S.A. No. 206 (Delhi) of 2013
IT Appeal No. 5797 (Delhi) of 2012
[ASSESSMENT YEAR 2008-09]

S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. DIVA SINGH, JUDICIAL MEMBER

C.S. Aggarwal for the Appellant.
Tarun Seem for the Respondent.

ORDER

Smt. Diva Singh, Judicial Member - The assessee has filed the present stay petition in ITA No.-5797/Del/2012 dated 01.06.2013 received in the Registry on 03.06.2013 praying for extension of stay granted to the assessee by order dated 13.12.2012 in SA No.-273/Delhi/2012. The present stay petition came up for hearing on 11.06.2013 as per order dated 07.06.2013 of the Hon'ble Vice-President. The Interim order is extracted from the order sheet hereunder:—

"ORDER SHEET
11.06.2013

The assessee had filed this stay application on 3rd June, 2013 for extension of Tribunal's stay order dated 13th December, 2012. The stay application was listed today as per the directions of the Hon'ble Vice-President on record. An adjournment application was moved by Department on the ground that the concerned Additional Senior/ CIT(DR) is on leave. Ld. Counsel for the assessee submitted that stay is due to expire today and, therefore, assessee's interest may be protected till the next date of hearing of the stay application.

2. Considering the urgency of the matter, Bench asked ld. CIT(DR), Shri Gunjan Prasad, who was present in the court, to seek necessary instructions from the appropriate authority for making alternate arrangement so that the revenue is represented and the stay petition was directed to be taken up at 2.30 p.m. today. However, at the time of hearing at 2.30 p.m., no Senior/CIT(DR) is present. Therefore, we direct both the parties to maintain status quo as of today till 21st June, 2013 when the stay petition will come up for hearing again. Ld. Sr. Counsel, Shri C.S. Aggarwal, has taken note of the next date of hearing. However, since none is present on behalf of the Department, notice be issued to Department only.

The stay petition adjourned to 21st June, 2013.

2. In the light of the above background, the stay petition came up for hearing on 21.06.2013. Ld. AR in the course of the arguments submitted that the interest of the Revenue is well-protected as the Bank Guarantee of Rs.2.08 crore odd still continues in favour of the department. The hearing in the appeal it was stated has not commenced as the earlier year is being argued and no adjournment has been sought in the appeal by the assessee and the facts continue to remain the same as considered by the ITAT in its order dated 13.12.2012. Accordingly, the stay granted vide order dated 13.12.2012 may be extended.

2.1 Since the Hon'ble High Court is seized of the issue, the ld. AR was required to address whether stay granted by the Tribunal on 13.12.2012 continued to be in force. Ld. AR referred to letter dtd. 11.06.2013 addressing the issue placed on record. It was also clarified by the ld. AR that the stay order dated 13.12.2012 of the Tribunal has not been stayed by the Hon'ble High Court and it is only the operation of the Interim order dated 10.04.2013 which has been stayed. It was his submission that the amount covered in the MAP is fully secured by the fact that the bank guarantee is still in existence in favour of the department. The expiry date of the guarantee, it was submitted is 15.12.2015 and the hearing in the appeal, it was his submission, is yet to commence and the assessee is ready to argue and has never sought adjournment. Accordingly it was his submission that the facts as considered by the Co-ordinate Bench while passing the SA order 273/Delhi/2012 on 13.12.2012 continued to remain unchanged the stay may be extended on the same terms and conditions. Referring to the accepted practice in the ITAT where on account of no fault on the part of the assessee, hearing in Stay granted appeals are not concluded, the stay it was pointed out is always extended, it was his submission that the stay granted by the order dated 13.12.2012 may accordingly be extended till the disposal of the appeal.

3. The department being represented by ld. Sr. DR, Sh. Tarun Seem, was specifically required to address the departmental stand whether the order sought to be extended existed in the eye of law whether it was enforceable. Ld. Sr. DR stated that the stay can be extended on the same terms and conditions as it is correct that the Bank Guarantee is in existence and the amounts involved in the MAP has been fully covered by the Bank Guarantee. It was also his submission that the facts continued to remain the same as considered by the Tribunal in its order dated 13.12.2012 which is being sought to be extended by the assessee and the department is not opposed to the extension of the stay granted by the Tribunal by its order dated 13.12.2012.

