Indus Towers Ltd. Vs ACIT (Delhi High Court)
The issue raised is that of gross suppression and misstatement by the petitioner, which led to a false projection of the outstanding liability/ refund due from/ to the petitioner.
It is pointed out by Mr. Raghvendra Singh that the petitioner was required to file a consolidated return in respect of the merged entity i.e. the petitioner, which was filed by the petitioner for the assessment year 2011-12.
The petitioner had, in the said return, computed the net taxable income (loss) as Rs.(–)1 1,977,945,558/-. The assessment order computes the taxable income after making several additions and disallowances, Rs. 1994,56,00,488!- which is under challenge before the CIT (A). Pertinently, even if the consolidated financial statement furnished by the petitioner were to be accepted as true and correct, the Minimum Alternate Tax (MAT) liability worked out by the petitioner itself is Rs.2,247,073,334/-. Pertinently, the petitioner itself computed the book profit at 1127,45,45,714/- and on that basis, the petitioner would be liable to pay tax of Rs. 2,247,073,334/-. This is the minimum tax liability that the petitioner would have to incur. It could be higher, if the additions! disallowances result in net taxable income increasing.
Even if the Assessing Officer were to accept the consolidated return, as filed by the petitioner, or the said appeal were to be accepted by the CIT (A), admittedly, its liability would be to the tune of Rs.2,247,073,334/-. However, the petitioner, while circulating the aforesaid tabulation at the initial hearing of the petition, projected the “Tax on Returned Income” as Rs. 69,83,85,442/- on the assumption that its returned income was Rs. 2 10,24,62,383/-, and without accounting for the several additions and disallowances made by the Assessing Officer. Pertinently, in the Assessment order, the figure of Rs. 69,83,85,442/- is nowhere to be seen. If the petitioner were to be fair to the Court, the petitioner would have reflected the amount of Rs. 2,247,073,334/ – which was the minimum tax liability of the petitioner, assuming that its return based on the consolidated financial statement, were to be accepted.
Similarly, against the column indicating the “Tax on admitted liability (Returned Income)”, the said amount of Rs. 2,247,073,334/- would have been reflected, which would have completely changed the equation that was projected before us by the petitioner.
The explanation furnished by Mr. Balbir Singh, learned senior counsel for the petitioner for not disclosing the MAT tax liability, is that the Assessing Officer had not accepted the return on MAT basis and, therefore, the said amount was not reflected.
We do not find any weight in this submission. Since, the MAT liability, even according to the petitioner, was the higher of the two figures i.e. the tax on the net taxable income (as returned by the petitioner), and the MAT amount, the petitioner could not have run away from the fact that its liability was, at least, if not more than Rs. 2,247,073,334/-. Thus, we were clearly misled by the petitioner at the preliminary hearing of the petition which led to our passing the interim order.
Considering the fact that the petitioner has invoked the discretionary extraordinary writ jurisdiction of this Court, the petitioner was expected to approach this Court with clean hands, which, unfortunately, we find is completely lacking in the present case. We are, therefore, not inclined to exercise our discretionary writ jurisdiction in favour of such a petitioner. Accordingly, we dismiss this petition with costs quantified at Rs. 5 lakhs to be paid to the Delhi High Court Advocates’ Welfare Trust.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
C.M. No. 42494/2019
1. Exemption allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(C) 10289/2019 and C.M. No. 42493/2019
3. We have heard learned senior counsel for the petitioner as well as learned senior standing counsel for the respondent. On 23.09.2019, we had passed the following order in the petition:
“Issue notice. Mr. Raghvendra Singh accepts notice. Counter-affidavit be filed within six weeks. Rejoinder be filed before the next date of hearing.
We have heard learned Senior counsel for the petitioner as well as learned senior standing counsel for the department at substantial length on the interplay of Section 220(6) and the Office Memorandum dated 29.02.2016 issued on the subject of partial modification of Instruction No. 1914 dated 21.03.1996 to provide for guidelines for stay of demand at the first appeal stagD. WILIKLctiVLI 620F6)LusQsLI he exLILsLiVnX“amVLI t in 1(iL utX”, the OfficeJfl 2IVLFn1(LI 0 1(Pte1( 2QG2.P01G uses the ex[SessiVVLR1(emaG1( 1(ispuGe1( GL VSe WHT(A)E,HI1(emaI1( &,7 1(iLputX” an1( D1(isGute1( 1(VSXn1(I. ThG ePpDessiLI us71(1-ILl th[ aforesaid office memorandum require interpretation in the light of Section 220(1) and 220(6).
The issue is, whether, in terms of the O.M. dated 29.02.2016, the petitioner is required to deposit 20% of the demand raised by the respondent of Rs. 690.73 crore, or 20% of the tax on the amount in dispute. The submission of learned senior counsel for the petitioner is that 20% of the tax on amount in dispute (i.e. the amount assessed minus the amount returned) already stands paid/ credited. The issue raised in this petition would require deeper consideration.
Considering the aforesaid, we restrain the respondents from taking any coercive action against the petitioner for recovery of the demanded amount. This is subject to the condition that the petitioner shall not seek any adjournment of the hearing of the appeal pending before the CIT (A). The Ld. CIT (A) may proceed to adjudicate the appeal uninfluenced by this order. In case, the said appeal is decided before the next date, we make it clear that this interim order shall merge in the order that the CIT(A) may pass.
List on 17.01.2020.”
4. This order had been passed by us on the basis of a tabulation placed before us by learned senior counsel for the petitioner on the said date, which is on record. The said tabulation is relevant, and reads as follows:
“TAX CALCULATION AS PER ASSESSED INCOME
