Priya Soparkar 1 904 wp 728-20-o IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.728 OF 2020 Play Games 24 x 7 Private Limited, Mumbai. Petitioner V/s. Assistant Commissioner of Income-tax - 13(1)(2), Mumbai and ors. Respondents Mr. J. D. Mistri, Senior Advocate with Mr. Atul K. Jasani, Advocate for Petitioner. Mr. Akhileshwar Sharma, Advocate for Respondents. CORAM : UJJAL BHUYAN & MILIND N. JADHAV, JJ. DATE : MARCH 13, 2020 P.C.:- 1. Heard Mr. J. D. Mistri, learned senior counsel for petitioner; and Mr. Akhileshwar Sharma, learned standing counsel, Revenue for respondents. 2. By filing this petition under Article 226 of Constitution of India, petitioner seeks quashing of orders dated 12th February, 2020 passed by respondent No.1 rejecting application for stay of demand of petitioner as well as order dated 21st February, 2020 passed by respondent No.2 also rejecting application for stay of petitioner and further seeking stay of recovery of demand by respondents till disposal of appeal filed by petitioner before Commissioner of Income Tax (Appeals) against order of assessment. Uploaded on - 17/03/2020 Downloaded on - 18/03/2020 10:53:12 Priya Soparkar 2 904 wp 728-20-o 3. Shorn of details, it may be mentioned that respondent No.1 as Assessing Officer passed assessment order dated 28th December, 2019 in respect of petitioner for assessment year 2014-15 under Section 143(3) r/w Section 263 of Income Tax Act, 1961 (briefly "the Act" hereinafter). 4. Petitioner is company assessed to income tax under jurisdiction of respondent No.1. It is engaged in business of providing platform for online and mobile games. In assessment order, respondent No.1 held that petitioner had failed to bring on record compliance of tax deducted at source under Section 194B of Act and therefore applied provisions of Section 40(a)(ia) of Act. Respondent No.1 added 30% of winning payout of Rs.6,20,80,70,600.00 towards winning from lottery or crossword puzzles and non- deduction of TDS which works out to Rs.1,86,24,21,180.00, to total income of assessee under Section 40(a)(ia) of Act. This was followed by issuance of notice of demand of even date under Section 156 of Act calling upon petitioner to pay sum of Rs.1,11,50,90,540.00 as amount of tax due for assessment year 2014-15. 5. Aggrieved by order of assessment, petitioner preferred appeal before Commissioner of Income Tax (Appeals)-21, Mumbai, also referred to as first appellate authority, on 22nd January, 2020 bearing acknowledgment No.294727091220120. Uploaded on - 17/03/2020 Downloaded on - 18/03/2020 10:53:12 Priya Soparkar 3 904 wp 728-20-o 6. Simultaneously, petitioner also filed application before respondent No.1 on 23rd January, 2020 seeking stay of demand under Section 220(6) of Act. By order dated 12th February, 2020, respondent No.1 rejected application for stay of demand, granting liberty to petitioner to pay 20% of total demand within 3 days in which event it was stated that outstanding demand would be stayed. 7. Being aggrieved, petitioner preferred further stay petition dated 14th February, 2020 before respondent No.2. By order dated 21st February, 2020, respondent No.2 directed petitioner to pay atleast 5% of total outstanding demand as per schedule mentioned therein subject to which it was stated that demand would be stayed. 8. Aggrieved, present writ petition has been filed. 9. Mr. Mistri, learned senior counsel has referred to Section 194B of Act and submits that petitioner is only providing platform for playing of card games by users. In terms of Section 194B of Act, petitioner has been deducting income tax at prescribed rate for every game where winnings exceed Rs.10,000.00. Other than that, petitioner has nothing to do with card games played on its platform. Its earning is only by way of commission earned on games. He has also referred to provisions contained in Section 40(a)(ia) of Act to contend that while computing income chargeable under head "profits and gains of Uploaded on - 17/03/2020 Downloaded on - 18/03/2020 10:53:12 Priya Soparkar 4 904 wp 728-20-o business or profession", 30% of any sum payable by assessee to resident on which tax is deductable at source and such tax has not been deducted or after deduction has not been paid, shall not be deducted. He submits that considering nature of business carried on by petitioner question of applicability of Section 40(a)(ia) does not arise. Taking exception to way in which respondent Nos.1 and 2 have dealt with stay application of petitioner, Mr. Mistri has placed reliance on decision of this court in UTI Mutual Fund Vs. Income Tax Officer, 345 ITR 71, in which this court laid down certain guidelines for revenue authorities to be borne in mind while dealing with stay application. Referring to guideline No.3, he submits that in so far previous assessment years of petitioner are concerned, provisions of Section 40(a)(ia) of Act were never applied to petitioner. He therefore, submits that as per guideline No.3 if Assessing Officer has taken view contrary to what has been held in preceding previous years without there being material change in facts or law, that will be relevant consideration in deciding application for stay. This aspect of matter was completely overlooked by respondent Nos.1 and 2 while dealing with stay application of petitioner. 10. On other hand, Mr.Sharma, learned standing counsel, Revenue submits that respondent No.2 has fairly considered stay application of petitioner and against total outstanding demand he has directed petitioner to pay only 5% of demand that too in three installments. That apart, Uploaded on - 17/03/2020 Downloaded on - 18/03/2020 10:53:12 Priya Soparkar 5 904 wp 728-20-o petitioner has already moved first appellate authority in appeal. It is open to petitioner to pray for stay before appellate authority. In circumstances, question of interference by court does not arise. 11. Submissions made by learned counsel for parties have been considered. 12. At outset, it may be mentioned that petitioner has already paid Rs.1,11,50,905.00 as part of outstanding dues, of course without prejudice to its rights and contentions. 13. Without expressing any opinion on merit, we feel that it would be in interest of justice if first appellate authority hears appeal filed by petitioner and decides same in accordance with law within period of four months from date of receipt of authenticated copy of order. 14. Ordered accordingly. 15. Till decision is rendered on appeal of petitioner by first appellate authority within period specified, there shall be stay of demand notice issued pursuant to assessment order dated 28th December, 2019. 16. Petition is disposed of. (MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.) Uploaded on - 17/03/2020 Downloaded on - 18/03/2020 10:53:12 Play Games 24 x 7 Private Limited v. Assistant Commissioner of Income-tax-13(1)(2), Mumbai And Or