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2016 (7) TMI 1249 - HC - Income TaxAppeal against the rejection of the application for interim relief - Held that - Considering the judgment of M. Janardhana Rao vs. Joint Commissioner of Income Tax 2005 (1) TMI 14 - SUPREME Court wherein held the appeal to the High Court lies only when a substantial question of law is involved. It is essential for the High Court to first formulate a question of law and thereafter proceed in the matter. Thus in relation to the entertaining of an Appeal under Section 260- A he following questions are framed Q. 1. Whether Under the facts and circumstances of the case the learned Income Tax Appellate Tribunal failed to consider its own Third Member Bench Judgment in the case of Rajya Krishi Utpadan Mandi Parishad vs. ITO 2(2) Lucknow (2014 (4) TMI 1054 - ITAT LUCKNOW ) wherein it had been held that appeals of the assessee for grant of stay of tax demand were not maintainable and therefore the Ld. ITAT ought to have dismissed the appeal of the assessee instead of admitting & allowing the appeal contrary to law? Q.2 Whether the learned Income Tax Appellate Tribunal is justified in setting aside the CIT (A) order ignoring that the statute does not provide any power to ITAT to hear appeal against the order of CIT (A) passed on stay application? Q.3 Whether the learned Income Tax Appellate Tribunal was justified in treating the order passed by CIT(A) as an order under section 250 of the Act and accordingly appealable while the order was of rejection of stay application?
Issues:
1. Appeal against rejection of application for interim relief 2. Interpretation of Section 260-A of the Income-tax Act, 1961 3. Consideration of Third Member Bench Judgment by the Income Tax Appellate Tribunal 4. Jurisdiction of the ITAT to hear appeals against CIT (A) orders on stay applications Analysis: Issue 1: The appellant argued that no appeal lies against the rejection of the application for interim relief, contending that the Tribunal erred in reversing the order and exercising jurisdiction not available to it. The High Court referred to the judgment in M. Janardhana Rao vs. Joint Commissioner of Income Tax, emphasizing that an appeal to the High Court is permissible only when a substantial question of law is involved. This principle is crucial in determining the scope of appeals under Section 260-A of the Income-tax Act, 1961. Issue 2: The High Court framed specific questions related to the interpretation of the ITAT's actions in the case. One question pertained to whether the ITAT failed to consider its own Third Member Bench Judgment, highlighting a previous decision that appeals for stay of tax demand were not maintainable. Another question addressed the justification of the ITAT in setting aside the CIT (A) order, noting the absence of statutory power for the ITAT to hear appeals against CIT (A) orders on stay applications. Issue 3: The consideration of the Third Member Bench Judgment by the ITAT was a significant aspect of the case. The appellant argued that the ITAT should have dismissed the appeal based on the precedent established in the mentioned judgment. This raised concerns about the consistency and adherence to previous decisions by the ITAT in similar cases regarding the grant of stay of tax demand. Issue 4: The jurisdictional aspect of the ITAT to hear appeals against CIT (A) orders on stay applications was also a focal point. The High Court questioned the justification of the ITAT in treating the CIT (A) order as an order under section 250 of the Act and thus appealable. The distinction between a rejection of a stay application and an order under section 250 of the Act was crucial in determining the scope of appealable decisions before the ITAT. In conclusion, the judgment highlighted the importance of adhering to legal principles, including the requirement of substantial questions of law for appeals, the relevance of past judgments in decision-making, and the delineation of jurisdictional boundaries for appellate bodies in tax matters. The case raised significant issues regarding the interpretation of relevant provisions and the consistency of decisions by the ITAT.
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