CCTEB INDIA PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 AND ANOTHER

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W.P.(C)/7867/2023HC DelhiDLHC01022243202319 July 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA5 pages
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What did the High Court hold?

The High Court disposed of the writ petitions by directing the petitioner to deposit 20% of the total demand of Rs. 56,48,47,520/-, which amounts to Rs. 11,29,69,504/-. Since Rs. 2,14,14,742/- was already secured by the attachment of a fixed deposit with HDFC Bank, the petitioner was directed to deposit the balance amount of Rs. 9,15,54,762/- within four weeks. The HDFC Bank was directed to transfer the amount from the attached fixed deposit to the concerned income tax officer within ten days of receiving communication. The court also clarified that no coercive measures would be taken against the petitioner until the disposal of their appeal by the CIT(A). The CIT(A) was requested to hear and adjudicate the appeal on merits at the earliest. The judgment relied on the CBDT office memorandum F.No. 404/72/93-ITCC dated 31.07.2017 for determining the 20% pre-deposit amount. The court explicitly stated that the writ petitions were disposed of in the aforesaid terms.

What were the facts?

The petitioner, CCTEB INDIA PRIVATE LIMITED, filed three writ petitions before the Delhi High Court challenging demands raised by the Assistant Commissioner of Income Tax, Central Circle 17, for Assessment Years (AYs) 2019-20, 2020-21, and 2021-22. The total demand raised was Rs. 56,48,47,524/-. The Principal Commissioner of Income Tax (PCIT) had called upon the petitioner to pay Rs. 35,42,16,461/-. The petitioner had appealed the assessment order dated 29.07.2022 before the Commissioner of Income Tax (Appeals) (CIT(A)). Initially, approximately Rs. 42 crores in fixed deposits were attached under Section 281B of the Income Tax Act, 1961. This attachment was to dissolve on the hearing date of 31.05.2023. The court directed status quo on the attachment and requested the CIT(A) to expedite the appeal.

What were the issues?

1. Whether the High Court, in its writ jurisdiction, should direct the petitioner to deposit a specific portion of the disputed tax demand pending appeal before the CIT(A)? (Question of mixed law and fact, concerning the powers of the High Court under Article 226 of the Constitution and the principles of granting interim relief in tax matters). 2. What is the appropriate pre-deposit amount to be made by the petitioner to secure the revenue's interest while the appeal is pending before the CIT(A)? (Question of mixed law and fact, involving interpretation of the CBDT's Office Memorandum F.No. 404/72/93-ITCC dated 31.07.2017). Assessee's Contentions: The petitioner argued that the revenue had called upon them to deposit a substantial part of the demand, even though the petitioner had the wherewithal to liquidate the demand if they ultimately failed on merits. They sought a stay on coercive measures. Revenue's Contentions: The revenue stated that a fixed deposit/bank balance of approximately Rs. 42 crores had been attached under Section 281B of the Act, and this attachment was to dissolve on the hearing date. They later clarified that a specific fixed deposit with HDFC Bank, worth Rs. 2,14,14,742/-, remained attached.

Which sections of the Income-tax Act were involved?

Section 281B

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

W.P.(C) 7854/2023
W.P.(C) 7867/2023
W.P.(C) 7954/2023

Read from the judgment's own cause title. This page is filed under one of them.

W.P.(C) 7854/2023 & connected matters Page 1 of 5

$~36 to 38 * IN THE HIGH COURT OF DELHI AT NEW DELHI

Decision delivered on: 19.07.2023 + W.P.(C) 7854/2023 & CM Nos.30285-86/2023

CCTEB INDIA PRIVATE LIMITED

..... Petitioner Through: Mr Sumit Bansal, Mr Udaibir Singh Kochar and Ms Tulna Rampal, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 AND ANOTHER ..... Respondents Through: Mr Zoheb Hossain, Sr Standing Counsel with Mr Sanjeev Menon, Standing Counsel.

+ W.P.(C) 7867/2023 & CM No.30306/2023

CCTEB INDIA PRIVATE LIMITED

..... Petitioner Through: Mr Sumit Bansal, Mr Udaibir Singh Kochar and Ms Tulna Rampal, Advs.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 AND ANOTHER ..... Respondents Through: Mr Zoheb Hossain, Sr Standing Counsel with Mr Sanjeev Menon, Standing Counsel.

+ W.P.(C) 7954/2023 & CM No.30624/2023

CCTEB INDIA PRIVATE LIMITED ..... Petitioner Through: Mr Sumit Bansal, Mr Udaibir Singh Kochar and Ms Tulna Rampal, Advs.

Digitally Signed By:TARUN RANA Signing Date:22.07.2023 14:26:17 Signature Not Verified

W.P.(C) 7854/2023 & connected matters Page 2 of 5

versus

ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 AND ANOTHER..... Respondents Through: Mr Zoheb Hossain, Sr Standing Counsel with Mr Sanjeev Menon, Standing Counsel.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (ORAL): 1. On 31.05.2023, we had heard the matter and, broadly, etched out the contours of the case. For the sake of convenience, the relevant part of the order dated 31.05.2023 is extracted hereafter : “2. Issue notice. 2.1 Mr Zoheb Hossain, learned senior standing counsel, accepts notice on behalf of the respondents/revenue. 3. These petitions concern Assessment Years (AYs) 2019-20, 2020-21 and 2021-22. 4. The demands raised against each of the AYs is set forth hereafter: Assessment Year Demand Raised 2019-20 Rs.2,29,15,046/- 2020-21 Rs.35,59,11,980/- 2021-22 Rs.18,60,20,498/- Total Rs. 56,48,47,524/-

5.

