Refusing to grant interim relief to Google, the Karnataka High Court, on Wednesday asked the network giants to deposit 26 crores during the pendency of the appeal before the Appellate Tribunal.
Last month, the Income Tax Appellate Tribunal, Bengaluru has refused grant stay to the Company after losing a six year old tax avoidance case last month. Last month, the ITAT had upheld the order of the department treating the assessee as “the assessee in default” for non-deduction of tax in respect of payment made by the assessee to Google Ireland Ltd., as the same was in the nature of royalty both under the provisions of domestic law as well as under DTAA between India and Ireland in the order passed by the TDS officer u/s 201(1) & 201(1A) of the Income Tax Act, 1961.
Subsequently, the Tribunal in a separate order, has refused grant stay to the Company after losing a six year old tax avoidance case last month.
Before the High Court, the Company pleaded that the appeal is slated for final hearing on 23/11/2017 and the Court may put the parties to terms for expeditious disposal of the appeal. it further submitted that in the interregnum petitioner’s rights cannot be jeopardized by the revenue by precipitating the matter on account of non-extension of stay by the Tribunal on 07/11/2017. He therefore, submits that interim arrangements may be made pending disposal of the appeals.
Rejecting the arguments, Justice B V Nagaratna said that “Having heard learned counsel for the respective parties at length, I find that granting of any interim order in these writ petitions and keeping the writ petitions pending before this Court would not serve any purpose particularly, when the matter is set down for final arguments before the Appellate Tribunal tomorrow (23/11/2017). In the circumstances, a direction is issued to the Tribunal to dispose of the appeal in an expeditious manner i.e., on or before 31/01/2018. It is needless to observe that in view of the specific direction issued by this Court for expeditious disposal of the appeal by the Appellate Tribunal, both parties are directed to co-operate with the Tribunal.”
“It is noted that the demand is about Rs.129,00,00,000/- (Rupees one hundred and twenty nine crore only). It is an admitted fact that a sum of Rs.70,00,00,000/- (Rupees seventy crore only) is deposited by the petitioner which amounts to about 55% of the outstanding demand. In order to further protect the interest of the revenue and keeping in mind the fact that the appeal is slated for final arguments before the Appellate Tribunal and balancing the equities on both sides, the petitioner is directed to retain a balance of another 20% in Account No.0037238007 maintained with CITI Bank, M.G.Road Branch, Bengaluru-560 001. The said balance is rounded off to Rs.26,00,00,000/- (Rupees twenty six crore only) shall be maintained pending disposal of the appeal by the Appellate Tribunal. It is directed that the respondent shall not take further steps pursuant to order dated 15/11/2017 (Annexure-H) and notice dated 20/11/2017 till the disposal of the appeal by the Appellate Tribunal,” the Court said.
Subscribe Taxscan Premium to view the Judgment
