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TMI Blog2015 (11) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... gned before the Tribunal but cannot be extended to matters in which the Tribunal has no jurisdiction even, though, these matters may be incidentally affected by the outcome of the appeal. We cannot read into Section 254 of the Act, any power in the Income Tax Appellate Tribunal to interfere in a prosecution under the Act, either at the stage of a show cause notice or at any other stage. The pendency of appeals regarding quantum and penalty and an appeal challenging an order passed under Section 263 would not, in our considered opinion, confer power upon the Tribunal to stay consideration of a show cause notice calling upon the assessee to show cause why prosecution be not launched. - Civil Writ Petition No. 15239 of 2015 - - - Dated:- 31-10-2015 - Rajive Bhalla And Rekha Mittal, JJ. For the Petitioner : Mr. Yogesh Putney, Advocate For the Respondent : Mr. Ajay Vohra, Senior Advocate with Mr. Rohit Jain, Advocate ORDER Rajive Bhalla, J. The revenue is before us, praying for issuance of a writ in the nature of certiorari, quashing, orders dated 23.01.2015 (Annexure P-12) and 25.03.2015 (Annexure P-16), passed by the Income Tax Appellate Tribunal, Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are even otherwise without jurisdiction as prosecution has not been launched. The order passed by the Tribunal has brought consideration whether or not to launch prosecution to an halt and, therefore, must be set aside on merits. Counsel for the appellant further submits that the Tribunal having directed the assessee to file its reply, the order directing that prosecution may be kept in abeyance renders the orders meaningless. Counsel for the revenue relies upon the following judgments to support his arguments that the Tribunal is not empowered to stay prosecution:- Gulab Chand Sharma v. H.P.Sharma etc., (1974) ILR 1 (Delhi), 190; P.Jayappan v. S.K.Perumal, First Income Tax Officer, Tuticorin, 1984 (149) ITR, 692(Mad); P.Jayappan v. S.K.Perumal, First Income Tax Officer, Tuticorin,, 1984 (149) ITR, 696(SC); Ashok Buscuit Works and Ors v. Income Tax Officer, Hyderabad, 1988 (171) ITR 300 (AP): Rinkoo Steels and others v. K.P.Ganguli, Income Tax Officer and another, 1989 (179) ITR 482 (Delhi); Sant Parkash and Ors. V. Commissioner of Income tax and Ors., 1991 (188) ITR 732 (P H): Universal Supply Corporation and Ors. v. State of Rajasthan and another, 1994(206) ITR 222; Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs the power to do all such acts or employ all such means as are essentially necessary for the exercise of this power which carries with it the duty in proper cases to pass such orders for staying proceedings as will prevent the appeal from being rendered nugatory. The Supreme Court has also referred to a judgment in Burhanpur Tapti Mill Ltd. v. Board of Revenue, Madhya Pradesh, 1955(6) STC, 670, that where the legislature invests an Appellate Tribunal with powers to prevent injustice, it impliedly empowers the Tribunal to stay the proceedings which may result in causing further mischief. The prosecution of the assessee being intrinsically linked to the outcome of the appeals and the Tribunal merely having directed that consideration of the show cause notice shall be kept in abeyance the order may be affirmed. Counsel for the assessee also relies upon a Division Bench judgment of the High Court of Delhi in The Commissioner of Income Tax (Central-II) v. Income Tax Appellate Tribunal and others, to contend that in a similar situation, the High Court of Delhi has held, while considering stay of proceedings, consequent to directions by the Commissioner of Income Tax, under Section 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or computers. The assessee filed an appeal against the order passed under Section 263 of the Act, before the Tribunal. After re-assessment, the assessee filed an appeal against the fresh assessment before the Commissioner of Income Tax, Rohtak, which was dismissed on 10.03.2014. The Assessing Officer had also initiated penalty proceedings under Section 271(1)(c) of the Act and eventually passed an order dated 28.11.2013, imposing penalty. The assessee challenged the order imposing penalty before the Commissioner of Income Tax(Appeals), Rohtak, which was also dismissed. The assessee, thereafter, filed two appeals, one being the quantum appeal and the other against the penalty. Thus, three appeals, one against the order passed under Section 263, the second against the assessment order and the third against the levy of penalty, were filed, were pending before the Income Tax Appellate Tribunal, when the revenue served a notice dated 26.12.2014, calling upon the