Case Law Details
Google India Private Limited Vs ACIT (ITAT Bangalore)
The ITAT has granted an extension of stay period to IT giants Google India citing a reason for the delay in non-disposal of appeal.
In the given case, the assessee has filed the Stay Petition for extension of stay of outstanding demand. However, the revenue has challenged the above stay order passed by the Tribunal before the Hon’ble High Court.
The learned Authorized Representative submitted that the delay in non-disposal of appeal is not attributable to the assessee and the case was posted for hearing on 6.11.2019 and 18.11.2019, but the appeal could not be heard due to paucity of time.
Further, the learned Authorized Representative emphasized, that the delay in non-disposal of appeal is not attributable to the assessee. And if the delay is not attributable to the assessee, the Tribunal has power to extend the period of stay even beyond the time limit laid down in 3rd proviso to Section 254(2A) of the Income Tax Act, 1961
Hence the balance of convenience lies in favour of the assessee for extending the stay as the assessee has complied with the directions of the Tribunal and the Hon’ble High Court in payment of instalments. Accordingly, we extend the stay of outstanding demand for a further period of six months from the date of this order or disposal of the appeal whichever is earlier.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee has filed the Stay Petition Nos.22 to 24/Bang/2020 in IT(TP)A Nos.2890/Bang/3430/Bang/2018 & IT(IT)A No.97/Bang/2019 for extension of stay of outstanding demand.
2. The learned Authorized Representative submitted that originally the stay was granted by the Tribunal in S.P. Nos. 286/Bang/2018 and 18 and 19/Bang/2019 vide order dt. 21.02.2019 subject to payment of Rs.475 Crores in four installments. However, the revenue has challenged the above stay order passed by the Tribunal before the Hon’ble High Court of Karnataka, and Hon’ble High Court has reduced the payment in 3 installments and the assessee has duly complied with the directions of the Hon’ble High Court in paying the installments. Subsequently, the stay order was extended in S.P. Nos.238, 239 & 240/Bang/2019 Dt. 9.8.2019 for a period of six months from the date of the order or till disposal of the appeal. The learned Authorized Representative submitted that the delay in non-disposal of appeal is not attributable to the assessee and the case was posted for hearing on 6.11.2019 and 18.11.2019, but the appeal could not be heard due to paucity of time. Further on 8.1.2020 the appeal was adjourned by the Bench to 19.2.2020.Accordingly the appeals are posted for hearing on 19.2.2020 and prayed for extension of stay. Whereas the learned Departmental Representative objected for extension of stay and insisted for payment of taxes. The Ld DR further submitted that as per Section 254(2A) of the Act, the stay cannot be extended beyond 365 Days by the Tribunal. In the Rejoinder, the LdAR placed Reliance on Decision of Hon’ble Delhi High Court Pepsi Foods (P) Ltd. Vs. ACIT 376 ITR 87 (Del) and ITAT, Bangalore Bench Decision in the case of M/s. SAP Labs (I) Pvt. Ltd. Vs. ACIT (67 taxmann.com 78) (S.P. No.58/Bang/2014 Dt. 8.1.2016)
3. We heard the rival submissions and perused the material on record. The learned Authorized Representative emphasized, that the delay in non-disposal of appeal is not attributable to the assessee. The Hon’ble Delhi High Court in Pepsi Foods (P) Ltd. Vs. ACIT (Supra) and ITAT, Bangalore Bench in the case of M/s. SAP Labs (I) Pvt. Ltd. Vs. ACIT (Supra) has held that, if the delay is not attributable to the assessee, the Tribunal has power to extend the period of stay even beyond the time limit laid down in 3rd proviso to Section 254(2A) of the Income Tax Act, 1961 (in short ‘the Act’). We consider appropriate to extract below the observations of Hon’ble Delhi High Court in Pepsi Foods (P) Ltd. Vs. ACIT (Supra) :
“ 24. Furthermore, the petitioners are correct in their submission that unequals have been treated equally. Assessees who, after having obtained stay orders and by their conduct delay the appeal proceedings, have been treated in the same manner in which assessees, who have not, in any way, delayed the proceedings in the appeal. The two classes of assessees are distinct and cannot be clubbed together. This clubbing together has led to hostile discrimination against the assessees to whom the delay is not attributable. It is for this reason that we find that the insertion of the expression – ‘even if the delay in disposing of the appeal is not attributable to the assessee’– by virtue of the Finance Act, 2008, violates the non- discrimination clause of Article 14 of the Constitution of India. The object that appeals should be heard expeditiously and that assesses should not misuse the stay orders granted in their favour by adopting delaying tactics is not at all achieved by the provision as it stands. On the contrary, the clubbing together of ‘well behaved’ assesses and those who cause delay in the appeal proceedings is itself violative of Article 14 of the Constitution and has no nexus or connection with the object sought to be achieved. The said expression introduced by the Finance Act, 2008 is, therefore, struck down as being violative of Article 14 of the Constitution of India. This would revert us to the position of law as interpreted by the Bombay High Court in Narang Overseas (supra), with which we are in full agreement. Consequently, we hold that, where the delay in disposing of the appeal is not attributable to the assessee, the Tribunal has the power to grant extension of stay beyond 365 days in deserving cases. The writ petitions are allowed as above.”
