2019 (4) TMI 1032 - HC - Income Tax

Stay application - interlocutory orders passed by the Tribunal on a stay application rejecting the stay application filed by the Assessee - HELD THAT - We are of the opinion that such an Appeal from 'every' order passed by the Tribunal in a pending Appeal can be filed before the High Court under Section 260-A of the Act but only if the case involves a substantial question of law. The existence of a substantial question of law in the Appeal filed by any of the parties, namely, Assessee or Revenue is necessary to invoke the jurisdiction under Section 260-A of the Act. The interlocutory orders passed by the Tribunal on a stay application rejecting the stay application filed by the Assessee in the present case, prima facie case does not give rise to any substantial question of law as it is firstly a discretionary order and the grant of a stay or refusal thereof or grant of stay partially, depends upon the facts of each case before the Tribunal. It is necessary for any Tribunal or Appellate Authority, while dealing with a stay application to discuss these three factors while granting or refusing the stay to the whole extent or to a partial extent. We do not find any such discussion in the order passed by the learned Tribunal. We dispose of the present Appeal with a request to Income Tax Appellate Tribunal to dispose of the pending Appeal of the Assessee as expeditiously as possible, preferably within a period of three months from today.- interim relief granted.

Issues:
1. Appeal against interim order passed by Income Tax Appellate Tribunal.
2. Maintainability of Appeal under Section 260-A of the Act.
3. Existence of substantial question of law.
4. Parameters for grant of stay.
5. Lack of discussion on factors in the Tribunal's order.
6. Merits of the case regarding Transfer Pricing Officer's adjustments.
7. Financial hardship of the Assessee.
8. Disposal of the present Appeal with directions to the Tribunal.

Analysis:
The judgment pertains to an Appeal filed by the Assessee against an interim order passed by the Income Tax Appellate Tribunal, rejecting a stay application in a pending appeal for the Assessment Year 2014-2015. The outstanding demand against the Assessee Company is &8377;11,29,18,300. The Assessee contended that an Appeal under Section 260-A of the Act lies before the High Court against 'every order' passed by the Tribunal if it involves a substantial question of law, citing relevant legal precedents. However, the Revenue supported the Tribunal's order.

The High Court deliberated on the maintainability of the Appeal under Section 260-A, emphasizing that the existence of a substantial question of law is crucial for invoking jurisdiction. It noted that interlocutory orders, such as stay applications, must demonstrate a prima facie case, irreparable injury, and balance of convenience. The Court found that the Tribunal's order lacked a discussion on these factors, essential for granting or refusing a stay.

Regarding the merits of the case, the Assessee argued that the Transfer Pricing Officer made erroneous adjustments, and the Assessee's construction business in Chennai was temporarily discontinued. However, the Tribunal observed that the Assessee failed to establish financial hardship for paying the outstanding demand. The Court refrained from delving into the case's details or merits pending before the Tribunal.

Consequently, the High Court disposed of the Appeal with directions to the Tribunal to expedite the pending Appeal within three months. It ordered the Assessee to deposit &8377;2 crores with the Income Tax Department within four weeks to prevent coercive action by the Revenue for recovery. The Court emphasized no reduction or extension of the deposit amount or time frame. The Appeal was closed with no costs, and related petitions were also concluded.

← Previous Next →