Pepsi Food P Limited
PFA
PFA
While it could be argued that the condition that the stay order could be extended beyond a period of 180 days only if the delay in disposing of the appeal was not attributable to the assessee was a reasonable condition on the power of the Tribunal to the grant an order of stay, it can, by no stretch of imagination, be argued that where the assessee is not responsible for the delay in the disposal of the appeal, yet the Tribunal has no power to extend the stay beyond the period of 365 days. The intention of the legislature, which has been made explicit by insertion of the words – 'even if the delay in disposing of the appeal is not attributable to the assessee'– renders the right of appeal granted to the assessee by the statute to be illusory for no fault on the part of the assessee. The stay, which was available to him prior to the 365 days having passed, is snatched away simply because the Tribunal has, for whatever reason, not attributable to the assessee, been unable to dispose of the appeal
S. 254(2A): The Third Proviso which restricts the power of the ITAT to grant stay beyond 365 days "even if the delay in disposing of the appeal is not attributable to the assessee" is arbitrary, unreasonable and discriminatory. It is struck down as violative of Article 14. The ITAT has the power to extend stay even beyond 365 days
The third proviso to Section 254(2A) was amended by the Finance Act, 2008, with effect from 01.10.2008 to provide that the Tribunal shall not have the power to grant stay of demand for a period exceeding 365 days "even if the delay in disposing of the appeal is not attributable to the assessee". The said amendment was inserted to overcome the judgement of the Bombay High Court in Narang Overseas Private Limited v. ITAT 295 ITR 22. The Petitioners filed a Writ Petition to challenge the said amended third proviso to section 254(2A) on the ground that it is arbitrary and contrary to the provisions of the Article 14 of the Constitution of India. HELD by the High Court upholding the challenge:
(i) U/s 254, there are several conditions which have been stipulated with respect to the power of the Tribunal to grant stay of demand. First of all, as per the first proviso to Section 254(2A), a stay order could be passed for a period not exceeding 180 days and the Tribunal should dispose of the appeal within that period. The second proviso stipulates that in case the appeal is not disposed of within the period of 180 days, if the delay in disposing of the appeal is not attributable to the assessee, the Tribunal has the power to extend the stay for a period not exceeding 365 days in aggregate. Once again, the Tribunal is directed to dispose of the appeal within the said period of stay. The third proviso, as it stands today, stipulates that if the appeal is not disposed of within the period of 365 days, then the order of stay shall stand vacated, even if the delay in disposing of the appeal is not attributable to the assessee. While it could be argued that the condition that the stay order could be extended beyond a period of 180 days only if the delay in disposing of the appeal was not attributable to the assessee was a reasonable condition on the power of the Tribunal to the grant an order of stay, it can, by no stretch of imagination, be argued that where the assessee is not responsible for the delay in the disposal of the appeal, yet the Tribunal has no power to extend the stay beyond the period of 365 days. The intention of the legislature, which has been made explicit by insertion of the words – 'even if the delay in disposing of the appeal is not attributable to the assessee'– renders the right of appeal granted to the assessee by the statute to be illusory for no fault on the part of the assessee. The stay, which was available to him prior to the 365 days having passed, is snatched away simply because the Tribunal has, for whatever reason, not attributable to the assessee, been unable to dispose of the appeal. Take the case of delay being caused in the disposal of the appeal on the part of the revenue. Even in that case, the stay would stand vacated on the expiry of 365 days. This is despite the fact that the stay was granted by the Tribunal, in the first instance, upon considering the prima facie merits of the case through a reasoned order;
