Kobelco Construction Equipment India, ... vs Assessee

i) In the stay petition and; ii) The application of the Ld. Standing Counsel of the Revenue.

PER DIVA SINGH, JM

By the present stay petition the assessee prays for stay of outstanding demand of Rs.9,10,035,10/-. The Revenue through the Standing Counsel has submitted an application, orally addressing the same as an adjournment petition. The Ld. Standing Counsel insisted that before proceeding to decide the merits of the stay petition listed for hearing, decision on the application moved by him, may be first passed. For ready reference we extract the contents of the application hereunder:-

MAY IT PLEASE YOUR HONOURS Reg: Appeal No : Stay No. 267/Del/2015 In the case of : Kobelco Construction Equipment Asst. Year : 2010-11 The above stay/appeals are fixed for hearing on 8/5/2015. In view of certain personal difficulties/reasons, it is not possible to make appearance before your Honours, as we feel that the Ld. Judicial Member is inimical to the DRs of I-Bench and harbours bias Page 1 of 6 against them. Hence, it is apprehended that the interest of revenue may be put to jeopardy, if we make appearance before this Bench.

It is, therefore, requested that the Ld. Judicial Member must recuse herself from hearing this matter and the matter may kindly be placed before Honourable V.P for an appropriate action.

The petitioner/respondent shall ever be grateful for this act of kindness.

Judy James Sd/-

Dated: 08.05.2015 Petitioner/Respondent (CIT DR has been struck of by hand)CITDR/-Standing Counsel ITAT, I-Bench, New Delhi (Emphasis Provided)

2. Considering the peculiar facts and circumstances of the case the presence of the Ld. CIT DR (Administration) Ms. Anuradha Mishra was requested and copy of the application moved by the Standing Counsel for the Revenue was provided for her information and response of the Department. The Ld. CIT DR stated that she had no knowledge of the same. Her attention was invited to the tone, tenor and contents of the application wherein the Ld. Standing Counsel was seeking an order on personal grounds without apparently caring to allow his client i.e. the Respondent Revenue to make alternate arrangements and therefore the Ld. CIT DR was directed to bring this fact to the notice of the Chairman CBDT, New Delhi/Appropriate Authority in order to enable the said Authority to take appropriate corrective actions. It was directed that the appropriate authority is informed at the earliest how the representation on behalf of the Revenue is being sacrificed by way of continued misconduct of the Ld. Standing Counsel who admittedly was not prepared to argue despite his claim that he was engaged to argue for the Revenue. It is noticed that the Ld. Standing Counsel being duly engaged by the Revenue appears to speak for the "DR's of the 'I' Bench"

knowing fully well that at the relevant point of time there was only one CIT DR Mr. A. K. Singh in the 'I' Bench. However in the interest of justice we propose to hear the Application only after getting the response of the Revenue. For the purpose of the present proceedings the following facts were considered:-

* The present proceedings before the Tribunal are admittedly for adjudicating on the issue whether stay is to be granted to the assessee or not. The present proceedings are not for addressing the perceived personal difficulties/reasons of the Ld. standing counsel of the Respondent;

Page 2 of 6 * No personal difficulties or reasons are cited before the Bench. * When personal difficulties of the Standing counsel are stated as a reason for not arguing the case, the question of making of allegations against Member of the Bench is irresponsible and becomes prima facie scandalous.

* Though no procedure has been provided in the Act or the Rules for filing of adjournment applications or applications otherwise, however, ordinarily if any application is moved by a party it should be made well in advance of the date of hearing of the matter; here the application was moved on the same date thereby allowing no time to the client of the Ld. Standing Counsel i.e., the Government of India as respondent to make alternate arrangements;

* Ordinarily copy of any application is provided to the opposite side. In the present case only one application carelessly and irresponsibly was filed before the Bench. The Photocopies thereof were provided on directions of the Bench to the Ld. AR and also the Ld. CIT Administration Ms. Anuradha Mishra as both had no knowledge thereof. Consequently the Court proceedings were stalled awaiting the presence of CIT DR Administration Ms. Anuradha Mishra and also the making of the photocopies of the application;

* Further, it needs to be emphasized that the application so moved neither indicates good and sufficient cause nor is supported by any relevant material.

