The Assistant Commis... v. M/S. Goa State Co-Op..., Income Tax Appellate Tribunal, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

I.T.A No. 278.PNJ/2013, (Assessment Year-2010-11)

Advocates

Smt. Sonal Sonkavde Ld. DR. Appellant by
Shri Venkatesh J. Shenai, CA. Respondent by

Judges

P.K Bansal, A.M
D.T Garasia, J.M

Acts

CIT(A) u/s. 220(6) of the Income Tax Act.

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Smart Summary

Factual and Procedural Background

The department filed this appeal against the order of the Commissioner of Income Tax (Appeals), Panaji dated 28.06.2013 for Assessment Year 2010-2011. The assessee is a Co-operative Bank whose assessment under section 143(3) was completed (record shows dates 28.01.2013 and 28.02.2013). The assessee filed an appeal before the CIT(A) and a stay application before the Assessing Officer, which the AO rejected. The assessee obtained interim relief and filed a writ (Writ No. 201/2013) in the Bombay High Court at Goa; the High Court directed the CIT(A) to decide the stay application within eight weeks and maintained interim protection. The CIT(A), observing that the bank was in a difficult financial situation, granted stay of recovery of demand amounting to Rs. 6,55,12,350/- till disposal of the quantum appeal. The department appealed to the Tribunal.

Legal Issues Presented

Whether the CIT(A) erred in granting stay of demand when the assessee did not follow the hierarchical procedure and had not first filed a stay application before the Joint Commissioner/Commissioner of Income-Tax.
Whether the CIT(A) erred in granting stay despite the availability of alternate remedies under the Income Tax Act.
Whether the CIT(A) erred in granting a stay on the entire demand without applying CBDT Instruction No. 1914 dated 02.12.1993 (which provides that mere filing of an appeal is not sufficient reason to stay recovery).
Whether the CIT(A) erred in granting stay on the entire demand when the case did not fall within criteria in CBDT Instruction No. 1914.
Whether the CIT(A) erred in granting full stay when the Assessing Officer had already granted stay of 50% of the demand.
Whether the CIT(A) erred in relying on the assessee's financial position (bank's deposits/reserves) in granting stay.

Arguments of the Parties

Department's Arguments

The CIT(A) improperly granted stay though the assessee bypassed hierarchical procedure and did not seek stay before the Joint Commissioner/Commissioner.
The CIT(A) granted stay despite alternative remedies under the Act being available.
The CIT(A) ignored CBDT Instruction No. 1914 (02.12.1993) which indicates mere filing of appeal is not sufficient to stay recovery.
The CIT(A) granted stay on the entire demand though the case did not meet CBDT-prescribed criteria for stay.
The AO had already granted 50% stay; therefore full stay was improper.
The CIT(A) erred in relying on the assessee's asserted financial position (sufficient funds/deposits and reserves).

Assessee's/Respondent's Position (as recorded)

The CIT(A) noted that the appellant Bank was passing through a difficult financial situation and that recovery of the demand at that stage may jeopardise its day-to-day functioning; on that basis stay was granted.
The assessee had filed a stay application and obtained interim protection from the High Court, which directed the CIT(A) to decide the stay application expeditiously.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Tribunal reviewed the record and proceedings. It noted the assessment completion date (record refers to 28.01.2013 and 28.02.2013) and that the assessee had filed an appeal and a stay application which the AO had rejected. The High Court (Writ No. 201/2013) directed the CIT(A) to decide the stay application within eight weeks and maintained interim protection; the Tribunal reproduced the High Court's directions.

The Tribunal observed that the CIT(A) granted stay under the power referenced to section 220(6) of the Income Tax Act (the opinion cites s.220(6) and its effect where an appeal is presented before the Commissioner under section 246 or 246A). The Tribunal acknowledged that the CIT(A) did not consider CBDT Instruction No. 1914 dated 02.12.1993, which states that mere filing of an appeal is not in itself sufficient reason to stay recovery. However, because the High Court had directed the CIT(A) to decide the stay application and interim protection had been granted by the High Court, the Tribunal held that the CIT(A)'s grant of stay was justified and binding on it.

Further, the Tribunal noted that under section 253 of the Income Tax Act an order passed by the CIT(A) granting stay is not appealable before the Tribunal; on this basis the Tribunal concluded that the department's appeal had to be dismissed in limine as not admitted.

Holding and Implications

DISMISSED

Holding: The Tribunal dismissed the department's appeal and upheld the CIT(A)'s order granting stay of recovery of demand of Rs. 6,55,12,350/- for A.Y. 2010-2011 until disposal of the quantum appeal.

Implications: The immediate consequence is that the department's appeal is dismissed and the stay granted by the CIT(A) remains in effect as directed. The opinion does not discuss or establish any broader legal precedent beyond the direct effect on the parties.

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The Assistant Commissioner Of Income Tax, Circle-1(1), Panaji-Goa () v. M/S. Goa State Co-Operative Bank Ltd., Ground Floor, Sahakar Sankul Patto, Panaji-Goa, 403001 ().

D.T Garasia, J.M:— This appeal has been filed by the department against the order of CIT(A), Bangalore, dated 28.06.2013 for the Assessment Year 2010-2011.

