THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 15.05.2013
+ WP (C) 3183/2013
UNITECH LIMITED ..... Petitioner
versus
ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 18, NEW
DELHI & OTHERS ..... Respondents
Advocates who appeared in this case:
For the Appellant : Mr C. S. Aggarwal Sr. Advocate with Mr Prakash
Kumar, Advocate.
For the Respondent : Ms Suruchi Aggarwal, Advocate
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM No.6044/2013 (exemption)
Exemption is allowed subject to all just exceptions.
WP (C) No.3183/2013 and CM No.6043/2013
1. This writ petition is directed against the order dated 08.05.2013 passed by
the Commissioner of Income Tax which is similar to the earlier order passed by
the said Commissioner on 11.02.2013. Both these orders pertain to the stay
granted to the petitioner in respect of the demand raised against the petitioner
WP (C) No.3183/2013 Page 1 of 7
pursuant to the assessment order dated 01.08.2012. The petitioner has filed an
appeal, which is pending before the Commissioner of Income Tax (Appeals) and
the petitioner has already argued the matter and submitted detailed written
submissions before the Commissioner of Income Tax (Appeals). The remand
report requested from the Assessing Officer which was earlier not complete, has
now, according to learned counsel for the respondents, been completed. This is,
however, disputed by the learned counsel for the petitioner.
2. On 11.02.2013, the Commissioner while considering the stay application
of the petitioner had concluded as under:-
"3. I have gone through the petition filed by the
assessee and discussed the same with the representative of
the assessee, the order of stay of demand passed by the
Additional CIT Rang 18 and the instructions of 1914
issued by CBDT for recovery of outstanding tax demand.
I am of the opinion that there are exceptionally and
compelling circumstances as the assessment order appears
to be high pitched and a genuine hardship is likely to be
caused to the asessee, this order is being passed by the
undersigned. As elaborated in the order dated 16/11/2012
passed by the Additional CIT Range-18 the undisputed
demand amounts to Rs. 369 crore. In any case, the
assessee has to pay the entire undisputed demand
immediately but looking into the hardship which may
cause to him and the fact that the securities having face
value more than total tax demand have already attached by
the Department the following arrangement is made:
(i) The disputed demand which amount to Rs. 665
crore is stayed till 31/3/2013. The assessee is
advised to cooperate and file details before the
learned CIT(A) so that his appeal is decided at an
early date.
(ii) Out of undisputed demand of Rs. 369 crores
the assessee should pay at least 30 crore more till
the end of the Financial Year 2012-13 in equal two
WP (C) No.3183/2013 Page 2 of 7
instalments of Rs. 15 crore each. In case he is not
able to pay 15 crore per month he is to make good
for the same in the next installments. In any case,
the total payment should not be less than 30 crore
up to 31/3/2013.
(iii) The first installment should be paid by
20/2/2013 and the second by 20/3/2013. This
order shall be reviewed on 10th of April, 2013.
(iv) It has been made clear that failure to adhere to
the arrangement of payment of demand will render
the assessee for coercive action for recovery by
treating assessee in default."
(underlining added)
3. It will be noticed from the above extract that at that point of time, the
Commissioner was under the impression that the disputed amount was ` 665
crores and the amount of ` 369 crores was undisputed. While, the Commissioner
had stayed the recovery of the disputed amount of ` 665 crores till 31.03.2013,
the Commissioner directed the petitioner to pay at least ` 30 crores more (in
addition to the ` 13 crores already paid by the petitioner) by the end of the
financial year 2012-2013. We are informed that the said sum of ` 30 crores has
been paid by the petitioner. The Commissioner, by virtue of the order dated
11.02.2013 had directed that the same would be reviewed on 10.04.2013. In
between, the petitioner had filed a writ petition before this Court being W.P.(C)
No.2585/2013. In that writ petition, one of the contentions was that while the
petitioner was being directed to pay a sum of ` 30 crores, the appeal was itself
being delayed on account of the Assessing Officer not furnishing the comments
on the written submissions submitted by the petitioner on 11.03.2013 and
21.03.2013. After hearing the learned counsel for the parties, we disposed of the
said writ petition by an order dated 23.04.2013 in the following manner:-
WP (C) No.3183/2013 Page 3 of 7
"WP (C) 2585/2013 & CM 4906/2013(stay)
By an order dated 11.02.2013 the Commissioner of Income
Tax stayed the collection of demand of the tax by passing a
conditional order. The condition was that the petitioner would pay
an amount of Rs.30 Crores by the end of the financial year 2012-13.
It was also stated in the order that the same would be reviewed on
10.04.2013. Apparently, nothing happened on 10.04.2013 but a
hearing was granted on 16.04.2013, when the matter was apparently
adjourned to 22.04.2013. According to the petitioner, the
Commissioner had orally rejected the prayer for further extension of
the stay granted by the Commissioner. However, according to the
learned counsel for the respondent, the Commissioner had fixed
22.04.2013 as the date for further consideration.
