2014 (12) TMI 1209 - HC - Income Tax

Grant stay - Held that - The assessee has succeeded before the Income Tax Appellate Tribunal. Mere admission of substantial question of law does not mean that we should stay the impugned order or the consequential effect. If the Revenue succeeds in the appeal consequences will flow and necessary orders will be passed. There are several issues which arise for consideration including the question whether the photocopies of the balance sheets etc. recovered can be treated as sufficient documents for initiation of proceedings under Section 153C of the Income Tax Act 1961. The other question which arises for consideration is whether any satisfaction is required to be recorded before proceedings are initiated under Section 153C of the Income Tax Act 1961. Question of limitation is also raised. Application dismissed.

Summary

Issues involved:
1. Granting exemption in an application.
2. Granting stay in an appeal.
3. Consideration of photocopies of balance sheets as sufficient documents for initiating proceedings under Section 153C of the Income Tax Act, 1961.
4. Requirement of recording satisfaction before initiating proceedings under Section 153C of the Income Tax Act, 1961.
5. Question of limitation in the proceedings.

Exemption Application:
The High Court allowed exemption in an application, subject to all just exceptions. This decision was made in response to C.M.No.19988/2014.

Granting Stay in Appeal:
The Court declined to grant a stay in the appeal, noting that the assessee had succeeded before the Income Tax Appellate Tribunal. The Court emphasized that the mere admission of a substantial question of law did not warrant a stay of the impugned order or its consequential effects. It was highlighted that if the Revenue succeeded in the appeal, necessary orders would be passed. Various issues were identified for consideration, including the treatment of photocopies of balance sheets as sufficient documents for initiating proceedings under Section 153C of the Income Tax Act, 1961. Additionally, the requirement of recording satisfaction before initiating proceedings under the same section was discussed. The question of limitation in the proceedings was also raised.

In conclusion, the Court dismissed the application accordingly.

This detailed analysis provides insights into the High Court's judgment regarding exemption, granting stay in an appeal, and various considerations related to the Income Tax Act, 1961, emphasizing the importance of satisfying legal requirements and addressing pertinent issues.