Vodafone India Services Pvt. Ltd. Vs ACIT (Bombay High Court)
The case of Vodafone India Services Pvt. Ltd. vs ACIT presents a significant moment in tax law jurisprudence. This petition challenges an order by the Income-tax Appellate Tribunal (ITAT) that denied a blanket stay on the recovery of a substantial tax demand. Instead, the tribunal imposed a conditional stay. This article delves into the specifics of the case, the arguments presented, and the court’s final decision.
Background of the Case
Vodafone India Services Pvt. Ltd. (VISPL) sought relief from the Bombay High Court against the ITAT’s order dated July 19, 2021. The ITAT had refused VISPL’s request for an unconditional stay on the collection of tax and interest demands amounting to Rs. 1128.46 crores. These demands were based on an assessment order for the fiscal year 2014-15, issued under Section 143(3) read with Section 144C of the Income-tax Act, 1961.
The ITAT’s order granted a conditional stay, requiring VISPL to pay Rs. 230 crores (approximately 20% of the disputed tax) within 30 days and to furnish a corporate guarantee from an associate company with unencumbered assets exceeding the remaining Rs. 900 crores.
Petitioner’s Arguments
VISPL argued that the tribunal’s decision was inconsistent with previous rulings for similar assessments in earlier years. For instance, during the 2008-09 fiscal year, VISPL faced a high-pitched adjustment of Rs. 6105.44 crores, which was substantially secured by a corporate guarantee from its parent company. VISPL contended that the tribunal should apply a consistent standard and recognize the sufficiency of the previously provided guarantee.