Be that as it may, we feel that since the Commissioner, in the
order dated 11.02.2013 has herself stated that the order would be
reviewed on 10.04.2013. As such, it would be appropriate if the
Commissioner considers the same and passes an order in respect of
the future. The learned counsel for the petitioner has contended that
the appeal pending before the Commissioner of Income Tax
(Appeals) is being delayed unnecessarily because the Assessing
Officer is not furnishing the comments on the written submissions
submitted by the petitioner on 11.03.2013 and 21.03.2013. He
further stated that the appeal is now fixed for hearing on 26.04.2013
and that the petitioner has till date not received a copy of the
comments.
After hearing counsel for the parties, we are disposing this
writ petition with the direction that the Commissioner shall review
the arrangement of stay within two weeks. In the first instance, the
petitioner shall appear before the Commissioner on 29.04.2013 at
11:00 a.m. We also direct that the Commissioner of Income Tax
(Appeals) who is seized of the matter shall dispose of the appeal as
expeditiously as possible. The Assessing Officer shall also furnish
his comments at the earliest.
Till the Commissioner decides the further course of action
after hearing the petitioner on 29.04.2013, the respondent shall not
take any coercive steps.
WP (C) No.3183/2013 Page 4 of 7
The writ petition stands disposed of as above."
4. Thereafter, the matter was reviewed by the Commissioner and upon
review the impugned order dated 08.05.2013 has been passed. By virtue of the
said order, the Commissioner has, inter alia, concluded as under:-
"10. I have gone through the decisions cited by the assessee
company with regard to stay of outstanding demand. I am of the
opinion that though there are compelling circumstances as the
assessment order appears to be high pitched and a genuine
hardship is likely to be caused to the assessee, the outstanding
tax dues have to be paid by the assessee within a reasonable
time. The instruction No. 1914 also provides that:
(ii) In granting stay, the Assessing Officer may impose such
condition as he may think fit. Thus he may, -
(a) require the assessee to offer suitable security to safeguard
the interest of revenue;
(b) require the assessee to pay towards the disputed taxes a
reasonable amount in lump sum or in installments;
(c) require an undertaking from the assessee that he will
cooperate in the early disposal of appeal failing which the
stay order will be cancelled;
(d) reserve the right to review the order passed after expiry of
reasonable period, say upto 6 months, or if the assessee has
not cooperated in the early disposal of appeal, or where a
subsequent pronouncement by a higher appellate authority
or court alters the above situations;
(e) reserve a right to adjust refunds arising, if any against the
demand.
(iii) Payment by installments may be liberally allowed so as to
collect the entire demand within a reasonable period not
exceeding 18 months.
11. Accordingly, looking into the facts and circumstances of the
case and the fact that the investments in shares have already
been attached and the book value of such investments is more
than the demand outstanding against the assessee and that if
coercive measures are taken to collect the entire demand, it will
WP (C) No.3183/2013 Page 5 of 7
put assessee in undue hardship, the following arrangement is
made:
(i) This order is being passed initially for the three
months and shall be reviewed on 12-08-2013 or on
receipt of order of CIT(A), whichever is earlier.
(ii) The assessee should pay demand by way of
installments of Rs. 80 crore each. The first installment
should be paid by 20/05/2013 and then by 20th day of
each month starting from June, 2013.
(iii) It has been made clear that failure to adhere to the
arrangement of payment of demand will render the
assessee liable for coercive action for recovery of
arrear tax, by treating the assessee in default."
(underlining added)
5. We have heard learned counsel for the parties at length. While, learned
counsel for the petitioner strenuously urged that the petitioner is under no
position (financially) to make the payments as per the directions of the
Commissioner by virtue of the impugned order and that the petitioner has an
excellent case, we feel that the Commissioner ought to have stuck to the same
methodology of payment as indicated in the earlier order dated 11.02.2013. At
that point of time, the Commissioner had only directed the payment of the
undisputed amount of ` 369 crores by requiring payment in two installments of
` 15 crores each so that the amount of ` 30 crores is collected by the end of
financial year 2012-2013. However, now, after the entire amount is disputed, yet
the Commissioner has directed the assessee to pay the demand by way of
installments of ` 80 crores each month, the first being due on 20.05.2013.
Initially, the installments are to be for 03 months inasmuch as the order is to be
reviewed on 12.08.2013 or on receipt of the order the Commissioner of Income
Tax (Appeals), whichever was earlier.
WP (C) No.3183/2013 Page 6 of 7
6. We feel that since the Commissioner had initially only directed payment of
installments of ` 15 crores each month, the same should have been continued
even by virtue of the subsequent order, particularly, as at the stage of passing the
subsequent order, the petitioner had clarified that the entire amount was disputed.
That being so, we modify the order of the Commissioner dated 08.05.2013 to the
extent that instead of paying installments of ` 80 crores each month, the
petitioner shall pay installments of ` 15 crores each month. The first installment
shall be due on 31.05.2013 followed by payments each month to the extent of
` 45 crores.
7. We also direct that the Commissioner of Income Tax (Appeals) to dispose
of the appeal positively within three months, that is, by 31.08.2013.
8. With these observations and directions, the writ petition is disposed of.
Dasti.
BADAR DURREZ AHMED, J
VIBHU BAKHRU, J
MAY 15, 2013
MK
WP (C) No.3183/2013 Page 7 of 7
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