2. The following grounds are raised in this appeal read as under:

The Ld. Commissioner of Income Tax (Appeal), Panaji's order granting the stay application of the assessee is opposed to law and facts of the case on the following grounds

1. The learned CIT(A) erred in granting stay of demand, when the assessee has not followed the procedure of hierarchy and without filing stay application before Joint Commissioner of Income - Tax and Commissioner of Income-Tax, has gone directly to CIT(A) and High Court.

2. The learned CIT(A) erred in granting stay in not appreciating that alternate remedy before other authorities is available to assessee as per provisions of Income Tax Act.

3. The Ld. CIT(A) is erred in granting the stay on the entire demand without considering the CBDT Instruction vide No. 1914 dated 02.12.1993, wherein it clearly says, mere filing an appeal against the assessment order will not be sufficient reason to stay the recovery of demand.

4. The Ld. CIT(A) is erred in granting stay on the entire demand, without considering the criteria, where as the case of the assesse does not fall under any criteria stipulated by the CBDT in the Instruction No. 1914 dated 02.12.1993, for granting stay of demand.

5. The Ld. CIT(A) is erred in granting stay on the entire demand, without considering that, the AO has already considered the stay application of the assesse and granted stay of 50% of the demand till the decision of the CIT(A) on the issue raised in the assessment.

6. The Ld. CIT(A) is erred to note that the assesse is a banking institution, having sufficient fund/deposit with other banking institutions in the form of current deposits, FD5 and securities and also, the fact that the liabilities are mainly in the form of reserves.”

3. The short facts of the case are that the assessee is a Co-operative Bank. The assessee has filed appeal against the Assessment Order passed u/s. 143(3) before the CIT(A), Panaji. In the mean time, while the assessee filed application for stay of Demand before the AO, which was rejected by the AO. The assessee has filed the writ against the order of the AO before Hon'ble High Court of fumbai at Goa and the Hon'ble High Court has directed the CIT(A) to decide the stay application of the assessee, hence, the department is in appeal before us.

4. The matter carried to CIT(A) and CIT(A) has stayed the demand by observing as under:

“I have gone though the facts of this case and submissions of the learned counsel of the appellant. I understand that the appellant Bank is passing through a difficult financial situation and recovery of demand at this stage may jeopardise its day-to-day functioning. In view of the above facts, stay is granted on recovery of demand amounting to Rs. 6,55,12,350/- for A.Yr 2010-2011 till the disposal of quantum appeal. The A.O is directed not to enforce recovery of above mentioned demand till the decision of the quantum appeal by the undersigned, i.e CIT(A), Panaji.”

5. We have heard the rival contention of both the parties. Looking to the facts and circumstances of the case, we find from the record that assessment was completed u/s. 143(3) on 28.1.2013 The assessee went in appeal before CIT(A). The CIT(A) was not disposing the stay application which was filed before Commissioner Appeal. Therefore, writ No. 201/2013 was filed in the eight Court of Bombay at Goa. The High Court has directed the Commissioner appeal to decide the application for stay dated 28.02.2013 within eight weeks from the date of order. The CIT(A) has granted the stay as per the power of CIT(A) u/s. 220(6) of the Income Tax Act. We find that as per Section 220(6) if the appeal has presented before the Commissioner u/s. 246 [or Section 246A] the Assessing Officer may, in his discretion and subject to such conditions as he may think CIT to impose in the circumstances of the case, treat the assessee as not being in default in respect of amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed up. We find that in this case the assessment was completed on 28.02.2013 and there was demand of Rs. 6,55,12,350/- was raised. The assessee has filed the appeal before CIT(A) and the stay application for demand was filed before AO which was rejected. The CIT(A) has granted stay. We find that the CIT(A) has decided this stay application as per the direction in writ petition 201 of 2013 by observing as under.

“5. In our considered opinion, the writ petition can be conveniently disposed of by directing the Commissioner of Income Tax (Appeals) to decide the application for stay dated 28/02/2013 filed by the petitioner expeditiously. Hence, the Commissioner of Income Tax (Appeals) is directed to decide the application for stay dated 28/02/2013 filed by the petitioner expeditiously and in any case, within a period of eight weeks from today.

6. Interim protection granted by this Court on 19/03/2013 to continue till the disposal of the stay application. In case any adverse order is passed on the stay application of the petitioner, the interim protection granted by this Court to continue for a period of two weeks thereafter.

7. Writ Petition stands disposed of.”

We find as per direction of the Hon'ble High Court, the CIT(A) has granted stay as per the direction of Hon'ble High Court, therefore, we are of the view that the decision of Hon'ble High Court is binding to us also. We find that the CIT(A) has not considered the CBDT instruction vide no. 1914 dated 02.12.1993, wherein it clearly says, mere filing of an appeal against the assessment order will not be sufficient reason to stay the recovery of demand. We find that in the case of hand, the Hon'ble High Court has given the direction in writ petition, therefore, we are of the view that CIT(A) is justified in his action and our interference is not required. Even otherwise u/s. 253 of the Income Tax Act, the order passed by the CIT(A) granting the stay to the assessee is not appealable before the Tribunal and on this basis also the appeal has to be dismissed in limine as not admitted.

6. In the result, appeal of the department is dismissed.

The Assistant Commis... v. M/S. Goa State Co-Op...