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UNITECH LIMITED Vs. ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 18, N
May, 30th 2013
         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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