M/S Telenor (India) Communications Private Limited (Earlier Known As M/S Telewings Communications S v. Assistant Commissioner of Income Tax, Circle 25(1), New Delhi & Ors

order will be cancelled;

(ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if the assessee has not co-operated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations;

(iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section 245."

¶10No doubt, the AO has a discretion of referring the matter to the CIT if he is of the opinion that the assessee's case in any given matter, deserves consideration for relief beyond the mandated 15% pre-deposit: evident from the phrase "the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.)" . In the present case, no doubt the AO did not in the first

instance so refer the matter to the higher official; however, this court's order had clearly stated that the issue with respect to such relief should be reconsidered. If the AO felt constrained by the terms of the circular, he could have sought a clarification; at worst, he could have referred the matter to the Commissioner, if he thought that he did not have the power to grant such relief. What he could not have done was to revisit the entire issue as to whether the relief to the extent of 85% waiver of demand deposit could be given. This is for the reason that the previous order, whereby that relief was given, clearly took note of the relevant facts and granted the benefit to the assessee, as can be seen from the following extract (of the AO's previous order dated 22.02.2017): "Considering the facts and circumstances of the case and CBDT's instruction dated 22-2-2016 which modified the existing instruction no. 1914 dated 21-03-1996 to provide that where an appeal against the assessment order is pending with the first appellate authority the AO shall grant the stay of demand till the disposal of appeal, if the assessee has deposited 15% of outstanding demand. In your case the demand for the A.Y. 2014-15 of Rs.4,18,13,06,110/- will be stayed till the disposal of appeal by CTT(A) subject to payment of 15% of the demand i.e. Rs.62,71,95,920/-. This is subject to the following conditions…"

¶11The order of this court did not set aside the above order of the AO and direct him to look into the matter afresh. What it did require him to do was to exercise discretion and consider whether further relief could be granted. The scope of remand by a higher court or authority limits and correspondingly circumscribes the jurisdiction of the lower authority exercising its powers. This was explained in the Supreme Court judgment reported as Nainsingh v Koonwarjee AIR 1997 SC 997 in the following words:

"The first appellate court reversed the findings of the trial court on those issues. It came to the conclusion that the civil court had jurisdiction to entertain the suit. It further held that though in view of the abolition of the jagirs, the suit properties had vested in the State, it was for the State to get itself impleaded if it is interested in this litigation and as the State had not chosen to get itself impleaded, it was open to the plaintiff to press the suit. In view of those conclusions, the appellate court set aside the decree of the trial court and remanded the suit to the trial court for deciding the other issues left undecided. After the remand, the trial court negatived every one of the contentions taken by the defendants and decreed the suit as prayed for. In appeal that decree was confirmed. In second appeal the High Court of Madhya Pradesh agreed with the trial court and the appellate court on the findings given on all issues excepting the issue relating to the effect of abolition of the jagirs on the suit. On that issue, it came to the conclusion that in view of the abolition of jagirs under the Jagir Abolition Act, the plaintiff had lost his title to the suit properties and therefore he could not get a decree for possession of the suit properties. It rejected the contention of the plaintiff that that issue is concluded by the decision of the appellate court made before remand as the same had not been appealed against. It opined that the court had inherent power to consider the correctness of that order. It accordingly allowed the appeal and dismissed the suit. The High Court, in our opinion, erred in holding that the correctness of the remand order was open to review by it. The order in question was made under rule 23, Order 41, Civil Procedure Code. That order was appealable under Order 43 of that Code. As the same was not appealed against, its correctness was no more open to examination in view of s. 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness."

