Goa bench of Bombay HC sets
aside AO’s order rejecting Vedanta’s prior permission request
u/s Sec. 281(1) (applicable before effecting an asset transfer or creating a
charge thereon); HC refers to Sec. 281 and opines that the section demands
precision, holds that the AO cannot generally say that “no proposed
transaction or charge over any asset, though unencumbered, can be permitted
because there is a possibility of another demand, or on account of the vagaries
of litigation, etc.”, clarifies that the section only requires AO to ensure
that the known claims of the Revenue are sufficiently secured; HC further
observes that "There is no room in considering an application under
Section 281 for a response that is speculative, predicated on
imponderables and unknowns such as litigation outcomes, or on suppositions
that all stay orders obtained by an assessee are bound to be vacated and
an assessee’s appeals lost"; HC notes that assessee has
available assets in excess of Rs. 80,000 crores of which roughly assets of Rs.
49,000 crores assets have some form of encumbrance on them, while the remaining
are not so encumbered; However, without rendering a decision on the merits of
assessee’s application, HC directs AO to consider assessee’s application
afresh, uninfluenced by the previous order, further lays down timelines
and directs both the parties to consider provisions of Sec. 281 and
Circular No.4/2011 setting out the guidelines for the grant of prior permission
u/s. 281 :HC
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