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2019 (3) TMI 1319 - AT - Income TaxStay of demand beyond 365 days by Tribunal u/s 254(2A) - HELD THAT - We noted that judgement of Hon ble Supreme Court in case ASIAN RESURFACING OF ROAD AGENCY PVT. LTD. AND ANR. VERSUS CENTRAL BURUEAU OF INVESTIVATION 2018 (4) TMI 3 - SUPREME COURT OF INDIA will not help the Revenue for the reason that even the Legislature in this provision of Section 254(2A) introduced third proviso vide Finance Act, 2008 and allowed the period for granting of stay not exceeding 365 days in normal circumstances. Hence the Legislature was conscious of the fact that there are circumstances where stay has to be granted beyond six months as the facts requires in the exceptional cases. We have gone through the said order and noticed that no such plea was placed before the Tribunal at the time of hearing or from record we could not trace such arguments or plea. Taking into consideration all the facts and circumstances, we are of the view that the TATA TELESERVICES (MAHARASHTRA) LTD. 2015 (12) TMI 1507 - BOMBAY HIGH COURT has struck down the expression, even if the delay in disposing of the appeal is not attributable to the assessee as substituted by 3rd proviso to Section 254(2A) of the Act and taken a view that the Tribunal has power to extend stay even beyond 365 days and even after the substitution of 3rd proviso to Section 254(2A) of the Act. Hence, respectfully following the above referred decisions, discussing legal positions, we dismiss this miscellaneous application of the Revenue.
Issues Involved:
1. Recall of the stay order passed by the Tribunal. 2. Tribunal's power to grant stay beyond 365 days under Section 254(2A) of the Income Tax Act, 1961. 3. Applicability of the Supreme Court's decision in the case of Asian Resurfacing of Road Agency P. Ltd. and Others vs. Central Bureau of Investigation to the present case. 4. Interpretation of the third proviso to Section 254(2A) of the Income Tax Act, 1961. Issue-Wise Detailed Analysis: 1. Recall of the stay order passed by the Tribunal: The Revenue filed a Miscellaneous Application under Section 254(2A) of the Income Tax Act, 1961, requesting the recall of the stay order passed by the Tribunal in Stay Application No. 453/Mum/2018 dated 04.12.2018. The learned Sr. D.R. argued that the total demand involved for A.Y. 2011-12 was `125.42 crores and the stay had been extended six times beyond 2½ years. He contended that the Tribunal has no power to grant a stay beyond 365 days as per the third proviso to Section 254(2A) of the Act. 2. Tribunal's power to grant stay beyond 365 days under Section 254(2A) of the Income Tax Act, 1961: The learned counsel for the assessee referred to the third proviso to Section 254(2A) of the Act, which limits the stay period to 365 days. He cited the Delhi High Court's decision in the case of Pepsi Foods (P) Ltd., which struck down the expression "even if the delay in disposing of the appeal is not attributable to the assessee" as violative of Article 14 of the Constitution of India. The Bombay High Court in Tata Teleservices (Maharashtra) Ltd. also upheld this view, allowing the Tribunal to extend the stay beyond 365 days if the delay is not attributable to the assessee. 3. Applicability of the Supreme Court's decision in the case of Asian Resurfacing of Road Agency P. Ltd. and Others vs. Central Bureau of Investigation to the present case: The learned Sr. D.R. relied on the Supreme Court's decision in the case of Asian Resurfacing of Road Agency P. Ltd., which mandated that stay orders would automatically lapse after six months unless extended by a specific speaking order. However, the learned counsel for the assessee argued that this decision pertained to civil and criminal litigation and not to revenue matters. The Bombay High Court in Oracle Financial Services Pvt. Ltd. vs. DCIT clarified that the Supreme Court's decision does not apply to quasi-judicial proceedings in revenue matters. 4. Interpretation of the third proviso to Section 254(2A) of the Income Tax Act, 1961: The Tribunal noted that the Delhi High Court in Pepsi Foods (P) Ltd. struck down the expression "even if the delay in disposing of the appeal is not attributable to the assessee" as it violated the non-discrimination clause of Article 14 of the Constitution. The Bombay High Court in Tata Teleservices (Maharashtra) Ltd. upheld this view, allowing the Tribunal to extend the stay beyond 365 days if the delay is not attributable to the assessee. The Tribunal also referred to the case of Narang Overseas (P) Ltd., which held that the Tribunal has judicial powers similar to an appellate court under the Civil Procedure Code, 1908. Conclusion: The Tribunal dismissed the Revenue's Miscellaneous Application, stating that the Tribunal has the power to extend the stay beyond 365 days if the delay in disposing of the appeal is not attributable to the assessee. The Tribunal followed the decisions of the Delhi High Court in Pepsi Foods (P) Ltd. and the Bombay High Court in Tata Teleservices (Maharashtra) Ltd., which struck down the restrictive expression in the third proviso to Section 254(2A) of the Act. The Tribunal also clarified that the Supreme Court's decision in Asian Resurfacing of Road Agency P. Ltd. does not apply to revenue matters. The order was pronounced in the open court on 15th March, 2019.
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