IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF DECEMBER 2017 BEFORE THE HON'BLE Mrs.JUSTICE B.V.NAGARATHNA WRIT PETITION No.55578/2017 (T-IT) C/w. WRIT PETITION Nos.55579/2017, 55580/2017 & 55606/2017 (T-IT) Between :
Google India Private Limited, No.3, RMZ Infinity, Tower E, 4th Floor, Old Madras Road, Bengaluru-560 016, Represented by its Authorised Signatory Ms.Gitanjli Duggal. .. Petitioner (Common in all the Petitions) ( By Sri Deepak Chopra, Advocate ) And :
1. The Deputy Commissioner of Income Tax, Circle-1(1), 2nd Floor, BMTC Building, 80 Feet Road, Koramangala, Bengaluru-560 095.
2. The Commissioner of Income Tax –III, BMTC Complex, 80 Feet Road, Koramangala, Bengaluru-560 095.
3. Citibank NA 506-507, Level 5 Prestige Meridian 2, #30, M.G.Road, Bengaluru-560 001. .. Respondents (common in WP.Nos.55578, 55579 & 55580 of 2017) ( By Sri K.V.Aravind, Sr.Standing Counsel For R-1 & R-2 ) In W.P.No.55606/2017 :
1. The Deputy Commissioner of Income Tax, Circle-1(1), 2nd Floor, BMTC Building, 80 Feet Road, Koramangala, Bengaluru-560 095.
2. The Commissioner of Income Tax –III, BMTC Complex, 80 Feet Road, Koramangala, Bengaluru-560 095.
3. Citibank NA 506-507, Level 5 Prestige Meridian 2, #30, M.G.Road, Bengaluru-560 001.
Represented by Branch Manager. .. Respondents ( By Sri K.V.Aravind, Sr.Standing Counsel For R-1 & R-2 ) Writ Petition No.55578/2017 is filed under Articles 226 & 227 of the Constitution of India praying to quash the order of the Tribunal dated 8.12.2017, in Stay Petition for assessment year 2009-10 vide Annexure-A and to direct the R-1 and 2 to not enforce the balance demand of INR.51,47,23,190/- (Rupees Fiftyone crores fortyseven lakhs twentythree thousand one hundred and ninety only) in respect of the Assessment Year 2009-10, until disposal of appeal pending before the Tribunal for A.Y.2009-10.
Writ Petition No.55579/2017 is filed under Articles 226 & 227 of the Constitution of India praying to quash the order of the Tribunal dated 8.12.2017, in Stay Petition for assessment year 2010-11 vide Annexure-A and to direct the R-1 and 2 to not enforce the balance demand of INR.79,27,89,430/- (Rupees Seventynine crores twentyseven lakhs eightynine thousand four hundred and thirty only) in respect of the Assessment Year 2010-11, until disposal of appeal pending before the Tribunal for A.Y.2010-11.
Writ Petition No.55580/2017 is filed under Articles 226 & 227 of the Constitution of India praying to quash the order of the Tribunal dated 8.12.2017, in Stay Petition No.273/Bang/2017 in ITA.No.559/Bang/2016, for assessment year 2011-12 vide Annexure-A and to direct the R-1 and 2 to not enforce the balance demand of INR.114,37,82,276/- (Rupees One hundred and fourteen crores, thirtyseven lakhs eightytwo thousand two hundred and seventysix only) in respect of the Assessment Year 2011-12, until disposal of appeal bearing ITA.No.559/Bang/2016, pending before the Tribunal for A.Y.2011-12.
Writ Petition No.55606/2017 is filed under Articles 226 & 227 of the Constitution of India praying to quash the order of the Tribunal dated 8.12.2017, in Stay Petition for assessment year 2012-13 vide Annexure-A and to direct the R-1 and 2 to not enforce the balance demand of INR.340,52,75,314/- (Rupees Three hundred and forty crores fiftytwo lakhs seventyfive thousand three hundred and fourteen only) in respect of the Assessment Year 2012-13, until disposal of appeal pending before the Tribunal for A.Y.2012-13.
These Writ Petitions coming on for preliminary hearing this day, the Court made the following :
ORDER Though these writ petitions are listed for preliminary hearing, with the consent of learned counsel for respective parties, they have been connected and heard finally and are disposed of by this common order.
2. These writ petitions have been filed by the assessee, who is appellant before the Income Tax Appellate Tribunal (hereinafter referred to as `Tribunal’ for brevity), Bengaluru, assailing common order dated 8.12.2017, passed in Stay Petition No.271/Bang/2017 in ITA.No.69/Bang/2014, Stay Petition No.272/Bang/2017 in ITA.No.68/Bang/2015, Stay Petition No.273/Bang/2017 in ITA.No.559/Bang/2016, and Stay Petition No.274/Bang/2017 in ITA.No.387/Bang/2017 respectively, for the Assessment Years 2009-10 to 2012-13. A copy of the said order is produced as Annexure-`A’ to these writ petitions.