3.1 The ld. Sr. DR was specifically required to address the departmental stand whether the order dated 13.12.2012 has ceased to exist in the eye of law by virtue of the order of the Hon'ble High Court. The ld. Sr. DR referring to page no.-3 of the assessee's petition in the present proceedings submitted that only interim order dated 10.04.2013 of the Tribunal in ITA No.-5797/Delhi/2012 has been stayed and not the order dated 13.12.2012. Ld. Sr. DR specifically took us through the said submissions made by assessee. For ready-reference, the portion read out by the ld. Sr. DR is reproduced hereunder for ready-reference :

"Against the interim order dated 10.04.2013, the assessing officer has also filed a writ petition before the Hon'ble Punjab and Haryana High Court contending that the Hon'ble Tribunal has no jurisdiction to grant an order of refund. The Hon'ble High Court issued a notice and in the meantime stayed the operation of the order dated 10.04.2013. The Hon'ble Punjab and Haryana High Court thereafter on 23.05.2013 heard the matter in part. However, the hearing was not concluded and the next date of hearing is fixed for 04.07.2013. Copy of the order of the Hon'ble Court directing stay of the interim order is enclosed as Appendix 8. Copy of the latest interim order dated 23.05.2013 passed by the Hon'ble High Court is enclosed as Appendix 9. Though the Hon'ble High Court has stayed the interim order dated 10.04.2013, which directed restitution of the amount withdrawn, yet the fact remains that the said order has not been vacated....."

4. In the face of the common stance of the parties that facts remained the same when the order dtd. 13.12.2012 was passed in SA No.-273/Delhi/2012. We consider it necessary to reproduce the same for ready-reference :—

"2. At the time of hearing conducted on three occasions, ld. Counsel for the assessee while reiterating the submissions made in the application, has strongly pleaded that assessee has filed MAP application with the US competent authority in the case of M/s Motorola Inc. and its Indian subsidiary M/s Motorola Solutions India Pvt. Ltd., for the year under consideration and it was further submitted that US competent authority has duly sent the communication to CBDT on 10.12.2012, informing about filing of the MAP application and the CBDT sent communication to CCIT. By filing of the said application, assessee is required to furnish bank guarantee to the extent of tax liability involved with regard to MAP application and for the transaction not covered by the MAP, the tax involved comes to around Rs.2.50 crore, assessee is not only prepared to deposit due tax, but also prepared to furnish bank guarantee of the amount involved in MAP application as is required under the circular issued in this regard, therefore, reasonable time may be granted and accordingly recovery proceedings may be stayed. Assessee undertakes not to seek any adjournment.

3. Ld. DR accepted that assessee has filed MAP application with US authorities and communication about the same has duly been received by the Assessing Officer through proper channel, therefore, assessee is now required to furnish bank guarantee for the amount involved in MAP transaction and assessee may be asked to pay the entire amount involved in relation to transaction other than covered by MAP application before grant stay of recovery of demand.

4. In consideration of the application of the assessee in the light of rival submissions and material on record, we grant of stay recovery, subject to condition that assessee shall deposit Rs.2.50 crore on or before 21.12.2012 and shall furnish bank guarantee in the amount involved for which MAP application has been filed, on or before 31.12.2012, for a period of 180 days or disposal of the appeal/MAP application, whichever is earlier. However, assessee shall not seek any adjournment and get finalized the appeal fixed for hearing on 13.01.2013 or any subsequent date. In case assessee seeks adjournment or commit default in making payment or furnish bank guarantee within the stipulated time, the accommodation herein granted shall stand automatically cancelled and entire outstanding demand would be recoverable as per law.

5. As a result, the stay application of the assessee stands disposed off as above.

5. Although, as observed the united stand of the parties before the Bench was that the Hon'ble High Court had only stayed the Interim order dtd. 10.04.2013 and not the stay order which continued to be in force, being conscious of the fact that the Interim order dated 10.04.2013 is based on the conclusion that the order dated 13.12.2012 of the Tribunal was an enforceable order in the eye of law and consequently by the action of the department in collecting the outstanding demand already secured by the Bank Guarantee, the view taken was that the stay order had been violated by the department. The interpretation of the Revenue of the order sheet entry dated 16.01.2013 was not agreed with and the department was directed to refund/restitute the amounts collected in violation of a valid stay. Being conscious of the fact that the department took the stand, that the stay order was automatically vacated as the assessee sought an adjournment, which view was not concurred with in the Interim order. Consequently, the Sr. DR was specifically required to address the departmental stand whether the order dated 13.12.2012 according to the department was in existence or not. In the face of the departmental stand conveyed though the ld. Sr DR that the said order was in existence. We do not consider it necessary to further opine or ponder thereon since the matter is sub judice. Accordingly, we deem it appropriate in the peculiar facts and circumstances of case and in the light of the arguments of the parties before the Bench to hold that status quo shall continue for a period of six months or till the disposal of the appeal whichever is earlier. Before parting, we consider it appropriate to address the departmental stand on the fate of the MAP proceedings as the wording that the "MAP proceedings had not been admitted" as argued before the Hon'ble High Court is a fact which was not brought to the notice of the Tribunal that in our opinion the wording is very ambiguous and open to multiple interpretations having entirely different consequences. The wording can suggest that the Indian Government has rejected the proposal of settling the dispute by resorting to MAP proceedings. It can also suggest that the Government is in the process of considering the pros and cons of accepting or rejecting the proposal as such it is not admitted and is in the process of being considered. Both situations lead to entirely different consequences and being guided by the fact that where the decisions of the decision-making authorities and adjudicating authorities is sub judice, we consider it appropriate to deliberate no more on the issue.

The stay petition stands disposed in terms of the above.