As would be evident from the above, the total demand raised qua the petitioner is Rs.56,48,47,524/-. 6. Counsel for the petitioner says that pursuant to the order of the Principal Commissioner of Income Tax [in short, “PCIT”], the petitioner is now called upon to pay Rs.35,42,16,461/-. 6.1 It is submitted by the counsel for the petitioner that the respondents/revenue have called upon the petitioner to deposit a substantial part of the demand, when, even according to them, the petitioner has the wherewithal to liquidate the demand, if it were to ultimately fail on merits. 7. We are informed by the counsel for the petitioner that the appeal against the assessment order dated 29.07.2022 was lodged with the Digitally Signed By:TARUN RANA Signing Date:22.07.2023 14:26:17 Signature Not Verified

W.P.(C) 7854/2023 & connected matters Page 3 of 5

Commissioner of Income Tax (Appeals) [in short, “CIT(A)”] on 27.10.2022. 8. Mr Hossain, on instructions, says that a fixed deposit/bank balance created by the petitioner amounting to approximately Rs.42 crores stands attached under Section 281B of the Income Tax Act, 1961 [in short, “Act”]. 8.1 Mr Hossain says that the attachment dissolves today. 9. Given this position, for the moment, status quo as to the attachment ordered by the respondents/revenue will continue. 10. Mr Hossain will place the particulars of the fixed deposits created by the petitioner and the bank accounts in which money stands credited, before the court on the next date of hearing. 11. Accordingly, no further coercive measure will be taken against the petitioner, in respect of the demands referred to hereinabove. 12. It is made clear that though this order will not come in the way of CIT(A), he/she is requested to take up the appeal for hearing and disposal at the earliest. 13. The petitioner will be at liberty to place the order passed today before the concerned CIT(A).”

2.

Pursuant to the hearing held on 31.05.2023, Mr Zoheb Hossain, learned senior standing counsel, who appears on behalf of the respondents/revenue, has obtained instructions. 2.1 As a matter of fact, he has placed before us a hard copy of the counter-affidavit, which, we are told, has been filed with the Registry. 3. The counter-affidavit is not on record. However, Mr Sumit Bansal, who appears on behalf of the petitioner, has been provided with a hard copy of the counter-affidavit. 4. Briefly, what emerges is that a cumulative amount of approximately Rs.42 crores, which was available in the fixed deposits maintained by the petitioner with the Standard Chartered Bank, stands released to the petitioner. 5. Mr Hossain says that as of today, the attachment order of the respondents/revenue extends to the Fixed Deposit No.50200025247964 maintained by the petitioner with the HDFC Bank, Lower Parel Branch, Digitally Signed By:TARUN RANA Signing Date:22.07.2023 14:26:17 Signature Not Verified

W.P.(C) 7854/2023 & connected matters Page 4 of 5

Mumbai, worth Rs.2,14,14,742/-. 6. As noticed on the previous date, the total demand raised against the petitioner is Rs.56,48,47,520/-. 6.1 The PCIT had called upon the petitioner to pay a part of the said demand, i.e., Rs.35,42,16,461/-. 7. According to us, 20% of the total demand, i.e., Rs.56,48,47,520/- should suffice, in line with the CBDT office memorandum F.No. 404/72/93- ITCC dated 31.07.2017. Since respondents/revenue are secured to the extent of Rs.2,14,14,742/-, the petitioner will deposit the balance amount, i.e., Rs.9,15,54,762/- so that it reaches a figure of 20% of the demand referred to hereinabove [i.e., Rs.11,29,69,504/-]. 7.1 The petitioner is granted four (4) weeks for this purpose. 8. The aforesaid branch of HDFC Bank, i.e., HDFC Bank, Lower Parel Branch, Mumbai, will transfer the amount available in the said fixed deposit to the concerned officer, upon a suitable communication served upon them, within the next ten (10) days. 9. Learned counsel for the parties say that the writ petitions can be disposed of, in the aforesaid terms. 10. The Commissioner of Income Tax (Appeals) [in short, “CIT(A)”] will hear and adjudicate the appeal preferred against the assessment order dated 29.07.2022, on merits. 11. Needless to add, once deposit is made by the petitioner, no coercive measures will be taken against the petitioner, till the disposal of the appeal. 12. The above-captioned writ petitions are disposed of, in the aforesaid terms. 13. Consequently, the pending applications shall also stand closed. Digitally Signed By:TARUN RANA Signing Date:22.07.2023 14:26:17 Signature Not Verified

W.P.(C) 7854/2023 & connected matters Page 5 of 5

14.

The Registry will scan and upload the copy of the aforementioned counter-affidavit, so that it remains embedded in the case file. 15. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

JULY 19, 2023

Digitally Signed By:TARUN RANA Signing Date:22.07.2023 14:26:17 Signature Not Verified

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