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TMI Blog2021 (1) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... hift in the approach of the field authorities, with a reasonable degree of circumspection. As for the revenue s suggestion to direct the assessee to make payment of 20% of the disputed demands, we find it difficult to understand, much less approve, such a request. It is not for the Income Tax Appellate Tribunal to supplement or support the recoveries by the field officers. Once the Assessing Officer himself has decided not to take coercive measures, for the time being, it cannot be open to us to direct the assessee to pay any part of the disputed demands. When the powers of recovering the disputed taxes are with the Assessing Officer, and when, according to him, there are no fetters imposed on the exercise of such powers, it cannot be open to him to ask anyone else to direct him to exercise these powers. As for the request for an early hearing made by the learned senior counsel, we have taken note of no objection thereto by the revenue authorities and the submission of the learned Departmental Representative that the Assessing Officer is in the process of filing cross-appeal, along with a petition seeking condonation of delay, against the partial relief granted by the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess 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 in the assessment order, concluded that the demerger was not in accordance with the provisions of Section 2(19AA) of the Income Tax Act, 1961, that it was merely a transfer of combination of certain assets and liabilities having a net book value of ₹ 1,721.61 crores which did not constitute business activity. The Assessing Officer was further of the view that as a consideration for this combination of assets and liabilities, with a book value of ₹ 1,721.61 crores, the ABCL had issued 92,02,66,915 shares to the shareholders of the assessee company under the guise of consideration for demerger. The Assessing Officer further computed fair market value of these shares at ₹ 261.20 per share, and the consideration for the transfer of the said combination of assets and liabilities, with a book value of ₹ 1,721.61 crores, thus worked out to ₹ 24037,37,18,918- wrongly stated to be ₹ 24037,37,27,600 in the stay application (i.e., 24,037. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt 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 allowed the assessee concession of paying it in fortnightly installments spread till 28th February 2020. The assessee was not content with this direction as well. In December 2019, the assessee filed a writ petition before Hon ble Bombay High Court, and the relief sought in that writ petition, in substance, was that the respondent Assessing Officer and other income tax authorities do not recover demand arising from the order passed under section 115Q r.w.s. 115O of the Act for the financial year 2017-18 till the disposal of the appeal by the CIT(A) and the orders thereof are received by the assessee and for a period of 8 weeks thereafter . Hon ble Bombay High Court were pleased to admit the said writ petition and grant interim relief stating that we are inclined to continue the protection granted by the order dated 1 October 2019 . This protection was extended on 10th January 2020 and 31st January 2020. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, 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 necessary, of stay on recovery of outstanding demands impugned in appeal before us, and that, in substance, interim directions of Hon ble High Court should be seen in the correct spirit. What he seemed to suggest it, as it would appear to us, the orders of Hon ble Courts above should rather than being treated as a blind man s walking stick, should be treated as the luminosity of the lamp of knowledge, within the edifice of facts of that case, in the light of which a lower judicial authority has to perform its judicial functions. The stand of the field authorities, however, touched a different chord. Learned Principal Commissioner s stand was that the orders of Hon ble High Court could be interpreted in both the ways- while a view could be taken that the interim stay granted by Hon ble High Court is still in operation, it could also be a legitimate view that the interim stay granted by Hon ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase 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 single penny in this case and complete stay has been enjoyed by assessee from date of order i.e.14/03/2019. D. Department has issued substantial refund of approx 1700 crores to assessee s group companies in FY 2019-20 and approx 450 crores in FY 2020-21. Assessee can always seek refund once relief is given by higher appellate authorities. Assessee s contention that it can get relief does not justify non payment of demands. E. Assessee s financial position and that of its group company is sound. As per latest balance sheet, reserve and surplus of assessee company is 37542 crores and consolidated net worth of group companies is 56652 crores. Thus there is no case of genuine financial hardship in this case. In view of above, I would like to request you to strongly contend before ITAT that no stay should be granted in this case. At most, early hearing can be granted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 proceed for filing Interim Application in Bombay High Court for vacating technical stay on recovery of demand arising out of aforementioned orders in WP 3367 of 2019. Interim Application (No 8806 of 2020) in WP 3367 of 2019 has already been filed in Hon'ble High Court and Department is looking forward to mention it before Bombay High Court at earliest. (v) On the other hand, it may also be pointed out that assessee is also aware that stay granted by Hon'ble Bombay High Court can't stand in changed circumstances after disposal of appeal by Ld. CIT(A). That appears to be reason why the assessee has filed stay application before Hon'ble ITAT. (vi) In view of above, Hon'ble Bench may kindly direct assessee to cooperate with department in respect of pending WP no. 3367 of 2019 of assessee before Hon'ble Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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 can avail of the opportunity of approaching this Tribunal. 10. As for the revenue s suggestion to direct the assessee to make payment of 20% of the disputed demands, we find it difficult to understand, much less approve, such a request. It is not for the Income Tax Appellate Tribunal to supplement or support the recoveries by the field officers. Once the Assessing Officer himself has decided not to take coercive measures, for the time being, it cannot be open to us to direct the assessee to pay any part of the disputed demands. When the powers of recovering the disputed taxes are with the Assessing Officer, and when, according to him, there are no fetters imposed on the exercise of such powers, it cannot be open to him to ask anyone else to direct him to exercise these powers. The question of such directions would have relevant on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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