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| DATE: | February 22, 2014 (Date of publication) |
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| Click here to download the judgement (deloitte_stay_grant_guidelines.pdf) |
Rejection of stay application by ITAT on the ground that “the financial position of the assessee is very sound” and “government also needs liquid funds to manage its day to day affairs” & without discussing prima facie case is in disregard of law laid down in KEC International 251 ITR 158 (Bom)
The assessee filed a revised return in which it withdrew a claim for deduction of Rs.5.86 crore paid to its AE. The assessee claimed s. 10A deduction on the enhanced income. The AO held that the revised return was filed to get over s. 92-C(4) and the proviso thereto which provides that no deduction u/s 10-A would be allowed in respect of income enhanced having regard to the Arms Length Price (ALP). The AO’s stand was upheld by the Tribunal. The AO levied penalty of Rs. 2.05 crore and refused to grant stay. The assessee filed a Writ Petition. The High Court held that that the assessee held a prima facie case on merits and granted partial stay of the demand till the decision of the CIT(A). Subsequently, the CIT(A) dismissed the penalty appeal and the assessee filed a stay application before the Tribunal. The Tribunal (order attached) rejected the stay application on the ground that “the financial position of the assessee is very sound” and “government also needs liquid funds to manage its day to day affairs”. The assessee filed a Writ Petition to challenge the said order of the Tribunal. HELD by the High Court:
The impugned order of the Tribunal has been passed in total disregard of the principles laid down in KEC International Ltd 251 ITR 158 (Bom) wherein a Division Bench of this Court laid down parameters to be observed by the Authorities while considering the stay application. The Tribunal has not even given short prima facie reasons recording the Petitioner’s case. The Petitioner does has a strong prima facie case on merits before the Tribunal. Thus, having regard to the fact that the Petitioner has already paid the full tax amount and also 25% of the penalty amount earlier, the Tribunal ought not to have required the Petitioner to deposit a further sum of Rs.50.00 lakhs. In fact, the Tribunal while passing the impugned order has not only ignored the directions in KEC but also the observations made by this Court in the Petitioner’s own case
VERY SAD HOW ITAT CAN AGAINST LAID DOWN LAWS. SADDEST DAY OF JUSTICE
i wonder can ITAT function this way? if so is it worth moving ITAT by simply paying Rs.10,000 is indeed terrible wastage to assesses is it not?
Will ITAT modify its pro government approaches will be the greatest menace to judicial system.
soon assesses will approach directly high court under Art 226 as the very good name which had built up all these years and kudos from Honorable S C courts will just become a great history.
if ITAT credibility has to be maintained ITAT on its own rebuild its credibility again , yes it may take some years, as Assesses will come to ITAT with a pinch of salt
So it is high time all members including accounts and judicial members need to be very careful o thoroughly observe real proper laws and acts.
Assesses are not happy at all at the recent ITAT somersault.
Revenue to look after itself properly by real legal mode if not need to suffer no matter government has moneys or finances
why we appointed revenue officers to work with hefty remuneration, not repeat not just to act like politicians who suffer from immaturity but we never expected such immaturity in revenue officers.
it is high time, ITAT need to punish any revenue officer if he had not acted legally under legal duty as enshrined in Art 51 A (i-j) in Part IV A of Constitution of India.
sorry i have to say so stiffly in the larger public interest as india is a vibrant democracy and certainly not any dictatorship which every public servant need to know please.
Revenue officers really be taught what is Natural justice, ‘audi aletam partem’ doctrines that is the key element in all administrative laws in india why all over world in all democracies !!!!!!
i want all CITs needs to ensure all AOs, Jt.Commissioners, CIT(A) essentially be well trained in natural justice which is a must.
unnecessarily do not make people revolt. that will be very costly to all concerned.
sorry sirs, i am very much worried by the so called ITAT miserable logic!
@ Dr Balakrishnan.
In every judicial decision, it is a delicate balancing act on the propositions laid down by Hon’ble Courts above, the lower judicial authorities are not always perfectly correct in taking such calls. As long as there are no malafides in one’s decisions, everyone should accept the decisions gracefully. You may appeal against a decision, you may get it reversed but you need not get so upset with it that the institution is seen as a useless forum not worth the filing fees. Your reactions to a wrong call having been taken by the ITAT are perhaps too extreme. Having said that, none can disagree that there is scope in improving functioning of the ITAT.
Incidentally, this is also what Hon’ble Supreme Court had observed in the case of ACIT Vs Dunlop India Ltd (154 ITR 172):
In cases where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen’s faith in the impartiality of public administration, a Court may well be justified in granting interim relief against publicn authority. But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, a Court must be circumspect in granting intrim orders of far-reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than that the parties have come to the Court alleging prejudice, inconvenience or harm and that a prima facie case has been shown. There can be and there are no hard and fast rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart from the existence of a prima facie case. There is the question of balance of convenience. There is the question of irreparable injury. There is the question of the public interest. There are many such factors worthy of consideration.