2015 (2) TMI 903 - HC - Income Tax

Stay of assessment order in pending appeal denied by CIT(A) - Held that - The Assessing Officer and the Commissioner do not stay the order in appeal but only stay the demand issued consequent to the order which is in appeal. This only to ensure that the assessee is not deemed to be a assessee in default. Therefore, the Commissioner of Income-tax (Appeals) ought not to have confused his jurisdiction as an appellate authority with that of either the Assessing Officer under section 220(6) of the Act or to that of the Commissioner of Income-tax in his administrative capacity. Thus set aside the impugned order dated June 30, 2014 of CIT(A). The Commissioner of Income-tax (Appeals) is directed to dispose of the stay application as expeditiously as possible and preferably within three weeks from today. - Revenue will not adopt any coercive proceedings against the petitioner till the disposal of its stay application by the Commissioner of Income-tax (Appeals) and for the period of two weeks from the date of the communication of the order passed by the Commissioner of Income-tax (Appeals) - Decided in favour of assessee

Summary

Issues:
Challenge to order of Commissioner of Income-tax (Appeals) regarding stay of assessment order for the assessment year 2011-12.

Analysis:
The petition under article 226 of the Constitution of India challenges the order dated June 30, 2014, passed by the Commissioner of Income-tax (Appeals) dismissing the petitioner's application for stay of assessment order. The Commissioner of Income-tax (Appeals) justified the dismissal by stating that considering stay applications as an administrative measure would lead to multiple applications before different authorities. However, the High Court clarified that the Commissioner of Income-tax (Appeals) has inherent jurisdiction to deal with stay applications as an appellate authority. The jurisdiction to stay the order in appeal is distinct from the power of the Assessing Officer to stay the demand under section 220(6) of the Income-tax Act, 1961, or that of the Commissioner of Income-tax in an administrative capacity.

The High Court set aside the impugned order dated June 30, 2014, directing the Commissioner of Income-tax (Appeals) to expeditiously dispose of the stay application, preferably within three weeks. During this period, the respondent-Revenue was restrained from taking coercive actions against the petitioner. However, the High Court allowed the Commissioner of Income-tax (Appeals) the discretion to dispose of the petitioner's appeal on its merits if deemed appropriate based on the nature of the dispute.

Therefore, the writ petition challenging the order of the Commissioner of Income-tax (Appeals) regarding the stay application was disposed of with the outlined directions, with no order as to costs.