Review Petn. Nos. 108 to 113 of 2017

Manoj Munshi, Ms. Veena Mandlik, JJ.

Manoj Munshi, for the Petitioner :
Ms. Veena Mandlik, for the Respondent

JUDGMENT

Regard being had to the similitude in the controversy involved in the present cases, the writ petitions were analogously heard and by a common order, they are being disposed of by this Court. Facts of Review Petn. No. 108 of 2017 are narrated hereunder.

2. The present review petition has been filed for reviewing order dt. 12th Jan., 2017, passed in Writ Petn. Nos. 7779, 7781, 7785, 7788, 7792 and 7794 of 2016. There was a common order passed in all the cases on 12th Jan., 2017. In fact, the petitions were filed against the order dt. 8th Nov., 2016, by which the applications for stay of demand under s. 220(6) of the IT Act was disposed of by the learned Addl. CIT, Range 3, Indore.

3. Mr. Manoj Munshi, learned counsel for the petitioner has argued before this Court that the circular of the CBDT was not taken into account ie., Circular dt. 29th Feb., 2016, while passing the impugned order. However, at the outset learned counsel for the petitioner has drawn attention of this Court towards the order dt. 25th March, 2017, passed by the Dy. CIT, Indore in respect of total outstanding demand. The aforesaid order reads as under :

Dy. CIT 3(1) Indore
Room No. 306, Aayakar Bhawan Annexe, Opp. White Church, Indore
F.No. Dy. CIT-3(1)/IND/Revoery/2016-17 dt. 25th March, 2017

To,
M/s Madhya Pradesh Audyogik Kendra
Vikas Nigam (Indore) Ltd.
1 Floor, Free Press Complex,
3/54, Press Complex
Indore

Sir/Madam,

Sub. : Outstanding demand of Rs. 51,98,64,120 regarding.
Ref.: 1 Letter of Principal Secretary Government of MP Commerce, Industry

and Employment Department dt. 23rd March, 2017. As per this office records the following demand is outstanding against you :

2. You are hereby requested to deposit 15 per cent of outstanding demand ie., of Rs. 7,79,79,618. Out of which 2.5 crore has been deposited by you as such please deposit the remaining demand of Rs. 5,29,79,618 and produce counterfoil of challan on or before 28th March, 2017, at 11:00 A.M., in the Office of undersigned, failing which coercive measures to recover the demand by invoking various provisions of Chapter XVII-D of the IT Act, 1961 shall be initiated.

sd/-
(P. K. Singi)
Dy. CIT
Circle 3(1), Indore

4. The aforesaid order was passed in the case of Madhya Pradesh Audyogik Kendra Viikas Nigam Ltd., and a similar order has been passed in respect of M/s SEZ, Indore Ltd. The same reads as under :

Dy. CIT 3(1) Indore

Room No. 306, Aayakar Bhawan Annexe, Opp. White Church, Indore
F.No. Dy. CIT-3(1)/IND/Revoery/2016-17 dt. 25th March, 2017

To,
M/s SEZ Indore Ltd.
1 Floor, Free Press Complex,
3/54, Press Complex
Indore
Sir/Madam,

Sub. : Outstanding demand of Rs. 86,03,42,100 regarding.

Ref.: 1 Letter of Principal Secretary Government of MP Commerce, Industry

and Employment Department dt. 23rd March, 2017. As per this office records the following demand is outstanding against you :

2. You are hereby requested to deposit 15 per cent of outstanding demand i.e., of Rs. 12,90,51,315 and produce counterfoil of challan on or before 28th March, 2017, at 11:00 A.M., in the Office of undersigned, failing which coercive measures to recover the demand by invoking various provisions of Chapter XVII-D of the IT Act, 1961 shall be initiated

sd/-
(P. K. Singi)
Dy. CIT
Circle 3(1), Indore

Meaning thereby, the Department has passed an order directing the assessee to deposit 15 per cent of the total outstanding demand.

5. This Court is of the considered opinion that once the Department has passed an order permitting the assessee to deposit 15 per cent of the demand, the order passed by this Court dt. 12th Jan., 2017, deserves to be modified. The petitioners are permitted to deposit 15 per cent of the outstanding demand and the appeal shall be heard on merits.

