2014 (5) TMI 669 - HC - Income Tax

Appeal pending before Tribunal - Power of the AO to pass assessment order Stay already granted Held that - Stay order granted by the ITAT was placed before the AO and was within the knowledge of ACIT as well - Neither ACIT nor AO was competent to proceed with the assessment proceeding in view of the stay granted by the ITAT vide order dated 26.12.2013 - ACIT, in violation of stay granted by the ITAT, granted permission to the AO to proceed with assessment and the AO has passed the order dated 14.03.2014 revenue is granted two weeks time to file personal affidavits specifically stating as to how permission was granted to proceed with the assessment despite stay order granted by the Tribunal dated 26.12.2013 Decided in favour of Assessee.

Summary

Issues: Violation of stay order by Assessing Officer during pendency of appeal before ITAT against order passed by CIT under Section 263 of Income Tax Act.

In this case, the Income Tax Appellate Tribunal, Delhi Bench "E", New Delhi issued a stay order on 26.12.2013 directing the Assessing Officer not to proceed with the reframing of assessment during the pendency of appeals before the ITAT challenging the orders passed under Section 263 of the Income Tax Act. The petitioner contended that despite the clear stay order, the Assessing Officer proceeded with the assessment, which was in violation of the Tribunal's order. The Additional Commissioner, Income Tax granted permission for the assessment to proceed, and the Assessing Officer passed the impugned order on 14.03.2014. The petitioner argued that both the Additional Commissioner and the Assessing Officer deliberately violated the stay order, and therefore, sought appropriate action against them through writ petitions under the supervisory jurisdiction of the Court.

The Court, with the consent of both parties, heard the petitions together. The respondent's counsel accepted notice and was granted two weeks to file personal affidavits explaining how permission was granted to proceed with the assessment despite the stay order dated 26.12.2013. The Assessing Officer was directed to explain in his affidavit how he passed the assessment order in violation of the Tribunal's order. Both respondents were required to show cause as to why appropriate action should not be taken against them for deliberately violating the Tribunal's order. The Court directed that the effect and operation of the impugned orders shall remain stayed. Consequently, the CLMA Nos. 4018, 4019, 4021, and 4025 of 2014 were disposed of.