By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi Chartered Accountants
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If the Tribunal has granted stay, even if there is consent of the assessee, the Officer should not collect the amount stayed.
Facts: By
this stay application the assessee sought stay of collection of
outstanding demand of Rs. 43,24,08,871. The AO after reference to
determine transfer pricing adjustments u/s. 92C of the Act passed an
order determining the income of the assessee at Rs. 353.30 crore and
raised an additional demand of Rs. 116.27 crore. The Tribunal while
dealing with stay application dated 19.2.2014 noticed that most of the
issues stated before the Tribunal have been decided in favor of the
assessee in the orders passed by the Tribunal in assessee’s own cases
for earlier years and therefore it granted stay and directed the AO not
to make any adjustment except for the amount of Rs. 7.50 crore.
The
AO, despite the specific direction by the Bench, obtained consent
letter from the assessee and collected Rs. 16.64 crore during the
subsistence of the stay order. The amount outstanding had been reduced
to Rs. 43.24 crore.
Since the DR sought adjournment from time to time, the assessee filed a fresh stay application for extension of stay.
Held: In
the proceedings for hearing the second stay application the Tribunal
noticed that the AO followed an innovative method of collection of taxes
despite specific directions of the Bench. The Tribunal clarified that
neither the assessee nor the Revenue has the right to flout the decision
of the Tribunal and being an officer functioning under the Government
of India it is his obligation to follow the directions of the superior
authority and even if there is consent he should not have collected the
amount.
The Tribunal having noticed that in few other cases also
similar consent letters were obtained and tax collected despite the
stay order being passed by the Tribunal, the Bench deplored this
practice and directed the Chief Commissioner of Income-tax to issue a
letter to all concerned officers not to adopt this kind of approach of
obtaining consent letters and to respect the order passed by the
Tribunal as otherwise the Tribunal would be constrained to view the
conduct of the Department adversely.
The Tribunal extended the
stay for a further period of six months and also directed the AO to
refund the amount collected, contrary to the order passed by ITAT in
S.A. No. 50/Mum/2014, along with interest within 15 days and to furnish
the proof of having refunded the amount before the Bench.
The stay application filed by the assessee was allowed.
