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TMI Blog2015 (2) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Respondent : Shri Dinesh Singh, Sr. D.R. ORDER PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:- This stay petition has been moved by the applicant on 12th January, 2015 seeking stay of penalty proceedings to be initiated by Ld. CIT(A). The relevant portion of the stay petition is reproduced below:- 1 Short facts regarding the demand of tax, interest, penalty, fine, estate duty or any other sum recovery of which is sought to be stayed. This application is for securing stay of penalty proceedings initiated by the Commissioner of Income-tax (A)-IV, Ahmedabad [Ld. CIT(A)] pursuant to her appellate order for A.Y. 2008-09. Facts regarding nature of enhancements of income made by the Ld. CIT(A) in respect of which penalty proceedings have been initiated are stated vide Annexure-A 2 The result of the appeal filed before the CIT(A) if any The subject penalty proceedings, sought to be stayed, has been initiated by the Ld. CIT(A) himself in pursuance of enhancements of income made by her office in the appellate order dated 14/10/2014. Hence the question of filing an appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved, the matter was carried before the first appellate authority. Ld. CIT(A) vide an order dated 14th October, 2014 has enhanced the income by a sum of ₹ 269,64,18,742/-. The bifurcation of the enhancement of income is stated to be as under:- -Remuneration of ₹ 40,12,76,441/- received form the Sun Pharma Industries (SPI) a partnership firm taxed in hand of the appellant which was earlier not offered to tax by the appellant in view of section 28(v) r.w.s. 40(b)(ii) of the Act has been treated as receipts for other services and taxed accordingly; -Upward Transfer Pricing Addition of ₹ 2,29,51,42,301/- Considering the above Transfer Pricing enhancement of ₹ 2,29,51,42,301/- coupled with the fact that an addition of ₹ 3,82,65,37,167/- which was already made by the Ld. AO in the assessment order under section 143(3) of the Act. Total Transfer Pricing adjustment as computed by the Ld. CIT(A) stands at ₹ 612,03,79,468/-. 3. That order of Ld. CIT(A) is now challenged by filing an appeal before ITAT Ahmedabad on 10th of December, 2014 of the appeal No. is ITA No. 3297/Ahd/2014. This appeal is pending before the Tribunal for dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as it will have to face multiplicity of the proceedings. In case assessee succeeds in quantum appeal, the penalty order passed by Id. CIT(A) will have no legs to stand while in a situation the assessee fails Id. CIT(A) will get ample time of six months to dispose of the penalty proceedings. Therefore, exercising our appellate powers conferred u/s 254(1) of the Act, as interpreted by hon'ble Apex Court in the case of ITO vs. Mohammad Kunhi 71 ITR 815 and to prevent multiplicity of proceedings and harassment to the assessee, we are inclined to direct Id. CIT(A) to keep the penalty proceedings in abeyance till the disposal of quantum appeal by the Tribunal. 5. Ld. AR has also informed that the said order of Tribunal has been contested by the Revenue Department before Hon ble Gujarat High Court and in appeal titled as ACIT vs. GE India Industrial Pvt Ltd 358 ITR 40 affirmed the view take by Tribunal vide para no. 5.3,5.4 and 6; reproduced below:- 5.3 The issue raised in the present special civil application with respect to staying of penalty proceedings by the Income-tax Appellate Tribunal during the pendency of the appeal is also required to be consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings) as will prevent the appeal if successful from being rendered nugatory and the Appellate Tribunal has the power to grant stay as incidental or ancillary to its appellate jurisdiction. How ever, while exercising such power of stay, the Tribunal has to satisfied that there is a strong prima facie case made out and the Tribunal is satisfied that the entire purpose of appeal would be frustrated or rendered nugatory by allowing the recovery proceedings/penalty proceedings to continue, during pendency of the appeal. It is also observed that in a case where the Appellate Tribunal grants the stay either of recovery and/or stay of penalty proceedings, the Appellate Tribunal shall see to it that the appeal before it is decided and disposed of finally at the earliest and preferably within a period of three months so that the appellant-assessee may not take undue advantage by delaying the appeal proceedings. 6. The argument of Ld. AR is that if a judicial authority has jurisdiction to grant relief by pronouncing a final order then in that proceedings such judicial authority also has inherent power to pass an interim order to grant interim relief. Therefore Ld. AR has co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edies have not been exhausted, therefore, deserves to be dismissed. 8. In rejoinder Ld. AR, Shri S.N. Soparkar, has drawn our attention on the fact that the appellant company sought time to represent the request of stay of penalty proceedings, vide letter dated 5th November, 2014 but that was not considered and a notice was issued dated 23rd January, 2015 directing the assessee to be present on 9th February, 2015 to show cause as to why penalty u/s. 271(1)(c) should not be imposed. Ld. AR has, therefore, pleaded that an emergency situation has arisen to stop Ld. CIT(A) from imposing concealment penalty. Ld. AR has also pleaded that both the additions were made on frivolous grounds hence there is every hope of success. 9. We have heard both the sides at some length. We have examined the relevant sections as referred before us. Although prima facie it appears that the issue as raised before us is squarely covered by the decision of G.E. India Industrial (supra) but for the sake of completeness and to answer the questions raised in the pleadings from both the sides, we deem it proper to deal but in a cryptic manner. As far as the powers assigned to us is concerned, Section 254(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty proceedings in abeyance till the disposal of the quantum appeal for a period of three months. A direction has been given to ITAT to decide the appeal within that period of three months. 10. After hearing both the parties and in view of the reasons stated hereinabove we are of the opinion that on facts the stay petition as filed before us is identical to the case already decided by Hon ble jurisdictional High Court in the case GE India Industrial Pvt. Ltd. (supra) therefore, we hereby grant stay on those very terms and conditions as laid down by the Hon ble High Court. For reference para 6.1 is reproduced below:- 6.1 In view of the above and for the reasons stated above, the present special civil application fails and the same deserves to be dismissed and is, accordingly, dismissed. In the facts and circumstances of the case, the income-tax Appellate Tribunal is hereby directed to finally decide and dispose of the main appeal at the earliest but not later than three months from the date of receipt of the writ of the present order or on production of certified copy of the present order. All concerned are directed to cooperate with the learned Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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