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TMI Blog2016 (10) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 - - - Dated:- 26-8-2016 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER For The Applicant : Shri Dinesh Vyas For The Respondent : Shri T A Khan ORDER PER AMIT SHUKLA, J.M.: By way of aforesaid Stay Application, the assessee seeks for firstly , extension of stay of outstanding demand of ₹ 144,14,48,284/- which was earlier stayed by the Tribunal for the period of six months vide order dated 21.02.2016; and secondly , prayed for stay of initiation of penalty proceedings under section 271(1)(c) by the AO in relation to the quantum of assessment which is the subject matter of stay, till the passing of the order by this Tribunal in the quantum appeal. 2. Before us, the Ld. Senior Counsel, Shri Dinesh Vyas, regarding extension of stay submitted that, post grant of stay order by the Tribunal, the appeal was fixed for hearing on 5th July, 2016, on which date, Ld. CIT DR objected that, the issues in the appeal relate to international taxation, therefore, steps should be taken for transfer of appeal to designated bench, that is, L Bench. Thereafter, Hon ble Members gave direction to the Registry that the matter be plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision under section 275 also. In support, he drew our attention on the observations made on page 411 of the said report. He further relied upon the following two decisions, which along with the synopsis are reproduced as under:-:- i) Paulsons Litho Works vs ITO and Others -208 ITR 676(Mad) In this case, the Madras High Court held that The appellate jurisdiction impliedly grants the power of doing all such acts or employing such means as are essentially necessary to its effective exercise and the statutory conferment of the appellate power carries with it the duty and obligation as well, in proper cases, to make or grant such orders for stay of the order under challenge in appeal or staying of any or all further proceedings pursuant to the said order, pending disposal of the appeal before the appellate authority. , having earlier observed that power under 251 of the Act and under 254 of the Act are similar . ii) Rayala Corporation (P) Ltd. vs UOI and Others-288 ITR 452 (Mad) In this case, an Appeal against the Assessment Order was pending before the Tribunal. The Madras High Court held that in such a situation the limitation period for the levy of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner and not to the Appellate Tribunal. There is no provision in Section 220 under which the Income-tax officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under Section 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income-tax Officer may grant time for the payment of the tax. In this manner he can probably keep on granting extensions until the disposal of the appeal by the tribunal. It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief of staying recovery to the assessee but that can hardly be put at par with a statutory power as is contained in Section 220 (6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner. The argument advanced on behalf of the appellant before us that in the absence of any express provisions in Sections 254 and 255 of the Act relating to stay of recovery dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This particularly so sec. 220(6) deals expressly with a situation when an appeal is pending before the AAC, but the Act is silent in that behalf when an appeal is pending before the Tribunal. It could well be said that when s. 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. 13. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that, if the Tribunal proceed to stay recovery of taxes or penalties payable by or imposed on the assessee as a matter of course, the Revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Tribunal. It is needless to point out that the power of stay b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty or tax due from an assessee. At the same time it is significant that under Section 220 (6) the power of stay by treating the assessee as not being in default during the pendency of an appeal has been given to the Income-tax Officer only when an appeal has been presented under Section 246 which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal. There is no provision in Section 220 under which the Income-tax officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under Section 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income-tax Officer may grant time for the payment of the tax. In this manner he can probably keep on granting extensions until the disposal of the appeal by the tribunal. It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief of staying recovery to the assessee but that can hardly be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of High Court and English judgments, finally it is held that the appellate Tribunal must be held to have power to grant stay as incidental or ancillary to its appellate jurisdiction. It is further held that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. However, while holding so, the Hon ble Supreme Court has also observed that the power of stay by the Tribunal is not to be exercised in a routine way or as a matter of course, in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions and the stay will be granted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the penalty proceedings from the end of the month in which the order of Tribunal is received by the Commissioner / Chief Commissioner, when the Tribunal has stayed the penalty proceedings during the pendency of the appeal before it, it cannot be said that the Tribunal has exceeded in its jurisdiction and/or the said order is illegal and/or perverse which calls for interference 10. Further, Hon ble Madras High Court in the case of Rayala Corporation vs. UOI (supra) held that, in case where appeal against assessment order was pending before the Tribunal, then in such a situation, the limitation period on levy of penalty would be 6 months from the end of the month in which the order of the Tribunal received by the AO. The aforesaid decisions will allay the fear of the revenue regarding limitation issue for passing of the penalty order. Before us, the revenue has not brought any contrary decision to what has been laid down by the Hon ble Gujarat High Court. Thus, on the facts of the present case, we direct the AO to keep the penalty proceedings in abeyance concurrently for the period of 6 months or till the passing of the order by this Tribunal, whichever is earlier. On the nex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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