2017 (10) TMI 1007 - HC - Income Tax

Extension of the stay of outstanding demand - Held that - Whether an order of stay should be vacated is definitely available with the ITAT but such discretion should be exercised judicially. Given the above background when as recently as on 4th August 2017, the ITAT thought it fit to extend the stay for a further period of six months from today or till the disposal of the appeal, whichever is earlier , the appeal not having been being disposed of, the ITAT was under no compulsion to immediately vacate the stay only because a request for an adjournment by one day was made by the AR of the Petitioner. The appeal, which is now listed for hearing before the ITAT on 20th November 2017, could have been either advanced to an earlier date or it made clear that there would be no further adjournment on that date. The Petitioner assures the Court that the Petitioner-Assessee will proceed with its appeal on 20th November 2017 without seeking any adjournment. In view of the above assurance, no further directions are called for in this regard. In the circumstances, the Court sets aside the order dated 10th October 2017 passed by the ITAT and directs that the appeal of the Petitioner be listed on 20th November 2017, the date already fixed by the ITAT. The interim order dated 4th August 2017 of the ITAT is restored.

Summary

Issues involved: Challenge to the order vacating stay granted by the Income Tax Appellate Tribunal (ITAT) during the pendency of the Petitioner's appeal for the Assessment Year 2012-13.

Analysis:
1. The Petitioner challenged the order dated 10th October 2017 passed by the ITAT, which vacated the stay granted earlier on 4th August 2017. The ITAT had granted the stay extension for six months or until the appeal disposal, whichever is earlier.

2. The ITAT vacated the stay as the Petitioner's authorized representative was unavailable for the hearing on 10th October 2017, and the Departmental Representative insisted on proceeding with the hearing or vacating the stay. The ITAT believed it had no option but to vacate the stay.

3. The High Court emphasized that the ITAT's discretion to vacate the stay should be exercised judiciously. The Court noted that the ITAT had recently extended the stay until the appeal disposal, indicating no urgency to vacate the stay due to a one-day adjournment request. The Court suggested advancing the hearing date or ensuring no further adjournments.

4. The Petitioner's Senior Counsel assured the Court that the Petitioner would proceed with the appeal on 20th November 2017 without seeking adjournment. Consequently, the Court set aside the ITAT's order and directed the appeal to be listed on 20th November 2017, restoring the interim stay granted on 4th August 2017.

5. The High Court allowed the writ petition, disposing of the application in favor of the Petitioner by reinstating the stay and setting the appeal date for 20th November 2017.

This detailed analysis covers the issues involved in the legal judgment comprehensively, outlining the sequence of events and the Court's reasoning behind setting aside the ITAT's order and restoring the stay.