2019 (8) TMI 546 - HC - Income Tax

Extension of time for providing bank guarantee as directed by HC - as directed the parent company shall provide a corporate guarantee for the balance amount under the penalty order which shall subsist till the final disposal of the appeal within a period of three weeks from today - HELD THAT - This court has considered the submissions advanced by the learned counsel for the respective parties. Insofar as the apprehensions voiced by the learned counsel for the respondent are concerned, the same do not fall within the scope of the present application whereby the applicant only seeks extension of the time stipulated by this court for furnishing the corporate guarantee. In fact what the respondents seek is a modification of the judgment and order dated 15.04.2019 by substituting the condition of furnishing corporate guarantee with bank guarantee, which cannot be done in an application filed by the applicant herein. Insofar as the relief prayed for in this application is concerned, in the opinion of this court, the same appears to be reasonable inasmuch as on account of the ensuing vacations the judgment and order was not uploaded till 24th May, 2019, on account of which the applicant was not in a position to do the needful to obtain the corporate guarantee from the parent company which is situated in the Netherlands. Therefore on account of no fault on its part the applicant should not be made to suffer. The application, therefore, deserves to be allowed. The application succeeds and is accordingly, allowed. The time stipulated by this court for furnishing corporate guarantee by its judgment and order is hereby extended till 25th June, 2019.

Summary

Issues: Application for extension of time for providing bank guarantee as directed by the court.

Analysis:
1. The applicant sought an extension of time for providing a bank guarantee as directed by the court in a previous judgment. The court had ordered the parent company to provide a corporate guarantee within three weeks from the date of the judgment.

2. The applicant faced delays in submitting the bank guarantee due to the unavailability of the judgment on the court's website until 24th May 2019. The applicant forwarded a draft corporate guarantee to the third respondent for approval, but it was pending administrative approval. The applicant then requested its parent company to provide the corporate guarantee to show compliance with the court's directions.

3. The parent company executed the corporate guarantee on 11th June 2019 and sent it to the applicant's lawyer, who received it on 14th June 2019. The applicant faced challenges in getting the corporate guarantee stamped through franking from banks, so it was transmitted to the third respondent via email and registered post on 19th June 2019, received by the third respondent on 24th June 2019.

4. The respondent opposed the application, stating that the judgment was clear in requiring the corporate guarantee to be submitted within three weeks from the date of the judgment. They raised concerns about the adequacy of the corporate guarantee provided by the parent company, suggesting a bank guarantee instead.

5. The court noted that the application only sought an extension of time for submitting the corporate guarantee and not a modification of the judgment to replace it with a bank guarantee. Considering the delay in uploading the judgment and the applicant's efforts to comply, the court found the application reasonable and allowed the extension until 25th June 2019. If the third respondent prescribes a specific format for the corporate guarantee, the time limit will be extended by four weeks from the notification of such format.