The Commissioner of Income T vs. M/s.Durr India Pvt. Ltd.,

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TCA/179/2022HC Madras08 February 2024Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that the order under challenge merely extended the stay of demand for a further period of 180 days from the date of receipt of the order or till the disposal of the quantum appeal, whichever was earlier. The Court noted that this order extending the stay had already expired long ago. Consequently, the High Court was of the opinion that no further adjudication was required in the present appeal. The appeal was disposed of, keeping the substantial questions of law raised open to be adjudicated in appropriate proceedings. The Court explicitly stated that it was not expressing any opinion on the merits of the case. No costs were awarded.

What were the facts?

The Revenue, the Commissioner of Income Tax, Chennai, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 29.04.2022 passed by the Income Tax Appellate Tribunal (ITAT), Madras “D” Bench. The ITAT's order was in Special Paper (SP) No.35/Chny/2022, arising from an appeal in I.T(TP) A No.15/Chny/2020, concerning assessment year 2015-16. The ITAT had allowed a stay of demand application filed by the assessee, M/s. Durr India Pvt. Ltd. The impugned order extended the stay for a further period of 180 days or until the disposal of the quantum appeal, whichever was earlier. The Revenue contended that the stay was granted beyond the statutory period of 365 days as stipulated in Section 254(2A) of the Act and that the delay was attributable to the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in granting a stay beyond a period of 365 days, especially when the delay in disposal of the appeal is attributable to the Assessee, which is contrary to Section 254(2A) of the Income Tax Act, 1961? 2. Is not the finding of the Tribunal bad by extending the stay periodically up to 718 days, especially when the statute prohibits granting of stay beyond 365 days and without disposing of the appeal, and by not protecting the interest of the revenue adequately? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. However, the ITAT's order, as quoted in the judgment, noted that the assessee had complied with the conditions of earlier stay orders, paid the demand as directed, and that refunds for various years had been adjusted, reducing the outstanding demand. The ITAT also found that the delay in disposal of the appeal could not be attributed to the assessee, as the appeal's fate hinged on the constitution of a Special Bench. The ITAT relied on the ratio of the Delhi High Court in Pepsi Foods Pvt. Ltd. v. ACIT (376 ITR 87). Revenue's Contentions: The Revenue contended that the ITAT was wrong in granting a stay beyond 365 days, citing Section 254(2A) of the Income Tax Act, 1961. They argued that the delay in disposal was attributable to the assessee and that extending the stay periodically up to 718 days was bad in law, as it violated the statutory prohibition and did not adequately protect the revenue's interest.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 254(2A)

AI-generated summary — verify with the full judgment below

T.C.A.No.179 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 08.02.2024 CORAM THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.179 of 2022 The Commissioner of Income Tax, Chennai.

... Appellant Vs. M/s. Durr India Pvt. Ltd. 471, Second Floor, Prestige Polygon, Anna Salai, Nandanam, Chennai 600 035 ... Respondent PRAYER: Appeal filed under Section 260-A of the Income Tax Act, 1961, against the Order of Income Tax Appellate Tribunal, Madras “D” Bench, Chennai dated 29.04.2022 passed in SP No.35/Chny/2022 in I.T(TP) A No.15/Chny/2020. For Appellant : Mr.T.Ravi Kumar For Respondent : Mr.Arun Karthik Mohan 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.179 of 2022 JUDGMENT (Judgment of the court was made by R. MAHADEVAN, J) Heard both sides and perused the materials available on record. 2. This tax case appeal is filed by the Revenue challenging the order dated 29.04.2022 passed by the Income Tax Appellate Tribunal, Madras “D” Bench, Chennai in SP No.35/Chny/2022 in I.T(TP) A No.15/Chny/2020 relating to the assessment year 2015-16 formulating the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law granting stay beyond a period of 365 days especially when the delay in disposal of appeal is attributable to the Assessee which is contrary to the Section 254(2A) of the Income Tax Act, 1961? 2. Is not the finding of the Tribunal bad by extending the stay periodically upto 718 days especially when the statue prohibits granting of stay beyond 365 days and without disposing of the appeal and by not protecting the interest of the revenue adequately?” 3. By the order impugned herein, the Tribunal allowed the stay application filed by the assessee, after having found thus: “... We find that the assessee has complied with the conditions of earlier stay orders and paid the demand as directed by the Tribunal. It could also be noted that refunds for various years have also been adjusted which has further reduced the outstanding demand. It could also be noted that delay in disposal of appeal could not be attributed to any fault on the part of the assessee since the fate of the appeal hinges on constitution of 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.179 of 2022 Special Bench. Under these circumstances, considering the ratio of Hon'ble Delhi High Court in the case of Pepsi Foods Pvt. Ltd. v. ACIT (376 ITR 87), we extend the stay of demand for a further period of 180 days from the date of this order or till the disposal of the quantum appeal, whichever is earlier. The conditions as stipulated in earlier stay order shall remain intact.” 5. The stay application stands allowed in terms of our above order.” 4. We find that the order under challenge merely extends the stay of demand for a further period of 180 days from the date of receipt of the copy of the order or till the disposal of the quantum appeal whichever is earlier. The said order dated 29.04.2022 extending the stay has also expired, after a long ago. Hence, we are of the opinion that no further adjudication is required in this appeal. 5. In such view of the matter, this tax case appeal stands disposed of, keeping the substantial questions of law raised herein open to be adjudicated in an appropriate proceedings. It is made clear that we are not expressing any opinion on the merits of the case. No costs.

[R.M.D,J.] [M.S.Q, J.] 08.02.2024

Index : Yes / No Speaking / Non-speaking Order Neutral Citation : Yes/No shk/ spp R. MAHADEVAN, J. AND 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.179 of 2022 MOHAMMED SHAFFIQ, J. shk/spp To 1.The Income Tax Appellate Tribunal, Madras D Bench Chennai. 2.The Commissioner of Income Tax, Chennai. 3.The Income Tax Officer Corporate Ward 1(4) 121 MG Road, Chennai - 600 034 4.The Joint Commissioner of Income Tax Transfer Pricing Officer-1 Chennai 600 006. T.C.A.No.179 of 2022 08.02.2024 4/4 https://www.mhc.tn.gov.in/judis

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