THE PR. COMMISSIONER OF INCOME TAX -6 vs. MSD PHARMACEUTICALS PVT. LTD.

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ITA/157/2022HC DelhiDLHC01003512202019 May 20223 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals. It noted that the substantive appeals filed by the Revenue on a similar issue had previously been dismissed by the High Court, relying on its own judgment in Pepsi Foods (P.) Ltd. vs. Assistant Commissioner of Income-tax. Furthermore, the Supreme Court had dismissed the Revenue's Special Leave to Appeal in Deputy Commissioner of Income-tax vs. Pepsi Foods Ltd. The Supreme Court's ruling clarified that the third proviso to Section 254(2A) of the Income-tax Act should be read such that any order of stay stands vacated after the expiry of the stipulated period only if the delay in disposing of the appeal is attributable to the assessee. Given this Supreme Court judgment, the High Court found no substantial question of law arising for consideration in the present appeals. Therefore, the appeals were dismissed.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax-6 (Appellant/Revenue) challenging the orders dated September 20, 2019, passed by the Income Tax Appellate Tribunal (ITAT) in SA No.915/Del/2019 and SA No.916/DEL/2019. These orders related to Assessment Years 2010-11 and 2011-12. The Revenue contended that the ITAT had wrongly granted a stay beyond the stipulated 365 days under Section 254(2A) of the Income Tax Act, 1961, especially as the ITAT order did not explicitly attribute the delay solely to the Department. The respondent, MSD Pharmaceuticals Pvt. Ltd. (Assessee), stated that the appeals had become infructuous as the ITAT had subsequently disposed of the substantive appeals on merits.

What were the issues?

1. Whether the ITAT wrongly granted a stay beyond the aggregate period of 365 days as stipulated under Section 254(2A) of the Income Tax Act, 1961, when the delay in disposing of the appeal was not solely attributable to the Department? (Question of law) Assessee's contentions: - The appeals have become infructuous as the ITAT has subsequently disposed of the substantive appeals on merits. Revenue's contentions: - The ITAT wrongly granted stay beyond the aggregate period of 365 days as stipulated under Section 254(2A) of the Income Tax Act, 1961. - The ITAT order does not explicitly reflect that the delay is solely attributed to the Department.

Which sections of the Income-tax Act were involved?

Section 254(2A)

AI-generated summary — verify with the full judgment below

$~26 & 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 157/2022 THE PR. COMMISSIONER OF INCOME TAX -6 ..... Appellant Through: Mr. Ruchir Bhatia, Senior Standing Counsel for Income Tax Department along with Ms. Mansie Jain, Advocate. versus MSD PHARMACEUTICALS PVT. LTD. ..... Respondent Through: Ms. Rashmi Chopra and Ms.Vatsala C. Chaturvedi and Ms.Sonali, Advocates. + ITA 158/2022 & CM APPL. 23605/2022 THE PR. COMMISSIONER OF INCOME TAX -6 ..... Appellant Through: Mr. Ruchir Bhatia, Senior Standing Counsel for Income Tax Department along with Ms. Mansie Jain, Advocate. versus MSD PHARMACEUTICALS PVT. LTD. ..... Respondent Through: Ms. Rashmi Chopra and Ms.Vatsala C. Chaturvedi and Ms.Sonali, Advocates. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 19.05.2022 CM APPL. 23605/2022 in ITA 158/2022 (for exemption) Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of accordingly. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:29:33

ITA 157/2022 ITA 158/2022 Present appeals have been filed challenging the order dated 20th September, 2019 passed in SA No.915/Del/2019 in ITA No.1423/Del/2015 and SA No.916/DEL/2019 in ITA No.1382/Del/2016 for the Assessment Years 2010-11 and 2011-12 respectively. Learned counsel for the Appellant states that the Income Tax Appellate Tribunal (‘ITAT’) has wrongly granted stay beyond an aggregate period of 365 days as stipulated under Section 254(2A) of the Income tax Act, 1961 (hereinafter referred to as ‘the Act’) particularly when the ITAT order does not explicitly reflect that the delay is solely attributed to the Department. Learned counsel for the respondent, who appears on advance notice, states that the present appeals have become infructuous as the ITAT has subsequently disposed of the appeals on merits. Admittedly, the earlier appeals filed by the Appellant-Revenue on a similar issue were dismissed by this Court relying on the judgment of this Court in Pepsi Foods (P.) Ltd. vs. Assistant Commissioner of Income-tax, [2015] 376 ITR 87 (Delhi). Recently, the Supreme Court has dismissed the Special Leave to Appeal filed by the Revenue being Deputy Commissioner of Income-tax vs. Pepsi Foods Ltd., [2021] 126 taxmann.com 69 (SC). The relevant portion of the Supreme Court judgment is reproduced hereinbelow:- “25. The law laid down by the impugned judgment of the Delhi High Court in Pepsi Foods Ltd. (supra) is correct. Resultantly, the judgments of the various High Courts which follow the aforesaid This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:29:33

declaration of law are also correct. Consequently, the third proviso to Section 254(2A) of the Income-tax Act will now be read without the word "even" and the words "is not" after the words "delay in disposing of the appeal". Any order of stay shall stand vacated after the expiry of the period or periods mentioned in the Section only if the delay in disposing of the appeal is attributable to the assessee. The appeals of the revenue are, therefore, dismissed.” In view of the aforesaid judgment, no substantial question of law arises for consideration in the present appeals. Accordingly, the present appeals are dismissed. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J MAY 19, 2022 j This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:29:33

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