3. In view of the above, it may be relevant for the Appropriate Authority /Chairman CBDT, New Delhi to consider ** Under whose authority and directions, whether oral or written, the said application making scandalous allegation against Members has been moved. Was the Ld. Standing Counsel authorized to move the aforesaid application? This needs to be addressed since although the body of the aforesaid application is typed ,the cause title and case particulars are handwritten, which leads to an inference that the Ld. Standing Counsel has been using the same as a format having same set of allegations against other Members only to avoid the hearings in Appeals/Stay petitions where he has been engaged to represent the Revenue.

** It needs to be considered how the Ld. Standing Counsel has been allowed to avoid his duty to respond on behalf of the Revenue for which purposes he had been engaged; has the Ld. Standing Counsel been engaged on a daily basis or case to case to case basis (position to be clarified by citing the respective administrative orders/circulars for everyday's functioning so as to see how the onerous responsibility by the concerned officials has been discharged.) ** That this duty cannot be said to be discharged by moving applications on frivolous grounds in a calculated way by casting aspersions in an Application unsupported by any affidavit thereby seeking to avoid performing the duties undertaken. How and why the position has been allowed to continue and remained unaddressed till date by the Revenue needs to be addressed.

** The justification for entrusting the onerous work to persons apparently without due care and attention in regard to their commitment/capability and ethical responsibility to perform their function of assisting the Court and putting the point of view of the Revenue before the Court is a serious shortcoming with dangerous consequences which ideally ought not to have been allowed to continue ad- infinitum.

4. Thus for the aforementioned reasons and being of the view that the functioning of the Courts cannot be held at ransom due to the whims and fancies of Page 3 of 6 persons reluctant to work, it was ensured that the Revenue does not go unrepresented. Accordingly the presence of CIT DR Administration Ms. Anuradha Mishra was requested, who on considering the copy of the application provided by the Bench was given time to respond to the same and agreed that for the purposes of the Stay Petition listed for hearing she would instead stand in for the Department. Accordingly the parties were directed to make their submissions on the stay petition listed for hearing.

4.1. The Ld. AR referring to Page 1 of the Paper Book submitted that the stay application filed by the assessee before the Assessing Officer on 25/02/2015 has been rejected by a two sentence order. It was assailed on the grounds of being non- speaking and arbitrary. In the circumstances it was his limited prayer that the present stay petition along with the appeal may be directed to be fixed for hearing on 22nd May 2015 as on the said date on similar issue appeal of the Revenue in 2008-09 Assessment Year is fixed for hearing before the Co-Ordinate Bench. 4.2 The Ld. CIT DR Ms. Anuradha Mishra considering the facts had no objection if the appeal along with stay petition is fixed for hearing on 22nd May 2015.

5. We have heard the rival submissions and perused the material available on record. On a consideration of the following order dated 31st March 2015 passed by the Assessing Officer, we are of the view that the said order cannot be upheld. For ready reference we extract the same hereunder:

"Kindly refer to your application dated 25.02.2015 received in this office for stay of demand for A.Y. 2010-11. In this regards, you are directed to pay atleast 50% of outstanding demand, so that your stay petition will be consider at the earliest."