(ii) The petitioners are correct in their submission that unequals have been treated equally. Assessees who, after having obtained stay orders and by their conduct delay the appeal proceedings, have been treated in the same manner in which assessees, who have not, in any way, delayed the proceedings in the appeal. The two classes of assessees are distinct and cannot be clubbed together. This clubbing together has led to hostile discrimination against the assessees to whom the delay is not attributable. It is for this reason that we find that the insertion of the expression – 'even if the delay in disposing of the appeal is not attributable to the assessee'– by virtue of the Finance Act, 2008, violates the non-discrimination clause of Article 14 of the Constitution of India. The object that appeals should be heard expeditiously and that assesses should not misuse the stay orders granted in their favour by adopting delaying tactics is not at all achieved by the provision as it stands. On the contrary, the clubbing together of 'well behaved' assesses and those who cause delay in the appeal proceedings is itself violative of Article 14 of the Constitution and has no nexus or connection with the object sought to be achieved. The said expression introduced by the Finance Act, 2008 is, therefore, struck down as being violative of Article 14 of the Constitution of India. This would revert us to the position of law as interpreted by the Bombay High Court in Narang Overseas (supra), with which we are in full agreement. Consequently, we hold that, where the delay in disposing of the appeal is not attributable to the assessee, the Tribunal has the power to grant extension of stay beyond 365 days in deserving cases (CIT v. Maruti Suzuki (India) Limited: (2014) 362 ITR 215 (Delhi) (DB), Jethmal Faujimal Soni v. Income Tax Appellate Tribunal: (2011) 333 ITR 96 referred)
Related Judgements
- CIT vs. Ecom Gill Coffee Trading Pvt. Ltd (Karnataka High Court) The third proviso to s. 254(2A) as amended by the FA 2008 w.e.f. 1.10.2008 provides that if the appeal is not decided within the period of 365 days, the order of stay shall stand vacated after the expiry of such period even if the delay in disposing of the…
- Shri Jethmal Faujimal Soni vs. ITAT (Bombay High Court) The 3rd Proviso to s. 254 (2A) is a stringent provision as a result of which even if the delay in disposing of the appeal is not attributable to the assessee, the stay has to stand vacated in any event upon the lapse of a period of 365 days….
- Qualcomm Incorporated vs. ADIT (ITAT Delhi) In Narang Overseas (P) Ltd vs. ACIT 114 TTJ 433 (SB), it was held by the Special Bench that if there is a cleavage of opinion amongst different High Courts and there is no decision of the jurisdictional High Court on the issue, then the view favourable to the…
- Tata Communications Ltd vs. ACIT (ITAT Mumbai – Special Bench) In Ronak Industries, the Tribunal held, relying on Narang Industries, that the Tribunal has the power to extend stay beyond 365 days. This decision of the Tribunal was challenged by the department in the Bombay High Court by specifically raising a question as to the applicability of the Third…
- Vodafone West Ltd vs. ACIT (ITAT Ahmedabad) The assessee is seeking extension of stay beyond 365 days. The assessee argued that on similar facts the matter is pending before the Supreme Court in case of Idea Cellular Ltd and Bharti Cellular Ltd wherein ad interim order had been passed. In CIT vs. Ronuk Industries Ltd 333…
High Level Committee To Probe MAT Taxation Of Foreign Companies & FIIs Formed
The Ministry of Finance has issued a press release stating that a High Level Committee (HLC) Headed by Justice A.P. Shah on Direct Tax Matters has been constituted. The Committee consists of leading tax experts. The Committee is required to examine the matter relating to levy of MAT on FIIs for the period prior to 01.04.2015 among others. The Committee has been requested to give its recommendations on the above issue expeditiously
The Union Finance Minister Shri Arun Jaitley, while responding to the discussions on the Finance Bill in Rajya Sabha on 7th May, 2015, had announced the constitution of a Committee headed by Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on Foreign Institutional Investors (FIIs) as well as other issues which are referred to it .
Accordingly, a Committee headed by Justice A.P. Shah has been constituted.
Following is the composition of the Committee:-
i) Justice A.P. Shah – Chairman
(Former Chief Justice of Delhi High Court and currently Chairman of Law Commission of India)
ii) Dr. Girish Ahuja – Member
(Chartered Accountant and formerly Associate Professor of Commerce, Shri Ram College of Commerce, University of Delhi.)
iii) Dr. Ashok Lahiri – Member
(Formerly Chief Economic Adviser & Executive Director, ADB and currently Chairman of High Level Committee to interact with Trade and Industry on tax laws.)
To begin with, the Committee will examine the matter relating to levy of MAT on FIIs for the period prior to 01.04.2015.The Committee will also examine all the related legal provisions, judicial / quasi judicial pronouncements and such other relevant aspects as it may consider appropriate. The Committee has been requested to give its recommendations on the above issue expeditiously.
