2019 (5) TMI 1656 - HC - Income Tax

Rectification u/s 254 - combined period of stay has exceeded 365 days - stay of demand stands vacated after expiry of a period of 365 days even if delay in disposal of appeal is not attributable to the assessee - HELD THAT - It was not disputed by the learned counsel for the appellant-revenue that the matter in issue is no longer res integra and stands concluded by the decision of this Court in M/S CARRIER AIR CONDITIONING AND REFRIGERATION LIMITED 2016 (5) TMI 396 - PUNJAB AND HARYANA HIGH COURT whereby identical question as claimed in the present appeal has been held not to be substantial question of law. - the present appeal is also dismissed

Summary

Issues:
1. Appeal under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal.
2. Interpretation of Second Proviso of Section 254(2A) and Third Proviso to Section 254(2A) of the Income Tax Act, 1961 regarding the period of stay exceeding 365 days.

Analysis:

Issue 1: Appeal under Section 260A of the Income Tax Act, 1961 against the ITAT order
The appeal was filed by the revenue under Section 260A of the Income Tax Act, 1961 challenging the order dated 22.6.2018 passed by the Income Tax Appellate Tribunal, Delhi Bench. The substantial questions of law raised in the appeal pertained to the actions of the ITAT regarding the period of stay exceeding 365 days. The Hon'ble ITAT was questioned for acting in contravention of the Second Proviso of Section 254(2A) of the Income Tax Act, 1961. Additionally, the validity of the ITAT order was challenged based on the Third Proviso to Section 254(2A) which states that the stay of demand stands vacated after 365 days, irrespective of the delay in appeal disposal not being attributable to the assessee.

Issue 2: Interpretation of Provisions of Section 254(2A) of the Income Tax Act, 1961
During the hearing, the learned counsel for the revenue did not contest that the matter in question had already been settled by a previous decision of the Court. The Court referred to a previous case, ITA-5-2016, decided on 25.4.2016, where a similar question was addressed and was not considered a substantial question of law. Consequently, the Court dismissed the present appeal based on the reasoning and conclusion reached in the aforementioned case. This decision reinforced the interpretation of the provisions of Section 254(2A) of the Income Tax Act, 1961, regarding the period of stay exceeding 365 days and the implications on the validity of the ITAT order.

In summary, the High Court dismissed the appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 against the ITAT order, as the matter had already been settled in a previous case where the similar question was not considered a substantial question of law. The Court's decision reaffirmed the interpretation of the relevant provisions of the Income Tax Act, 1961 concerning the period of stay exceeding 365 days and the consequences on the validity of the ITAT order.