The Hon’ble Delhi High court decision was followed by the ITAT, Bangalore Bench in the case of M/s. SAP Labs (I) Pvt. Ltd. Vs. ACIT (Supra) held at Para 23 to 25 which is read as under :
3. We have given a very careful consideration to the rival submissions. We are of the view that the Hon’ble Karnataka High Court in the case of Ecom Gill Coffee (supra) has not dealt with the constitutional validity of the 3rd proviso to Sec. 254(2A) of the Act. The Hon’ble Court only held that Tribunal has no power to extend stay beyond a period of 365 days in view of the clear language of 3rd proviso to Sec.254(2A) of the Act and that statutory tribunals have to follow the statutory provisions as it is. As rightly contended on behalf of the Assessee when once the 3rd proviso has been held to be unconstitutional by the Hon’ble Delhi High Court (the decision of Delhi High Court is later in point of time to that of the Hon’ble Karnataka High Court) then the 3rd proviso to the extent that it lays that extension of order of stay cannot be granted beyond 365 days “even if the delay in disposing of the appeal is not attributable to the assessee”, has to be considered as not existing in the statute book, in a case where such default is not attributable to the Assessee. The decision referred to by the learned counsel for the Assessee clearly the support the plea raised by the learned counsel for the Assessee.
24. We are also of the view that the decision rendered in the case of Narang Overseas (supra) by the Honible Bombay High Court was prior to the insertion of the 3rd proviso to Sec.254(2A) of the Actand the reference to the said decision by the Hon’ble Delhi High Court in the case of Pepsi Foods Ltd. (supra) is only in the context of the legal position that ought to be but for the insertion of the 3rd proviso to Sec.254(2A) of the Act. As rightly submitted by the learned counsel for the Assessee, the existence SP No58/Bang/2014 of all conditions for grant of stay has already been considered by this Tribunal and at this stage, new conditions cannot be imposed. As rightly submitted by the learned counsel for the Assessee, the non-existence of financial hardship cannot be conclusive in the matter. In any event these parameters have already been tested by the Tribunal when it originally granted an order of stay subject to certain conditions.
25. For the reasons given above, we direct that there shall be an order of stay of recovery of outstanding demand for a period of 180 days from this day or till disposal of the appeal of the Assessee by the tribunal, whichever is earlier.
Hence, we are unable to agree with the contentions of Ld DR. We, considering the facts and circumstances and the stay petition filed by the assessee, hold that the delay in non-disposal of the appeal is not attributable to the assessee. Hence the balance of convenience lies in favour of the assessee for extending the stay as the assessee has complied with the directions of the Tribunal and the Hon’ble High Court in payment of instalments. Accordingly, we extend the stay of outstanding demand for a further period of six months from the date of this order or disposal of the appeal whichever is earlier. We order accordingly.
4. In the result, the S.P. Nos. 22 to 24/Bang/2020 filed by the assessee are allowed.
Pronounced in the open court on the date mentioned on the caption page.
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