2016 (7) TMI 1310 - AT - Income Tax

Condonation of delay - reasons for delay - Held that - We find that it is an undisputed fact that the delay in disposal of the appeals has occurred due to the difference of opinion between the Judicial Member and the Accountant Member. The Hon ble President of the ITAT had referred the matter for decision by a Third Member and the appeals were listed for hearing on 10.05.2016 on which date the matter got adjourned sine die as is apparent from the note sheet placed in the file in ITA No.554(Asr)/2014. Therefore the delay in the disposal of the cases cannot be attributed to the assessee. Thus this is a deserving case for extension of stay beyond a period of 365 days as the reason for delay in disposal of the appeals is not attributable to the assessee but due to non functioning of the Bench.

Summary

Issues:
1. Extension of stay granted by the Tribunal beyond 365 days.
2. Divergent views of Judicial Member and Accountant Member.
3. Interpretation of statutory provisions Sec. 254(2A).
4. Applicability of judicial decisions on extending stay.

Extension of Stay Beyond 365 Days:
The Appellate Tribunal received Stay Applications from the assessee seeking an extension of the stay previously granted. The delay in disposing of the appeals was due to divergent views between the Judicial Member and the Accountant Member. The Tribunal had initially granted a stay for 180 days, which was extended to 365 days. The issue arose regarding whether the Tribunal could further extend the stay beyond the statutory period of 365 days. The assessee argued that the delay was not attributable to them, while the respondent contended that the Tribunal lacked the authority to extend the stay beyond 365 days.

Divergent Views of Members:
The Judicial Member and the Accountant Member had differing opinions on the appeals, leading to the matter being referred to a Third Member for decision. Despite the delay in disposing of the appeals not being the fault of the assessee, the issue of extending the stay beyond 365 days was contested based on statutory provisions and judicial interpretations.

Interpretation of Statutory Provisions:
The respondent cited Sec. 254(2A) to argue that the Tribunal could not extend the stay beyond 365 days. They relied on a decision of the Karnataka High Court to support their position. In contrast, the assessee referred to a judgment of the Punjab & Haryana High Court, which allowed for the extension of stay beyond 365 days in deserving cases where the delay in disposal of the appeal was not the fault of the assessee.

Applicability of Judicial Decisions:
The Tribunal considered the conflicting decisions of the Karnataka High Court and the Punjab & Haryana High Court. It noted that the delay in the present case was not due to the assessee but to the non-functioning of the Bench. Following the decision of the jurisdictional High Court, the Tribunal extended the stay for a further 90 days or until the disposal of the appeals by the Third Member, whichever came earlier. The terms and conditions of the original stay order were to remain unchanged.

In conclusion, the Stay Applications filed by the assessee were allowed, granting an extension of the stay beyond 365 days in line with the decision of the Punjab & Haryana High Court and considering the circumstances of the case.