assessee to show cause, why prosecution be not initiated, under Section 276C(1). The assessee, did not file a reply but instead filed an application in the appeal, challenging the imposition of penalty, before the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecapitulate that proceedings pending before the Appellate Tribunal are an appeal challenging an order passed under Section 263 of the Act, a quantum appeal against an assessment order, passed pursuant to the order passed under Section 263 of the Act, and an order imposing penalty. The revenue has served a notice upon the assessee to show cause why prosecution be not launched. The Tribunal has recorded a finding, while directing the revenue to keep consideration of the show cause notice re-prosecution in abeyance that it is empowered by Section 254(1) to pass such an order. An answer to the questions posed would require consideration as to the nature of the power conferred by Section 254 of the Act. Section 254 of the Act as originally enacted did not confer power upon the Income Tax Appellate Tribunal to grant stay. A debate, therefore, raged whether Section 254 of the Act inhered the power, to grant, stay. After considering the countors of Section 254 of the Act as well as various precedents, the Supreme Court in Income Tax Officer, Cannanore (supra) held as follows:- According to the decision in Burhanpur Tapti Mill Ltd. v. Board of Revenue, Madhya Pradesh,, since the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under subsection (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order Counsel for the parties have fairly conceded that the Act does not empower the Tribunal to consider or entertain an appeal against the legality or validity of a prosecution launched under the Act. The arguments for and against the impugned orders have primarily centered around the interpretation of the words pass such orders thereon as it thinks fit , used in Section 254(1) and any proceedings relating to an appeal used in the first proviso to Section 254(1) of the Act, with counsel for the revenue urging that power conferred by Section 254(1) to grant stay cannot be extended to any matter, which is not subject matter of an appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or a show cause notice shall be kept in abeyance. There is another aspect of the case, namely, if such a power, as has been canvassed by the assessee, were available to the Tribunal, prosecution would have to await the final outcome of proceedings up to the Supreme Court. We are unable to discern any legislative intent or power as would confer upon the Tribunal power to stay consideration of a show cause notice proposing to initiate prosecution, by reading into Section 254, the power to stay independent proceedings merely because they may be affected by the decision of a pending appeal. The legislature having conferred power to grant stay in terms, used in Section 254 (1) and the first proviso, we cannot add to or subtract from the words and expressions used in Section 254(1) or by a process of interpretation confer jurisdiction which legislature, in our considered opinion, did not intend to confer. A prosecution being a consequence of infractions by an assessee cannot be said to be act of harassment or mischief so as to confer power upon the Tribunal, to order that prosecution shall be kept in abeyance. The judgment by the Delhi High Court in The Commissioner of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48) ITR, 830 (SC) are not relevant as they only hold that prosecution is independent of assessment proceedings. The judgment in The Assistant Commissioner, Assessment-II, Bangalore and ors v. Velliappa Textiles Ltd. and Ors., 2003(263) ITR, 550 (SC) pertains to the question whether a company can be prosecuted and is, therefore, not relevant at this stage. The judgment in Madras Bar Association v. Uinon of India, 2014 (10) SCC 1, is also irrelevant as it does not advance the arguments raised by counsel for the revenue. Consequently, we answer the two questions by holding that we cannot read into Section 254 of the Act, any power in the Income Tax Appellate Tribunal to interfere in a prosecution under the Act, either at the stage of a show cause notice or at any other stage. The pendency of appeals regarding quantum and penalty and an appeal challenging an order passed under Section 263 would not, in our considered opinion, confer power upon the Tribunal to stay consideration of a show cause notice calling upon the assessee to show cause why prosecution be not launched. Before we part with the judgment, we would like to clarify that we have confined consideration to the power o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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