HPT.DEV.CORPN. vs. DY.COMMR.INCOME TAX

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ITA/14/2004HC Himachal PradeshHPHC01003002200427 July 2009Author: HONOURABLE MR. JUSTICE SURJIT SINGH,HONRABLE MR. JUSTICE R.B. MISRA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that since the main appeals before the Income Tax Appellate Tribunal (ITAT) for the relevant assessment years had been finally adjudicated on March 2, 2006, and March 23, 2006, the interim orders passed by the ITAT in the stay petitions had merged with these final decisions. Consequently, the substantial questions of law that formed the basis for admitting the present appeals before the High Court were no longer alive for adjudication. The Court found that there was nothing left for adjudication in the present appeals. Therefore, the appeals were dismissed as infructuous. All interim orders passed in these cases were vacated forthwith. The Court made no order as to costs.

What were the facts?

The appeals were filed by H.P.T.D.C., Shimla, a Himachal Pradesh Government-owned corporation engaged in the tourism industry, against orders of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. These appeals concerned stay petitions for various assessment years from 1989-90 to 1993-94 and 1997-98. The ITAT, in its order dated May 26, 2004, had partly allowed the stay applications, directing the assessee to pay the demand based on the High Court's decision within three months and staying recovery of the remaining demand pending the Tribunal's disposal of the main appeals. The assessee had paid a portion of the demand as per the ITAT's interim order. Subsequently, the main appeals before the ITAT were decided on March 2, 2006, and March 23, 2006.

What were the issues?

1. Whether the appeals before the High Court, admitted on substantial questions of law concerning interim orders of the ITAT for stay of demand, have become infructuous given that the main appeals before the ITAT have since been adjudicated. (Question of mixed law and fact, turning on the procedural status of the appeals and the merger of interim orders with final decisions). Assessee's Contention: The assessee argued that since the main appeals before the ITAT have been decided, the interim orders passed by the ITAT have merged with the final decisions. Consequently, the substantial questions of law formulated by the High Court for consideration in these appeals have become moot, rendering the present appeals infructuous. Revenue's Contention: The revenue did not deny the factual submission made by the appellant's counsel regarding the adjudication of the main appeals by the ITAT and the consequent merger of interim orders. Therefore, no specific argument was recorded for the revenue on this point.

Which sections of the Income-tax Act were involved?

Section 24,Section 260-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA

ITA No. 14 of 2004 along with ITA Nos.15, 16,17,18, 19 & 20 of 2004. Date of decision: 27.7.2009

ITA No. 14 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates.

ITA No. 15 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates. ITA No. 16 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates. ITA No. 17 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates.

ITA No. 18 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent.

2 For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates. ITA No. 19 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates. ITA No. 20 of 2004 H.P.T.D.C, Shimla

….Appellant.

Vs Dy. Commissioner, Income Tax

….Respondent. For the Appellant:

Mr. Vishal Mohan, vice counsel For the Respondent: Mr. Vinay Kuthiala and Mrs. Vandana Kuthiala, Advocates.

Coram:

The Hon’ble Mr. Justice R. B.Misra, Judge.

The Hon’ble Mr. Justice Kuldip Singh, Judge

Whether approved for reporting?1 ________________________________________________________

ORDER OF COURT

The present appeals above mentioned have been preferred under section 24 of the Expenditure Tax Act, 1987 read with Section 260- A of the I.T.Act, 1961 in reference to the orders of ITAT Chandigarh B- Bench in stay petition No.2 of 2004 for the Assessment Year 1989-90, stay petition No.3 of 2004 for the Assessment year 1990-1991, stay petition No.4 of 2004 for the Assessment year 1991-92,stay petition No.5 of 2004 for the Assessment year 1992-93, stay petition No.6 of 2004 for the Assessment year 1997-98, stay petition No.7 of 2004 for the Assessment year 1997-98 and stay petition No.8 of 2004 for the 1 Whether reporter of local papers is allowed to see the judgment? Yes.

3 Assessment year 1993-94. In the operative part of the order dated 26th May, 2004 passed by the ITAT, interim applications for the stay of the above mentioned, were partly allowed, with the following observations as indicated in para 7 of the impugned order dated 26th May, 2004. “7. Taking into account the totality of the facts and circumstances of the case, we are of the view that the demand payable on the basis of the decision of the Hon’ble High Court should be paid by the applicants to the department within a period of three months from the date of this order. Since the exact demand payable on the basis of the order of the High Court is not available to us we direct the Assessing Officer to determine the demand and recover the same in accordance with law. The recovery of the remaining demand is stayed till the disposal of appeals by the Tribunal. The undertaking that to the extent of such demand the FDRs owned by the applicants shall not be appropriated, shall continue to stand. We direct accordingly.”

2.

Being aggrieved, the appellant, a Corporation, wholly owned by the Government of HP, where, 100% of the share capital is owned by the Himachal Pradesh Government and the Corporation is engaged in the business of running of various Hotels, Restaurants and Transport for the purpose of development of the Tourism industry in the State of HImachal Pradesh, filed the present ITAs before this Court for the assessment years right from 1989-90 to 1993-94, 1997-98 and 1998-99, the Assessing Officer has raised the demands under the Expenditure Tax Act against which the appeals were pending adjudication with the Income Tax Appellate Tribunal ( in short ‘ITAT), Chandigarh Bench, Chandigarh, namely ETAS,1,2 and 3/1993 and ETA No 1/1997 and further ETA Nos. 1 and 2 of 2004. 3. According to learned counsel for the appellant, the appellant has satisfied the demand as has been indicated in paragraph above. However, it has also been submitted that the appeals above mentioned

4 have also been decided by ‘ITAT’ on 2nd March, 2006 and 23rd March, 206. in respect of ITA Nos. 1,2, and 3/Chandi/2004 Assessment years 1997-98, 98-99, 1993-94 and ETAs No. 1,2 & 3/Chandi/93 and ETA 1/Chandi/97 in respect of the assessment years 1989-90, 1990-91, 1991- 92 and 1992-93 respectively.

3.

According to the learned counsel for the appellant, for consideration of substantial questions of law, as indicated in the separate petitions, the present appeals were admitted.

4.

Since against the interim order passed in the stay applications by ‘ITAT’ in respect of different assessment years, above appeals were admitted and now main appeals have since been finally adjudicated by the ITAT, therefore, the interim orders have also merged into the final decisions of main appeals. As such, at present, there remains nothing for adjudication in respect of the substantial questions of law formulated by this court vide orders dated 5.12.2006. These factual aspects have not been denied by Mr. Vinay Kuthaila, learned counsel for the respondent.

5.

In these circumstances, present appeals have now become infructuous. Accordingly the same are dismissed being infructuous. No orders as to cost. All interim orders passed in these cases from time to time stands vacated forthwith. This order is to be kept on record of all the Appeals.

( R.B. Misra ),

Judge.

( Kuldip Singh ),

Judge. 27th July, 2009(sl)

5

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