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2019 (3) TMI 1350 - AT - Income TaxStay of demand - Tribunal granting stay recovery of demand beyond the period of 365 days - HELD THAT - Hon ble Jurisdictional High Court in Tata Teleservices (Maharashtra) Ltd. (2015 (12) TMI 1507 - BOMBAY HIGH COURT), held that the Tribunal has power to grant stay beyond a period of 365 days. Though, it may be a fact that the delay in disposal of corresponding appeal may not be attributable to the Department, at the same time, non disposal of the appeal cannot be attributed to the assessee also. Further, Department s contention that the financial position of the assessee is good is not backed by any supporting evidence. Be that as it may, while extending the stay vide order dated 26th October 2018, the Tribunal has taken note of the attending facts and circumstances which is evident from the facts narrated in Para 2 of the order. That being the case, the decision so taken by the Tribunal cannot be subject matter of review by the Tribunal. If the Department, in any manner, was aggrieved with the aforesaid order of the Tribunal, they could have approached the higher court seeking appropriate relief/remedy instead of filing a Misc. Application seeking review of the order passed by the Tribunal.
Issues Involved:
1. Legality of extending stay beyond 365 days. 2. Applicability of the Supreme Court decision in Asian Resurfacing of Road Agency Pvt. Ltd. to Income Tax proceedings. 3. Review of Tribunal's own order by the Tribunal. 4. Department’s contention on non-speaking initial stay order. 5. Financial capability of the assessee to pay the outstanding demand. Issue-Wise Detailed Analysis: 1. Legality of Extending Stay Beyond 365 Days: The Tribunal examined whether it could extend the stay of recovery of outstanding demand beyond 365 days. The learned Departmental Representative argued that such an extension violates section 254(2A) of the Income Tax Act, 1961. However, the Tribunal referenced the decisions of the Hon'ble Delhi High Court in Pepsi Foods Pvt. Ltd. v/s ACIT and the Hon'ble Jurisdictional High Court in CIT v/s Tata Teleservices (Maharashtra) Ltd., which affirm that the Tribunal has the power to grant stay beyond 365 days if the delay in disposal of the appeal is not attributable to the assessee. The Tribunal concluded that it has the authority to extend the stay beyond 365 days under these conditions. 2. Applicability of the Supreme Court Decision in Asian Resurfacing of Road Agency Pvt. Ltd. to Income Tax Proceedings: The Departmental Representative cited the Supreme Court decision in Asian Resurfacing of Road Agency Pvt. Ltd. to argue that stays should not exceed six months. However, the Tribunal noted that this decision pertains to civil and criminal trials, not Income Tax proceedings. The Hon'ble Jurisdictional High Court in Oracle Financial Services Software Ltd. v/s DCIT clarified that the Supreme Court's observations in Asian Resurfacing do not apply to stay of recovery of outstanding demand under the Income Tax Act. The Tribunal thus found that the principle laid down in Asian Resurfacing is not applicable to the present case. 3. Review of Tribunal's Own Order by the Tribunal: The learned Authorised Representative contended that the Department's application effectively sought a review of the Tribunal's own order, which is not permissible under the statute. The Tribunal agreed, stating that if the Department was aggrieved by the Tribunal's order, it should have approached a higher court for relief. The Tribunal emphasized that it cannot review its own orders and dismissed the Department's application on these grounds. 4. Department’s Contention on Non-Speaking Initial Stay Order: The Department argued that the initial stay order dated 10th November 2017 was a non-speaking order. The Tribunal dismissed this contention, noting that the Department's application did not seek vacation/modification of the stay order on this ground. Furthermore, the Tribunal highlighted that the initial stay order's validity ended after six months, and subsequent extensions were granted after examining the prima facie case and balance of convenience. 5. Financial Capability of the Assessee to Pay the Outstanding Demand: The Department claimed that the assessee was financially capable of paying the outstanding demand. However, the Tribunal observed that this contention was not supported by any evidence. The Tribunal also noted that the stay was granted conditionally, subject to the assessee paying `3 crore, which had been complied with. The Tribunal found no change in circumstances that would warrant vacating the stay. Conclusion: The Tribunal dismissed the Department's Miscellaneous Application, upholding the legality of extending the stay beyond 365 days, clarifying the inapplicability of the Supreme Court's decision in Asian Resurfacing to Income Tax proceedings, and rejecting the Department's contentions regarding the review of its own order and the financial capability of the assessee. The Tribunal emphasized the need to avoid frivolous applications that waste judicial resources.
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