IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER SA NO. 333/MUM/2016 : (A.Y : 2011-12) (in ITA NO. 963/MUM/2016) L Oreal India Private Limited Vs. ACIT-7(1)(2), Mumbai A-Wing, 8th Floor, Marathon (Respondent) Futurex, N.M. Joshi Marg, Lower Parel, Mumbai 400 013 PAN : AAACL0738K (Applicant) Applicant by : Shri Nishant Thakkar Respondent by : Shri Mallikarjun Utture Date of Hearing : 14/10/2016 Date of Pronouncement : 14/10/2016 ORDER PER SAKTIJIT DEY, JM : By this application, assessee seeks extension of stay granted earlier vide order in S.A No. 89/Mum/2016 dated 18.3.2016. 2. Requesting for extension of stay ld. AR submitted, besides refund of Rs.8,96,34,687/- for A.Ys 2014-15 and 2015-16 which is still in custody of Department, assessee is to receive refund of about Rs.56.74 crores from Department after order giving effect to passed by Assessing Officer for A.Ys 2008-09, 2009-10 and 2010-11. He submitted, as against refund of aforesaid amounts due to 2 L Oreal India Pvt. Ltd. SA No. 333/Mum/2016 assessee, balance outstanding demand for impugned assessment year amounts to Rs.12.95 crores which comprises of tax component of Rs.4.88 crores and interest of Rs.8.06 crores. In support of aforesaid contention, ld. AR placed on record letter dated 7.10.2016 of Assessing Officer. 3. ld. DR referring to letter dated 23.9.2016 of ACIT, Circle- 7(1)(2), Mumbai (Assessing Officer) submitted, though, Tribunal in stay order dated 18.3.2016 had directed Assessing Officer to adjust refunds relating to A.Ys 2014-15 and 2051-16 against outstanding demand, however, by virtue of provision contained u/s 143(1D) of Income Tax Act, 1961 (in short Act ), returns filed by assessee for A.Y 2014-15 and 2015-16 cannot be processed for refund as notices u/s 143(2) for scrutiny assessment have been issued. In this context, he also referred to CBDT instruction no. 15 dated 13.1.2015. ld. DR submitted, necessary directions may be issued to adjust refund due to assessee against impugned outstanding demand. 4. We have considered submissions of parties and perused materials on record. On careful reading of order dated 18.3.2016 in S.A No. 89/Mum/2016, it is very much clear that there is no direction by Tribunal, either express or even otherwise, for adjustment of refund pertaining to A.Ys 2014-15 and 2015-16 against impugned outstanding demand. Therefore, content of letter dated 23.9.2016 of Assessing Officer imputing adjustment of refund for said years on Tribunal is misleading and not correct statement of fact. Tribunal merely noted that for A.Ys 2014-15 and 2015-16 3 L Oreal India Pvt. Ltd. SA No. 333/Mum/2016 assessee had paid taxes in excess of it s returned liability by Rs. 9 crores, though assessments were pending for such years. Considering overall position and on consideration of equity, Tribunal had granted stay on recovery of balance outstanding demand, and not on basis that refunds for A.Ys 2014-15 and 2015-16 were to be adjusted against then impugned demand. Moreover, issuance of notices u/s 143(2) for A.Ys 2014-15 and 2015-16 will not tantamount to creation of demand against assessee, unless and until assessment orders for said assessment years are passed and demand is crystallized. Until crystallization of demand, assessee s claim of refund remains valid. As far as contention of Department that by virtue of provisions of Sec. 143(1D) of Act, refund for A.Ys 2014-15 and 2015-16 cannot be adjusted as scrutiny assessment is pending, in our view, it has no relevance to issue of stay. Even otherwise also, we have noted from letter dated 18.2.2015 of Assessing Officer, copy of which was placed before us by ld. AR, neither provisions contained u/s 143(1D) of Act nor CBDT instruction no. 15 dated 13.1.2015 has prevented Assessing Officer from adjusting refund of Rs. 18 crores pertaining to A.Y 2013-14 against outstanding demand for A.Y 2010-11. Be that as it may, it is evident from letter dated 7.10.2016 of Assessing Officer, copy of which is placed on record by ld. AR, as against modified outstanding demand of Rs.12.95 crores (Tax Rs. 4.88 crores and Interest Rs. 8.06 crores) for impugned assessment year, assessee is to receive refund of Rs. 56.70 crores by virtue of order giving effect to dated 1.9.2016 passed by Assessing Officer for A.Ys 2008-09, 2009-10 and 2010-11. Thus, as per aforesaid letter of Assessing Officer, even crystallized 4 L Oreal India Pvt. Ltd. SA No. 333/Mum/2016 refunds due to assessee far outweighs outstanding demand for impugned assessment year. Thus, there being no change in facts and circumstances on basis of which stay was granted earlier to assessee and also considering fact that assessee is to get huge amount of refund from Department, we are inclined to extend stay granted earlier by directing stay on recovery of impugned outstanding demand, either by way of payment or otherwise, for further period of 180 days or till disposal of corresponding appeal of assessee, whichever is earlier. 5. In result, stay application is allowed. Order pronounced in open court on 14th October, 2016. Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date : 14th October, 2016 *SSL* Copy to : 1) Appellant 2) Respondent 3) CIT(A) concerned 4) CIT concerned 5) D.R, K Bench, Mumbai 6) Guard file By Order Dy./Asstt. Registrar I.T.A.T, Mumbai L’Oreal India Private Limited v. ACIT-7(1)(2), Mumbai