The Supreme Court on Wednesday sought response from Vodafone India on an appeal filed by the income tax department in a tax matter.
A bench headed by Justice Ranjan Gogoi issued notice to the telecom company on the department’s appeal. Since the impugned orders are no longer in force, so the impugned order is purely academic.
Additional Solicitor General Tushar Mehta argued that the Bombay HC was not justified in holding that the tribunal’s decision to extend the recovery of the disputed demand was without jurisdiction as it had resulted in stay beyond 365 days, which is in breach of the third proviso to Section 254(2A) of Income Tax Act, 1961.
The third proviso provides that if an appeal is not decided within the period allowed or the period or period so extended or allowed, the order of stay shall stand vacated after the expiry of such period or periods.
The department had in February 2011 determined the total income of Vodafone at Rs 632 crore, which had resulted in a demand of over R297 crore. This was challenged by the assessee in the Income Tax Appellate Tribunal, which stayed the demand till September 30, 2011. The stay, by various orders from time to time, got extended till January 2015. Since the aggregate period of extension of stay of demand had already transcended beyond 365 days, the department challenged the tribunal’s order before the HC, which dismissed its appeal in March this year.