As initially the Committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the Committee will be notified in due course. The Committee may interact with various stakeholders as it may deem fit. The Committee may also invite officers from Department of Revenue including CBDT for consultations/discussions as may be necessary.
The Committee shall set its own procedure for regulating its work. The term of the Committee will be for one year or such period as may be notified by the Government from time to time.
Subway not dominant in fast food market; Franchisee agreement not anti-competitive
CCI rejects complaint against Subway Systems India Pvt. Ltd. ('Subway', engaged in franchising of Subway Stores) by its Chennai franchisee (informant) alleging that Subway abused its dominance by imposing unfair conditions in franchise agreement; Holds that Subway did not hold dominant position in relevant market of "services of franchisee for a fast food restaurant chain/ quick service restaurant ('QSR') chain in Chennai"; Notes presence of several competitors such as Pizza Hut, KFC, Mc. Donald's, Cafe Coffee Day etc. and 46 Subway outlets in relevant geographic area, i.e., Chennai, thus, states that Subway neither has power to act/operate independently of its competitors, nor has the ability to affect its competitors and consumers in the market; Informant had also alleged anti-competitive conduct of Subway in claiming CENVAT credit though tax was paid by informant, in including clauses in franchise agreement that required informant to purchase all food, equipment, beverages from an approved distribution centre, required adjudication of all disputes arising out of franchise agreement in New York, non-compete clause etc; CCI rejects such allegations against Subway, holds that they did not have any Appreciable Adverse Effect on Competition in the market since size of concerned market was huge as compared to market size of 'Subway' food chain business:CCI
The order was passed by Shri S. L. Bunker, Shri Sudhir Mital and Shri. M.S. Sahoo (Members).
Advocates K. K. Sharma, Danish Khan and Inderpreet Singh appeared on behalf of Informant.
Presumes registration of mortgage-charge in successor's favor on predecessor's disqualification, absent contrary proof
Division Bench of P&H HC sets-aside Single Judge Order that rejected IDBI Trusteeship Services Ltd's (appellant) application to be treated as first charge holder of liquidated company pari passu with trust beneficiaries; A trustee agreement was entered into between liquidated co. & IDBI whereby IDBI had subscribed to certain redeemable non-convertible debentures of liquidated co. and appellant was made IDBI's successor-in-interest; HC peruses the agreement and notes that since IDBI was prohibited to be the trustee by SEBI under Debenture Trustee Regulations, appellant became the secured creditor by virtue of the agreement; Rejects respondent's contention that since appellant could not establish registration of charge u/s 125 of Companies Act, 1956, it could not be declared as pari passu charge holder; Terms the contention as 'unfair' and observes that respondents expressly agreed to the appellant being granted a pari-passu charge under the agreement; Notes the receipts given by Registrar of Companies and deed of hypothecation, states that such receipts & documents indicated that equitable mortgage was created and registered; Holds that, "Absent any indication to the contrary, and there is none, it must be presumed that the charge was registered", and declares that appellant holds a pari-passu charge as claimed by it and shall be entitled to a pro-rata distribution of sale proceeds of liquidated co. :Punjab & Haryana HC
The ruling was delivered by Justice S.J. Vazifdar (Acting Chief Justice) and Justice G.S. Sandhawalia.
Advocate C.S. Pasricha appeared on behalf of appellant while respondents were represented by Advocates Nitin Jain, Manish Jain and Kamal Sehgal.
CCI hunts for new DG; Pfizer gets IPAB breather on patent; Smartphone 'cold-war' on patent licensing
CCI hunts for new DG; Pfizer gets IPAB breather on patent; Smartphone 'cold-war' on patent licensing
CLB: Insists on "locus-standi" for Sec. 237 petition; Fishing expedition by 'stranger' not permitted
D C I T V Artemis Medicare Services P Limited
Determination of the vexed questions as to whether a contract is a contract of service or contract for service and whether the employees concerned are employees of the contractors has never been an easy task. No decision of this Court has laid down any hard-and-fast rule nor is it possible to do so. The question in each case has to be answered having regard to the fact involved therein. No single test - be it control test, be it organisation or any other test - has been held to be the determinative factor for determining the jural relationship of employer and employee
P F A
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