¶12In view of this position, the court's view is that the AO could not have revisited the matter, as if there were a fresh or open remand. The court

notices that the AO – after rejecting the assessee's claim for benefit (i.e beyond 85% waiver) directed payment of ` 203 crores after adjusting ` 27,93,09,100/- refund. This relief (of adjustment of ` 27,93,09,100/- refund) had not been considered in the earlier order. In these circumstances, it is held that the impugned order, to the extent it reviewed the previous order (dated 22nd February, 2017) cannot be sustained. The relief granted (i.e adjustment of refund amount of `27,93,09,100/-) is, however, upheld. Accordingly, the impugned order, to the extent it reviewed the previous order of 22nd February 2017 and directed payments of ` 62,71,95,920/- is set aside. However, to the extent that it granted relief under Para (E) of the instruction (which the AO was within his rights to grant in terms of the remand) is upheld. Therefore, the assessee is directed to deposit the balance amount, i.e. `34,78,86,820/- (` 62,71,95,920/- minus `27,93,09,100/-) within two weeks, which would be sufficient compliance of the orders.

¶13The writ petition partially succeeds and is allowed in the above terms, without any order as to costs.

S. RAVINDRA BHAT (JUDGE)

NAJMI WAZIRI (JUDGE) MARCH 29, 2017

* IN THE HIGH COURT OF DELHI AT NEW DELHI Decided on: 29.03.2017 + W.P.(C) 2539/2017, C.M. APPL.10957-10958/2017 M/S. TELENOR (INDIA) COMMUNICATIONS PRIVATE LIMITED (EARLIER KNOWN AS M/S. TELEWINGS COMMUNICATIONS SERVICES PRIVATE LIMITED ..... Petitioner Through: Sh. Balbir Singh, Sr. Advocate with Sh. Prakash Kumar, Ms. Rubal Maini and Ms. Rashmi Singh, Advocates. Versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 25(1), NEW DELHI AND ORS. ..... Respondents Through: Sh. Sanjay Jain, ASG with Sh. Rahul Chaudhary, Sr. Standing Counsel, Ms. Lakshmi Gurung, Jr. Standing Counsel, Ms. Rhea Verma and Sh. Kartik Rai, Advocates. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI MR. JUSTICE S. RAVINDRA BHAT % 1. The petitioner's grievance is that this court's order in W.P.(C) 1874/2017 (decided on 1st March, 2017) has not been given effect to. It contends that the Assessing Officer (hereafter "AO", one of the respondents arrayed in these writ proceedings) whilst seemingly giving effect to the directions in that order, has deprived it of the previous relief given by him. 2. The petitioner had sought benefit of stay of recovery of demands for Assessment Year (AY) 2014-15, to the tune of ` 4,18,13,06,110/- subject to its depositing ` 62,71,95,920/-. The petitioner had relied on instructions of the Central Board of Direct Taxes embodied in its Office Memorandum (OM) dated 29.02.2016, to say that it was entitled to the facility of stay of demand in excess of 15% in the exceptions spelt out in Para 4B(b),which reads as under:- "(b) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case when addition on the same issue has ken confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessees, etc.) - the assessing officer shall refer the matter to the administrative Pr.CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand." 3. In its writ petition, the petitioner had previously contended that the AO had not considered the top line credit adjustment which the petitioner was previously reflecting in its books towards substantial services rendered till the end of any financial year but for which the contractual and legal liability to render services in respect of the unutilized consideration subsisted. It was then argued that this amounted to a substantial sum of about ` 220 crores. It was further argued, besides, that the license fee adjustment on account of the telecom policy in the wake of the Supreme Court's judgment in 2G Spectrum's case, the amount set off i.e. ` 600 crores out of the unutilized license fee for the issuance of a new Spectrum License in terms of the policy. The revenue's treatment of that amount as 'capital' is contested. The petitioner also complained that the AO had not taken into account the refund standing to the credit of the petitioner to the tune of about ` 27 crores. 4. After considering the parties' submissions, this court had disposed of the petition, in terms of the following operative order: "8. We have considered the submissions of the parties. The impugned order dated 22.02.2017, undoubtedly, has given effect to the OM, relied upon by the petitioner in the sense that the demand has been stayed subject to substantial relief of 85%. However, the circular - as noticed earlier and highlighted by the petitioner also carved out an expenditure in regard to certain "covered matters" or in regard to other contentious issues, the condition of 15% pre-deposit can be relaxed. The petitioner contentions in this regard are three fold. The impugned order does not disclose whether the AO had an occasion to consider or examine these issues. In these circumstances,