M/s.SNJ Distillers Private Ltd., 99, Canal Bank Road, C.I.T.nagar, Nandhanam, Chennai 600 035. PAN AALCS9312F .. Respondent in all cases Common Prayer:- Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, ''A'' Bench, in S.P.No.230 & 231/Chny/2019 in I.T.A.No.2194 & 2195/Chny/2019 dated 02.08.2019, S.P.No.291/Chny/2019 in I.T.A.No. 2993/Chny/2019 dated 25.10.2019 for the assessment years 2015-16, 2016- 17 & 2017-18. 1/6 http://www.judis.nic.in T.C.A.Nos.159, 160 & 284 of 2020 For Appellant in all appeal : Mr.T.R.Senthil Kumar Senior Standing Counsel assisted by Ms.K.G.Usharani

For Respondent in all appeal:Mr.Ashok Pathy for M/s.Pass Associates COMMON JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

These appeals, filed by the Revenue, under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity). Challenging the orders passed by the Income Tax Appellate Tribunal, Bench 'A' Chennai ('Tribunal' for brevity) in S.P.Nos.230 & 231/Chny/2019 in I.T.A.No.2194 & 2195/Chny/2019 and S.P.No.291/Chny/2019 in I.T.A.No. 2993/Chny/2019 dated 02.08.2019 and 25.10.2019 for the assessment years 2015-16, 2016-17 & 2017-18, the Revenue has raised the following Substantial Question of Law: T.C.A.Nos.159 & 284 of 2020: ''Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in granting absolute stay of collection of demands for six months, without looking into the jurisdictional High Court and Supreme Court 2/6 http://www.judis.nic.in T.C.A.Nos.159, 160 & 284 of 2020 rulings, simply passed the impugned order which is perverse in nature? T.C.A.No.160 of 2020: 1. Whether on the facts and in the circumstances of the case, the ITAT was right in law in granting stay of recovery, till the debt due to the assessee from his creditor is fully recovered by the Department in satisfaction of its arrear demand, which would have the effect of the ITAT granting stay exceeding 180 days at a stretch, is in violation of the first proviso to Sec.254(2A) of the I.T.Act? 2. Whether the ITAT was correct in law in directing the Revenue to lift the bank attachment, when as per the provisions of Sec.254(2A) the ITAT has been endowed with the power only to grant stay? 2. We have elaborately heard Mr.T.R.Senthil Kumar, learned Senior Standing Counsel assisted by Ms.K.G.Usha Rani, learned Junior Standing Counsel for the appellant / Revenue and Mr.Ashok Pathy, for M/s.Pass Associates, learned counsel accepting notice on behalf of the respondent. 3. In the light of certain subsequent developments, it would not be 3/6 http://www.judis.nic.in T.C.A.Nos.159, 160 & 284 of 2020 necessary to consider the Substantial Questions of Law framed by the Revenue in these appeals. Therefore, the subsequent relevant facts to be noted in this regard are as follows: 3.1. The assessee filed appeals before the Tribunal challenging the common order passed by the Commissioner of Income Tax (Appeals) ['CIT(A)' for brevity] which confirmed the Assessment Order under Section 153(A) read with Section 143(3) of the Act. The assessee also filed Stay Petition in those appeals and the Tribunal granted stay without imposing any conditions. In terms of Rules, order of Stay granted by the Tribunal would remain in force for a period of 180 days. The said period expired and orders impugned in these appeals are the said orders granted by the Tribunal on 02.08.2019. Subsequently the assessee filed Stay petitions in S.P.Nos.61 & 62 of 2020 in respect of Assessment Years 2015-16 and 16-17. The Tribunal by order dated 21.02.2020 dismissed both the said petitions. 3.2.Once again the assessee filed Stay Petitions in No.130, 131 and 4/6 http://www.judis.nic.in T.C.A.Nos.159, 160 & 284 of 2020 132/2020 in respect of all the three assessment years and the Tribunal has passed an order on 29.05.2020. 4. Since these appeals have been filed challenging the interim order granted by the Tribunal dated 02.08.2019, nothing survives for consideration in these appeals. Accordingly these appeals are closed and the Substantial Questions of Law framed for consideration are left open. No costs. (T.S.S.,J) (V.B.S.,J) 11.09.2020 sk Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To Principal Commissioner of Income Tax Central 2, No.108, Mahatma Gandhi Road, Chennai 600 034. T.S.SIVAGNANAM, J. AND 5/6 http://www.judis.nic.in T.C.A.Nos.159, 160 & 284 of 2020 V.BHAVANI SUBBAROYAN, J. sk T.C.A.Nos.159, 160 & 284 of 2020 11.09.2020 6/6 http://www.judis.nic.in

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