NOVO NORDISK INDIA PRIVATE LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/9487/2015HC KarnatakaKAHC01020157201520 March 2015Bench: ARAVIND KUMAR6 pages
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What did the High Court hold?

The High Court held that while the ITAT cannot extend the stay beyond 365 days due to a statutory bar, the stay granted by the Tribunal deserves to be extended by eight weeks. The Court also directed the Tribunal to dispose of the appeal within six weeks from the next date of hearing.

What were the facts?

The petitioner sought a stay on the recovery of a disputed tax demand of Rs. 109,22,23,790/- for AY 2009-2010, pending appeal before the ITAT. The ITAT had granted an initial stay of six months, which was extended. However, the appeal was not disposed of within the statutory period.

What were the issues?

Whether the High Court can extend an interim stay granted by the ITAT beyond the statutory period when the appeal has not been disposed of due to adjournments not attributable to the assessee. The applicability of the statutory embargo on extending interim stay beyond 365 days.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 144C,Section 254(2A)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 20TH DAY OF MARCH 2015

BEFORE

THE HON’BLE MR.JUSTICE ARAVIND KUMAR

WRIT PETITION NO.9487/2015(T-IT)

BETWEEN:

NOVO NORDISK INDIA PRIVATE LIMITED (A PRIVATE COMPANY LIMITED BY SHARES INCORPORATED UNDER THE COMPANIES ACT, 1956) HAVING ITS OFFICES AT: PLOT NO.32, 47-50 EPIP AREA, WHITEFIELD BENGALURU-560 066. ... PETITIONER

(BY SRI.NAGESWARA RAO FOR SRI.PRADEEP NAYAK, ADVS.)

AND:

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(2) NO.14/3, 4TH FLOOR, RASTOTHANA BHAVAN, (OPP. RBI) NRUPATHUNGA ROAD, BENGALURU-560 001.

…..RESPONDENT

(BY SRI.JEEVAN J. NEERALGI, ADV.)

THIS WRIT PETITION IS FILED UNDER SECTION 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENT TO NOT TO TAKE ANY COERCIVE MEASURES AGAINST THE PETITIONER FOR

RECOVERY OF THE DISPUTED OUTSTANDINGH DEMAND OF RS.94,22,23,790/- FOR AY 2009-2010 DURING THE PENDENCY OF APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU ETC.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R

Heard Sri.Nageswara Rao, learned counsel appearing for the petitioner and Sri.Jeevan J. Neeralgi, learned counsel appearing for the respondent.

2.

Facts which have given cause for filing of this petition can be crystalised as under: Petitioner is an assessee under the Income Tax Act, 1961 (‘the Act’ for brevity). For the assessment year 2009-2010 return of income came to be filed and came to be selected for scrutiny under Section 143(2) of the Act and the jurisdictional Assessing Officer under Section 143(3) of the Act read with Section 144C of the Act passed an assessment order on 30.1.2014 making certain disallowances and tax liability was determined at Rs.109,22,23,790/- which was inclusive of interest.

An appeal came to be presented by the petitioner being aggrieved by the assessment order. Petitioner is said to have deposited Rs.15 Crores on 28.2.2014 before the respondent – authority with a prayer not to recover the balance disputed demand till disposal of the appeal ITA.No.122/Bang/2014 by the jurisdictional Income Tax Appellate Tribunal. An application for stay for recovery of the disputed amount filed before the Tribunal was considered by the Tribunal and an order of stay of tax-demand came to be granted which was in operation for a period of six months by order dated 21.3.2014. Subsequently, on 19.9.2014, stay came to be extended for a further period of six months at the behest of the petitioner.

3.

Grievance of the petitioner is, Tribunal had granted stay for tax-demand raised and Tribunal could not dispose of the appeal within one year as prescribed under Section 254 of the Act and no fault can be attributed to the petitioner for the matter being

adjourned from time to time and as such it is prayed that till appeal is disposed of stay granted by Tribunal be extended. It is contended though matter was being listed before Tribunal on various dates, it came to be adjourned from time to time which was not at the instance of the petitioner – assessee and it is contended that appeal has been heard in part and now listed for further hearing on 24.3.2015, but interim stay which was granted earlier has not been continued by the Tribunal. In view of embargo contained in proviso to Section 254 (2A) of the Act which restricts the Appellate Tribunal from extending the interim stay beyond 365 days. There cannot be any dispute with regard to the proposition that Tribunal does not have power to extend the interim stay granted by it beyond 365 days. For this proposition of law laid down by this Court in the case of Commissioner of Income Tax, Bangalore Vs. Ecom Gill Coffee Trading P. Ltd. Reported in 2014 (305) E.L.T. 328 (Kar.) can be looked up.

4.

Be that as it may. In this instant case, undisputedly the appeal has been admitted by the Tribunal and it has been listed for further hearing on 24.3.2015. On account of there being a statutory bar for the Tribunal to extend the stay beyond 365 days though in the first instance by order dated 21.3.2013 it was held by the Tribunal that appellant has a strong prima facie case and granted stay of tax-demand which was also extended on 19.9.2014, appeal has not been disposed of and it has been adjourned from time to time which was not on account of acts of the petitioner so as to disentitle appellant to claim extension of interim order. Hence, this Court is of the considered view that stay which came to be granted by the Tribunal on 21.3.2014 - Annexure-B deserves to be extended by further period of 8 weeks from the date of its expiry which is 18.3.2015 as per order passed by the Tribunal on 19.9.2014-Annexure-D.

5.

In the result, I proceed to pass the following:

O R D E R (i) Writ Petition is hereby allowed-in-part.

(ii) Interim order of stay granted by the Tribunal in ITA.NO.122/Bang/2014 on 21.3.2014 and extended on 19.9.2014 which has expired on 18.3.2015 stands extended by eight (8) weeks from 18.3.2015. (iii) Tribunal shall dispose the appeal ITA No.122/Bag/2014 within a period of six weeks from the next date of hearing.

Ordered accordingly.

Sd/- JUDGE

RS/*

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