9911796707
TMI Blog2021 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany approved a 'composite scheme of arrangements' between the assessee company, Aditya Birla Nuvo Ltd (ABNL), and Aditya Birla Capital Limited (ABCL)- which was earlier known as Aditya Birla Financial Services Ltd (ABFSL). Under this scheme, the ABNL was to merge with the assessee company, and, subsequently, the financial services business (FSB) was to be demerged to ABCL. This composite scheme of arrangement was approved by the National Company Law Tribunal on 1st June 2017, and, under the said scheme, the merger became effective from 1st July 2017, and the FSB demerger to ABCL became effective from 4th July 2017. Prior to this merger, ABCL was a subsidiary of ABNL, but as the ABNL itself merged into the assessee company, it became a subsidiary of the assessee company. Prior to the merger, ABNL held 9.77% shares of one Aditya Birla Finance Limited (ABFL) and the remaining 90.23% shares therein were held by ABCL. When the demerger of the financial services business took place, these 9.77% shares were also transferred to ABCL. The Assessing Officer probed this composite scheme of the arrangement, collected the information under section 133(6), and, for the detailed reasons set out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had moved an application under section 220(6) before the Assessing Officer praying that the assessee be treated "as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of". Pending decision on this application, the assessee filed a writ petition before Hon'ble Bombay High Court, and Their Lordships, vide order dated 1st October 2019, were pleased to direct the Assessing Officer to dispose of the said petition, and further direct the Assessing Officer that in the event of his deciding this matter against the assessee, "no coercive proceedings would be adopted by the Revenue for a period of two weeks". Vide order dated 18th October, 2019, the Assessing Officer rejected the request for a blanket stay and directed the assessee to pay 20% of the outstanding demand within 30 days of the receipt of the impugned order. The assessee further moved to the Principal Commissioner of Income Tax, having administrative jurisdiction over the Assessing Officer, and, vide order dated 21st November 2019, learned PCIT also directed the assessee to pay 20% of the disputed demand but allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition was put to the learned senior counsel, it could not be said that there was any stay in operation so far as collection and recovery of disputed demands, during the pendency of litigation before this Tribunal, was concerned. We asked both the parties to address us on these proposition put by us. Learned senior counsel was also asked to address us on whether this Tribunal has the powers to grant a stay on collection/ recovery of demands impugned in appeal before the Tribunal unless the assessee makes partial payment of at least 20% of the disputed demands are paid. 6. Learned senior counsel has made very elaborate and illuminating arguments, which is his hallmark anyway, on all these points and also several other peripheral legal issues, though, for the reasons we will set out in a short while, it is not even necessary to deal with these erudite arguments. Learned Departmental Representative, on the other hand, made equally valiant and passionate effort to demonstrate that the stay order granted by the Hon'ble High Court is no longer in operation, that the payment of at least 20% of disputed demands by the assessee is a precondition for our grant, even if so consider it necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that stay given by Honorable High Court in its order dated 01.10.2019 was in context of section 220(6) of income tax Act, 1961, which deals with powers of AO to give stay against recovery of demand for appeals pending before CIT(A). Since appeal is not pending before Ld. CIT(A) anymore, contention of assessee lacks merit as relief given can't go beyond relief sought by assessee. Further mere fact that assessee itself has approached ITAT for stay on recovery of demand goes on to show that assessee is not convinced of applicability of stay granted by High Court in light of above stated facts. B. Further, CIT(A) has given substantial relief to assessee of approx 2000 crores as confirmed demand is approx 3800 crores against original demand of approx 5800 crores. As per CBDT Circulars, 20 % of demand is to be paid for granting stay when appeal is pending before CIT(A). In case of confirmed demands, 100% of demand is required to be paid/collected. After decision of CIT(A), merit of case and sustainability of demand is well established. C. Substantial time has lapsed of more than 20 months since order was passed by AO in this case in March 2019. Assessee has not paid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If we look at the substance of writ petition 3367 and stay granted by Hon'ble Bombay High Court in original order dtd: 01.10.2019 in WP No 1405 of 2019, it is evident that writ petition 3367 of 2019 filed by assessee was to seek stay in recovery proceedings till disposal of first appeal and 8 weeks thereafter, which was pending at that time before Ld. CIT(A). Therefore stay granted by Hon'ble Bombay Court in WP 3367 of 2019 could not travel beyond disposal of first appeal by Ld. CIT(A) and 8 weeks thereafter. (ii) In the unprecedented circumstances arising from covid pandemic, hearing in High Court could not take place in WP 3367 of 2019 for a period of several months and therefore technically stay granted by Hon'ble Bombay High Court was also extended. (iii) Now, in this situation, if we look at substance of matter, it can be concluded that stay is not operational. However, at same time, there exists an order dtd: 12.12.2019, 10.01.2020 and 31.01.2020 in WP 3367 of 2019 which continues because hearing could not be take place in High Court. (iv) In view of the above circumstances, department has taken a conscious decision not to take coercive actions and to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order declining stay under section 220(6), which is now admittedly infructuous in the light of the appeal having been disposed of by the learned CIT(A), ceases to hold good. This is indeed a welcome approach and reflects the utmost faith in and courtesy with which our taxpayers are being treated. In view of this factual position, we see no need to take a call on merits on this stay petition at this stage. The stay petition is, given the approach adopted by the field authorities, infructuous and must be dismissed as such. 9. We must, however, take this paradigm shift in the approach of the field authorities, with a reasonable degree of circumspection, and, therefore, just in case the field officers change their mind on continuing with such a considerate approach, and to make sure that the assessee is not subjected to coercive recovery measures, without any warning, and thus pre-empting the exercise of powers to grant the stay, if so deemed fit and subject to such conditions as deemed fit, by this Tribunal, we make it clear that before resorting to any coercive measures the Assessing Officer will give at least one week's notice to the assessee, so that, if so advised, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
