Mondelez India Foods P. Ltd, vs Assessee
- CitationITA No. 2214/Mum/2014)
Ratio decidendi
The rule this decision rests on
Where the Assessing Officer has attached a bank account to recover a tax demand, the recovery of funds from that account without first furnishing the assessee reasonable prior notice is contrary to the rule of law and is impermissible; the assessee must be given reasonable opportunity to make a representation or seek legal remedy before any amount is withdrawn. Where the statutory or administrative stay on recovery of a tax demand has expired and the Assessing Officer proceeds to attach and recover the demand, the Tribunal may, in the exercise of its power to grant a stay pending appeal, direct that recovery be stayed for a specified period or until disposal of the appeal, whichever is earlier, having regard to the amount already recovered and the principles laid down by the jurisdictional High Court.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s. Mondelez India Foods P. Ltd. Addl. CIT, Range 5(1) (Formerly Cadbury India Ltd.) Mumbai Mondelez House, Unit No. 2001 20th Floor, Tower-3 (Wing C) Vs. India Bulls Finance Centre Parel, Mumbai 400013 PAN - AAACC04060H Applicant Respondent
Applicant by: Shri Nishant Thakkar Respondent by: Shri Vijay Kumar Bora
Date of Hearing: 20.03.2015 Date of Pronouncement: 20.03.2015
ORDER
Per N.K. Billaiya, A.M.
This stay application moved by the assessee pertains to A.Y. 2009-10.
2. Learned counsel for the assessee stated that around 13 issues involved in this year are identical to the issues involved in A.Y. 2008-09 and there are only four additional issues. It is also pointed out that out of the total tax liability excluding interest of `86.50 crores, `25.25 crores pertain to the issues which are common with A.Y. 2008-09. Tax on additional issues comes to around `61.66 crores. The counsel also drew our attention to the pending refund adjustment amounting to `8,04 crores, tax paid pursuant to the stay granted by the AO of `20 crores and the amount coercively recovered by the Department of `23.52 crores. Thus, out of the total tax liability of `86.50 crores the Department has already recovered `53.46 crores, which is more than 50% of the outstanding tax demand. The counsel accordingly prayed for grant of stay.
3. The learned D.R. strongly opposed to granting of stay. It is the say of the learned D.R. that the assessee must be asked to pay some amount.
2 SA No. 103/Mum/2015 M/s. Mondelez India Foods P. Ltd.
4. Having heard the rival submissions we have carefully perused the material evidence brought on record before us. The AO, vide his letter dated 21.03.2014, granted stay upto 28.02.2015 on payment of `20 crores before 26.03.2014. `20 crores were paid by the assessee as per the stay order of the AO. Vide letter dated 04.03.2015, which was received by the assessee on 10.03.2015, the AO pointed out that the stay granted has expired on 28.02.2015. Assessee was asked to pay the demand immediately. On the very same day the bank accounts were attached and a sum of `23.52 crores were recovered from the attached bank account. We do not appreciate such action of the AO as this is against the elementary principles of rule of law. The Hon'ble Bombay High Court, in the case of DIT (Exemption) 361 ITR 469 has also shown its displeasure on such actions of the Revenue Authorities. The Hon'ble Bombay High Court has laid down certain guidelines in the case of UTI Mutual Fund 345 ITR 71 wherein the Hon'ble High Court has stated that "when a bank account has been attached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to remedy in law". The action of the AO is in total defiance to the principles laid down by the Hon'ble jurisdictional High Court. Considering the facts in totality, in the light of the principles laid down by the Hon'ble jurisdictional High Court we direct the AO to stay recovery of demand for a period of six months or till the disposal of the appeal, whichever period expires earlier. We expect the Revenue Authorities to show some respect to the judicial decision of the Hon'ble jurisdictional High Court. Stay is granted. Since the appeal is posted for hearing on 05.05.2015, which is in the knowledge of both the parties, no separate notice is required.
5. In the result, the stay application filed by the assessee is allowed.
Order pronounced in the open court on 20th March, 2015.
Sd/- Sd/- (Vijay Pal Rao) (N.K. Billaiya) Judicial Member Accountant Member
Mumbai, Dated: 20th March, 2015 3 SA No. 103/Mum/2015 M/s. Mondelez India Foods P. Ltd. Copy to:
1. The Appellant 2. The Respondent 3. DRP-I, Mumbai 4. The CIT/DIT concerned 5. The DR, "K" Bench, ITAT, Mumbai By Order
//True Copy// Assistant Registrar ITAT, Mumbai Benches, Mumbai n.p.
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