5.1. A perusal of the above order shows that the Ld. Assessing Officer instead of disposing the stay petition puts a pre-condition for considering the same. The pre- payment of 50% of the outstanding demand cannot be said to be due exercise of the Ld. Assessing Officer's powers. In the hierarchy of Tax Administration, the Assessing Officer in the exercise of his powers is required to pass a speaking order. The above quoted order unfortunately does not address the settled legal

Page 4 of 6 principles which equally apply to stay applications before the Tax authorities, as laid down in Order 39,Rules 1 & 2 of the Code of Civil Procedure. As per settled legal parameters, the stay order is necessarily required to be tested on the following touchstone namely:-(a) If there is a prima facie arguable case in favour of the assessee; (b) Whether the financial position of the assessee does not permit payment of the demand ; (c) Whether the balance of convenience is in favour of the assessee and (d) Whether the demand is well secured with no loss to the revenue. None of these issues evidently have been considered. We also note that the issue as per the submissions made is stated to be identical to the facts and circumstances of 2008-09 assessment year. The said assessment year is stated to be the base year. It is also stated that departmental appeal on similar issue is listed for hearing on 22nd May 2015. Accepting the statements made at Bar the Revenue is given time to respond to the same on the next date of hearing, as admittedly the Ld. CIT DR had no occasion to consider the relevant record. Having so held, we also find that from the date of passing the aforequoted order by the Assessing Officer on 31st March 2015, till 8th May 2015 no recovery proceedings against the assesssee have been made by the Revenue. Accordingly after hearing the parties on the same the Revenue is directed to maintain status quo thereon till the next day of hearing. The said order was pronounced in the Open Court in the presence of the parties.

6. In view of the above for the purposes of the present stay petition vide this interim order the stay petition along with the appeal in ITA 2359/Del/2015 is directed to be listed for hearing on 22nd May 2015. The said order was pronounced in the presence of the parties on the date of hearing itself.

7. Addressing the application moved by the Ld. Standing Counsel in the present stay petition, the same is listed for hearing on 12th June 2015. In the context of the same we deem it appropriate to refer to certain observations made by their Lordships in the judgment of the Hon'ble Apex Court in the case of Subrata Roy Sahara Vs. Union of India and ors (2014) 8 SCC 470 so as to invite attention to the issues which we may need to address:-

Page 5 of 6 "......................The Bench would have declined to recuse itself from the matter, even if the "other side" had been a private party. For the oath of office of the Supreme Court requires the Bench to discharge its obligations, without fear of favour. The Supreme Court therefore also commends to all courts, to similarly repulse all baseless and unfounded insinuations, unless of course, they should not be hearing a particular matter, for reasons of their direct or indirect involvement. The benchmark that justice must not only be done but should also appear to be done, has to be preserved at all costs."

..................The oath of office of the Supreme Court requires the present Bench to go ahead with the hearing. Not hearing the matter would constitute an act in breach of the oath of office of Supreme Court, which mandates the Court to perform the duties of its office, to the best of its ability, without fear of favour, affection of ill will. A party's posturing antics, aimed at bench-hunting or bench hopping ( or bench-avoiding), would not be allowed. Affronts, jibes and carefully and consciously planned snubs would not deter the Court from discharging its onerous responsibility. The present Bench could at any time during the course of hearing walk out and make way for another Bench to decide the matter, if ever it felt that would be the righteous course to follow." It is not for a Court to tender any explanation to any litigant or to his counsel. Accordingly, it should never be considered as obligatory on the part of the Supreme Court to tender any such explanation. Undoubtedly, it is open to a party to seek review of an order passed by the Supreme Court under Article 137 of the Constitution of India. Or to file a curative petition after a review petition had been rejected as laid down by the Supreme Court in Rupa Ashok Hurra, (2002)4 SCC 388 if it is felt that a serious mistake had been committed."

8. In respect of the Application moved by the Ld. Standing Counsel, the Revenue after seeking appropriate instructions from the Chief Commissioner of Income Tax (ITAT)/ Chairman CBDT etc., is directed to file their reply in writing on or before 12th June 2015.

The order is pronounced in the open court on 18th of May , 2015.

Sd/- Sd/-

(J. S. REDDY ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18 /05/2015 *R. Naheed/A. K. Verma/Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

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