3. Petitioner is stated to be a Private Limited Company, incorporated under the provisions of the Companies Act, 1956. As already noted above, being aggrieved by the common order dated 8.12.2017, these writ petitions have been filed. The Tribunal by exercising jurisdiction under second proviso to Section 254 (2A) of the Income Tax Act, 1961 (`the Act’ for short), has directed the petitioner-assessee to deposit 55% of the outstanding dues in respect of the aforesaid Assessment Years and to retain balance of 20% in its account maintained in CITI Bank, M.G.Road Branch, Bengaluru-560 001, while extending the interim stay. Further, the Tribunal has stated that if the aforesaid conditions are complied with, the stay would be extended for a period of three months from 8.12.2017 (i.e., the date of the impugned order), or till the disposal of the appeals, whichever is earlier.
4. Sri Deepak Chopra, learned counsel for the petitioner contended that while exercising jurisdiction under the second proviso to Section 254 (2A) of the Act, the Tribunal could not have directed the assessee to make additional payments or retain balance in its account. He submitted that the said order if at all could have been passed in the first instance when the stay application was considered on merits, but, thereafter, there cannot be any modification with regard to the earlier order passed at the first instance at the time of extension of the stay order. Learned counsel would submit that there are innumerable judgments of several High Courts across the country to this effect. But, the Tribunal has mechanically followed the order of this Court dated 22.11.2017, passed in Writ Petition Nos.52358-52359/2017, which order was passed having regard to the factual matrix that arose in that writ petition and the same parameters could not have been applied mechanically in these petitions. Learned counsel drew my attention to Para-2 of the impugned order and submitted that for each of the Assessment Years 2009-10 to 2012-13, which are the subject matter of appeals before the Tribunal, the total demand and the amount paid has been recorded and the Tribunal irrespective of the quantum of demand and the amount paid, has issued a direction without having any co- relation to the dues and the amount paid.
5. He further submitted that in so far as Assessment Year 2012-13 is concerned, even when the stay was granted at the first instance, the Tribunal directed that there should be a deposit of 50% of the total outstanding dues. But, this Court in Writ Petition No.13601/2017, disposed of on 17.7.2017, reduced the deposit to be made from 50% to 30%, which order has been complied with and therefore, for that assessment year, the Tribunal could not have enhanced the amount to be deposited or pass an order which was contrary to the order passed by this Court. Learned counsel further submitted that in so far as Assessment Year 2011-12 is concerned, when the extension of stay was granted, an additional condition of deposit of Rs.15 Crores was made by the Tribunal. The same is assailed in Writ Petition No.13599/2017, and the additional condition for deposit of Rs.15 Crores at the time of extension of stay, has been stayed by this Court and the writ petition is pending. The said writ petition pertains to ITA.No.559/2016. Learned counsel for the petitioner, contended that this Court may interfere in the impugned order and extend the stay granted by the Tribunal without any conditions being imposed on the petitioner.
6. Per contra, Sri K.V.Aravind, the learned Senior Standing Counsel for the respondent-Department drew my attention to the judgment of the Hon’ble Supreme Court in the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal vs. Dunlop India Ltd., and others { (1985) 1 SCC 260}, to contend that the Hon’ble Supreme Court has stated therein that while granting any interim order, Courts must be circumspect, particularly when it concerns the revenue. He further submitted that when this Court in the earlier Writ Petition had directed payment of 55% and retaining balance of 20% as far as this very assessee is concerned, there can be no different parameter imposed in these cases which are in respect of other assessment years and that the earlier order may be followed.
7. By way of reply, learned counsel for the petitioner submitted that having regard to the fact that with regard to Assessment Years 2009-10 and 2010-11 are concerned, already there has been payment of 50% of the dues made by the assessee and the balance of 25% would be submitted through Bank Guarantee, in which event, 75% of the outstanding dues would be remitted. He submits that in so far as Assessment Year 2011-12 is concerned, 30% of the amount has been paid and that balance 20% would be paid within a time frame to be granted by this Court and for remaining 25%, Bank Guarantee would be furnished. But, so far as Assessment Year 2012-13 is concerned, learned counsel emphasized and reiterated that when this Court has already permitted deposit of only 30% of the outstanding dues in Writ Petition No.13601/2017, disposed of on 17.7.2017 (vide Annexure-`D’ to Writ Petition No.55606/2017), the same parameters have to be followed in these petitions.
