2003 (1) TMI 270 - AT - Income Tax

Issues Involved:
1. Computation of income by the Assessing Officer.
2. Dismissal of the assessee's appeal by the Commissioner of Income-tax (Appeals).
3. Assessee's stay petition for the collection of gift-tax.
4. Department's request for adjournment of the appeal hearing.
5. Tribunal's decision on the stay petition and adjournment request.

Issue-wise Detailed Analysis:

1. Computation of Income by the Assessing Officer:
The Assessing Officer brought to tax the difference between the amount at which the shares were sold and the amount at which the shares were allotted. The assessee was aggrieved by the manner in which the income was computed and preferred an appeal.

2. Dismissal of the Assessee's Appeal by the Commissioner of Income-tax (Appeals):
The Commissioner of Income-tax (Appeals) dismissed the assessee's appeal against the computation of income by the Assessing Officer. Consequently, the assessee filed a second appeal with the Tribunal on 5-3-2002.

3. Assessee's Stay Petition for the Collection of Gift-tax:
The assessee filed a stay petition with the Tribunal on 7-11-2002, seeking a stay on the collection of gift-tax amounting to Rs. 2,94,61,806, which included interest of Rs. 21,82,356. The Tribunal heard the stay petition on 13-12-2002 and rejected it on 20-12-2002 but granted an early hearing of the appeal on 6-1-2003.

4. Department's Request for Adjournment of the Appeal Hearing:
The Junior Departmental Representative for the Revenue requested an adjournment of the appeal hearing, citing the absence of the Senior Departmental Representative. The assessee's counsel opposed the adjournment, arguing that the Department had undertaken not to seek adjournment and that coercive steps were being taken by the Tax Recovery Officer (TRO).

5. Tribunal's Decision on the Stay Petition and Adjournment Request:
The Tribunal noted that the Department had previously undertaken not to seek adjournment and had rejected the assessee's stay petition based on this undertaking. The Tribunal found it unfair for the Department to now seek adjournment, especially given the significant tax demand and the TRO's actions. The Tribunal emphasized the importance of respecting undertakings given by representatives and the need for the Department to be prepared for hearings.

Considering the circumstances, the Tribunal issued the following directions:
- Ad interim stay of the recovery proceedings by the Department against the assessee was granted, and the stay petition was restored.
- A cost of Rs. 100 was awarded to the assessee for the Department's failure to fulfill its undertaking.
- The stay petition was scheduled for final hearing on 7th February 2003, with no separate notice required.
- The hearing was contingent upon the assessee filing an application with the Tribunal's Registry after receiving the awarded cost.

In conclusion, the appeal of the assessee was sine die adjourned, and the Tribunal emphasized the need for both parties to respect the Tribunal's orders and undertakings.

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