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2016 (4) TMI 391 - AT - Income TaxStay petition - Held that - Onus placed upon the assessee of being ready to argue has been discharged as the adjournments moved, we find were so necessitated for reasons beyond the control of the assessee as in the circumstances brought out by the Ld.AR judicial propriety demanded that the firm engaged by the assessee does not argue before the Constitution of the Bench on the specific dates. Thus where for reasons beyond its control, the Ld.AR was required to move the adjournment it cannot be said to be a case of willful default to appear or unnecessary dragging on or delaying the hearing after having sought stay. Being satisfied with the explanation offered and being of the considered view that the assessee cannot be burdened for no fault of his, the stay is extended for a further period of 6 months or disposal of appeal whichever is earlier. We make it clear that no adjournment for any unreasonable ground shall be sought by the assessee on the date of hearing which we find is fixed on 22.03.2016. In the result the stay petition of the assessee is allowed.
Issues Involved:
1. Extension of stay petition. 2. Attribution of delay in disposal of appeal. 3. Judicial propriety and conflict of interest in representation. 4. Legal provisions and precedents regarding stay beyond 365 days. Issue-wise Detailed Analysis: 1. Extension of Stay Petition: The assessee filed a stay petition in ITA No. 750/Del/2015 for the assessment year 2010-11, seeking an extension of the stay initially granted by the ITAT for six months on 20.02.2015 and further extended for another six months on 24.09.2015. The extension was sought based on the decision in Pepsi Foods Pvt Ltd. vs. ACIT [2015] 376 ITR 87 (Del), arguing that the delay in the appeal's disposal was not attributable to the assessee. 2. Attribution of Delay in Disposal of Appeal: The court examined the sequence of events and found discrepancies in the submissions by the Ld. AR. Specifically, adjournments were sought by the Ld. AR on 14/12/2015 and 17/02/2016, contrary to the claim that the delay was not attributable to the assessee. The Ld. AR clarified that the adjournments were due to a conflict of interest, as the presiding Member's son was professionally associated with the Ld. AR's firm. However, this claim was found to be incorrect as the presiding Member did not have a son. 3. Judicial Propriety and Conflict of Interest in Representation: The Ld. AR submitted that the adjournments were due to the peculiar situation where the presiding Member's son was associated with the Ld. AR's firm. However, the court found this submission incorrect and noted other contradictions in facts and dates. The Ld. AR then filed an amended stay petition, capturing the sequence of events correctly and justifying the adjournments due to the conflict of interest. The court accepted that the adjournments were necessary and not an attempt to avoid a hearing. 4. Legal Provisions and Precedents Regarding Stay Beyond 365 Days: The court referred to Section 254 of the Income Tax Act, 1961, which allows the Appellate Tribunal to grant a stay for six months, extendable for another six months if the delay is not attributable to the assessee. The third proviso, which limits the stay to 365 days, was struck down by the Jurisdictional High Court in Pepsi Foods Pvt Ltd., as it created "hostile discrimination" against law-abiding assessees. The court held that the Tribunal could extend the stay beyond 365 days in deserving cases. The court also referred to a similar position in PML Industries Ltd. vs CCE [2013] 22 GSTR 83 (PandH), where the provision was read down to prevent the right of appeal from becoming illusory due to the Tribunal's inability to decide within 180 days. Conclusion: Considering the judicial precedent and the peculiar facts and circumstances of the case, the court found that the adjournments were justified and not an attempt to delay the hearing. The stay was extended for a further six months or until the disposal of the appeal, whichever is earlier. The court emphasized that no adjournment for unreasonable grounds would be entertained on the next hearing date, fixed for 22.03.2016. The stay petition was allowed, and the order was pronounced in the open court on 18th March 2016.
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