8. Having heard the learned counsel for respective parties, at the outset, the table containing the assessment year, total demand and the amount paid, as indicated in paragraph-2 of the impugned order, is extracted as under for ready reference :
From the above table, it is noted that as far as Assessment Year 2009-10 and 2010-11 are concerned, the amounts paid are around 50% of the outstanding dues. As far as Assessment Year 2011-12 is concerned, it is about 30% of the outstanding dues, whereas, for the Assessment Year 2012-13 also, it is about 30% of the outstanding dues, having regard to the order passed by this Court on 17.7.2017. The Tribunal while passing the impugned order and extending the stay, has followed the earlier order passed by this Court in Writ Petition Nos.52358-52359/2017, disposed of on 22.11.2017. In that writ petition, the facts were that out of the demand of about Rs.129 Crores, 55% of the outstanding demand being Rs.70 Crores, had already been paid voluntarily by the petitioner. In the circumstances, the petitioner was directed to retain balance of 20% in its account maintained with CITI Bank, Bengaluru, and on the said conditions being complied with, the stay was extended till disposal of the appeal pending before the Tribunal, by directing the Tribunal dispose of the appeal on or before 31.1.2018. It was in the aforesaid factual matrix that the order was passed by this Court. But, what is significant from the order passed in the aforesaid writ petitions, it is the fact that this Court had reigned in 75% of the outstanding dues i.e., 55% by way of payment stated to be voluntarily paid by the petitioner and 20% by retaining the balance in the account with the bank. If the said parameter has to be applied to the present case having regard to the outstanding dues and the payments made, it is noticed that for the Assessment Years 2009-10 and 2010-11, 50% of the payment has already been made by the assessee. In the circumstances, for the aforesaid two assessment years, the petitioner is directed to furnish a Bank Guarantee for the balance of 25% of the outstanding dues.
9. In so far as Assessment Year 2011-12 is concerned, as only 30% of the outstanding dues has been paid, the petitioner is directed to pay remaining 20% to the respondent-Department on or before 7th January 2018. For the balance of 25%, the petitioner is directed to furnish Bank Guarantee in terms of the aforesaid direction i.e., on or before 31st December 2017.
10. In so far as Assessment Year 2012-13 is concerned, it is noted that even when the stay was granted in the first instance by the Tribunal by exercising jurisdiction under the first proviso to Section 254 (2A) of the Act, the Tribunal had ordered that 50% of the dues be deposited. The said order was assailed by the assessee in Writ Petition No.13601/2017. This Court by the order dated 17.7.2017, reduced the percentage to be paid from 50% to 30%. Learned counsel for the petitioner submits that the said direction has been complied with. In the circumstances, the Tribunal, in my view, could not have once again directed the petitioner to pay 55% of the amount, having regard to the fact that the order dated 17.7.2017 has, for the present, attained finality and has not yet been interfered with in appeal. Though learned counsel for the respondent- Department submits that Writ Appeal No.5193/2017 has been filed by the Department against the said order, the same is pending consideration by the Division Bench of this Court.
11. In the circumstances, as far as Assessment Year 2012-13 is concerned, there cannot be a direction to the petitioner to deposit further 20% as the same is pending adjudication before the Division Bench. Instead, the petitioner is directed to furnish a Bank Guarantee for 45% of the dues as far as that assessment year is concerned. The said Bank Guarantee shall also be furnished on or before 31st December 2017. It is needless to observe that the directions issued as far as Assessment Year 2012-13 is concerned, the same is subject to any further orders to be passed by the Division Bench of this Court in Writ Appeal No.5193/2017. Pending such order, the aforesaid direction would prevail.
12. Having heard the learned counsel for the petitioner and the learned counsel for the respondent-Department, it is noted that in the earlier writ petition disposed of by this Court, while staying the impugned directions of the Tribunal, on compliance of the directions issued by this Court, a further direction was issued to the Tribunal to dispose of that appeal concerning the Assessment Year 2013-14 on or before 31st January 2018. Learned counsel for the petitioner submits that the said appeal is under consideration before the Tribunal. In the circumstances, a similar order would have to be made in so far as these appeals are concerned.
Accordingly, the stay granted by the Tribunal is extended till the disposal of the appeals by the Tribunal, subject to compliance of aforesaid directions by the petitioner. The Tribunal is directed to dispose of the appeals, out of which, these writ petitions arise, on or before 31st of March 2018. It is needless to observe that in view of the specific direction issued by this Court for expeditious disposal of the appeals by the Tribunal, both parties are directed to co-operate with the Tribunal in that regard.
In the circumstances, the impugned order stands modified with regard to the direction for deposit of the amount, as well as, the period of stay.
With the aforesaid observations and directions, the Writ Petitions are disposed.
In view of disposal of the writ petitions, IA.2/2017 filed for stay in each of these writ petitions, stand disposed.
Sri K.V.Aravind, learned Standing Counsel for the respondent-Department is permitted to file his memo of appearance/vakalatnama within a period of six weeks from today.
Sd/- JUDGE *bk/