6. At this stage, Mr. Munshi has argued before this Court that the circular issued by the CBDT dt. 21st Aug., 1996, 6th March, 1998 and 16th Jan., 1999, have been considered by the Hon'ble supreme Court and, therefore, in the light of the judgments delivered by the Hon'ble Supreme Court and various High Courts, the petitioner be directed to deposit only 15 per cent of the demand.

7. This Court has carefully gone through the Circulars issued by the CBDT. In the case of Catholic Syrian Bank Ltd. vs. CIT (2012) 248 CTR (SC) 1 : (2012) 68 DTR (SC) 1 : (2012) 3 SCC 784. The Hon'ble Supreme Court in para18 has dealt with the effect of Circular issued by the CBDT.

Para18 of the aforesaid judgment, reads as under :

18. Now, we shall proceed to examine the effect of the circulars which are in force and are issued by the CBDT (for short, the Board') in exercise of the power vested in it under section 119 of the Act. Circulars can be issued by the Board to explain or tone down the rigours of law and to ensure fair enforcement of its provisions. These circulars have the force of law and are binding on the income-tax authorities, though they cannot be enforced adversely against the assessee. Normally, these circulars cannot be ignored. A circular may not override or detract from the provisions of the Act but it can seek to mitigate the rigour of a particular provision for the benefit of the assessee in certain specified circumstances. So long as the circular is in force, it aids the uniform and proper administration and application of the provisions of the Act. [Refer to UCO Bank vs. CIT (1999) 154 CTR (SC) 88 : (1999) 4 SCC 599)].

8. Hon'ble the Supreme Court in the case of UCO Bank vs. CIT (1999) 154 CTR (SC) 88 : (1999) 4 SCC 599has again dealt with the effect of circulars issued by the CBDT.

9. High Court of Punjab & Haryana at Chandigarh in the case of Jindal Steel & Power Ltd. vs. Principal CIT (2016) 290 CTR (P&H) 342 : (2016) 143 DTR (P&H) 185 : (2017) 391 ITR 42 (P&H), has permitted the assessee to deposit 15 per cent of the total demand in similar circumstances during the pendency of the appeal. Paras 27 and 30 of the aforesaid judgment reads as under :

27. As we observed earlier in the present case by the impugned order dt. 14th June, 2016, the petitioner was required to deposit 15 per cent of the outstanding demand, namely, Rs. 41.64 crores. This figure attained finality. At the cost of repetition, the AO did not refer the matter to the Administrative Principal CIT for an amount higher than 15 per cent of the amount to be deposited as a condition for stay. This in fact indicates that the last sentence in para 5 of the order dt. 14th June, 2016, granted the AO the right to adjust any refund which may arise in favour of the assessee in respect and to the extent of the said 15 per cent of the demand only. In any event, even if it entitles the AO to adjust any refund against the entire tax demand, it would be contrary to the instructions of the CBDT contained in the Office Memorandum dt. 29th Feb., 2016.

30. In the circumstances, the writ petition is disposed of by holding that the petitioner shall be entitled to a stay of the demand subject to its depositing the installments as required by the order dt. 14th June, 2016, and that the future refunds can be adjusted only to the extent of the balance amount directed to be paid as a condition for the stay.

10. High Court of Bombay at Goa in the case of Sesa Resources Ltd. vs. Asstt. CIT & Ors. (Writ Petn. No. 117 of 2017, decided on 2nd Feb., 2017, in para 7 has held as under :

7. We have heard the submissions of the learned counsel and we have also gone through the records. For the reasons stated in the said judgment of this Court in the case of Andrew Communications India (P) Ltd.(supra) and as it is not in dispute that the facts there in are identical to the facts in the present case, we have no reason to take a contrary view in the present petition. Admittedly, 15 per cent of the disputed amount has already been recovered by the respondent- Revenue and such amount is covered by the Office Memorandum dt. 29th Feb., 2016 issued by the CBDT. In such circumstances we find that the respondents were not justified to pass the impugned attachment Notices under s. 226(3) of the Act. The claim of the petitioner, at this stage, seeking refund of the amounts attached pursuant to such directions, is not at all justified and cannot be granted in the present petition.

11. In the light of the Office Memorandum issued by the CBDT, especially keeping in view the fact that the dispute is between Government of India and company/Department owned and controlled by the State Government and also in the light of the order dt. 25th March, 2017, is of the opinion that in case the assessee deposits 15 per cent of the outstanding demand, all the appeals shall be heard on merits.

12. With the aforesaid, the present review petitions stand allowed and disposed of.