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TMI Blog2017 (12) TMI 1464X X X X Extracts X X X X X X X X Extracts X X X X ..... is view the material in assessment proceedings requires such an action. I Moreover, taking a prima facie view in the matter, we also find that if at all the AO wanted to levy the penalty without waiting for the orders of the Tribunal in quantum appellate proceedings then, as per the provisions of section 271(l)(c), such an order could only have been passed by 30th April, 2014 and 30th April, 2015 for AY 2006-07 & AY 2007- 08 respectively. Moreover, we find that even equity demands stay of penalty proceedings be granted in the instant case. Provisions of section 275 adequately safeguard the interest of revenue and hence even after the disposal of the appeals by the Tribunal, adequate time is available with the AO for levy of penalty. Thus we grant a stay against penalty proceedings u/s 271(l)(c) of the Act initiated by the AO in the instant case, vide show cause notices dated 12th April, 2017, for a period of six months or till disposal of appeals whichever is earlier. - ITA NO. 6741/Delhi/2013 And ITA No. 6907/Delhi/2014 And Stay No. 265 And 266/Del/2017 - - - Dated:- 3-5-2017 - S. V. MEHROTRA, VICE-PRESIDENT AND SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act, the Tribunal also has inherent powers to grant a stay against penalty proceedings pending disposal of quantum appeals before it. In support of his submission, he relied upon the decision of the Hon ble Jurisdictional High Court in the case of CIT v. ITAT [2013] 216 Taxman 14 (Mag.), decision of the Hon ble Gujarat High Court in case of Asstt. CIT v. GE India Industrial (P.) Ltd. [2013] 358 ITR 410 (Guj.), decision of the Hon ble Apex Court in case of ITO v. M.K. Mohammad Kunhi [1969] 71 ITR 815 and decision of the Hon ble Andhra Pradesh High Court in case of ITO v. Khalid Mehdi Khan [1977] 110 ITR 79. It was submitted by Mr. Syali that as part of its implied powers, the Tribunal is deemed to possess, by necessary intendment, all such powers as are necessary to make its order effective. It was submitted by him that this principal is embodied in the maxim ubi aliquid conceditur, conceditur et id sine quo res ipsa esse non potest meaning thereby that where anything is conceded, there is conceded also anything without which the thing itself cannot exist. It was submitted by Mr. Syali that this doctrine has been cited with approval by Apex Court in case of Savitri v. Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 239. Legislature, according to him, has given an option to avoid multiplicity of proceedings which must be exercised considering material available during assessment. It was then submitted by him that even the statute does not warrant levy of penalty at this stage as this is a case wherein the Tribunal will be acting as the first appellate authority. It was submitted that provisions of section 275 give ample powers to the AO for levying penalty u/s 271(l)(c) of the Act post disposal of appeal by the ITAT. It was further submitted that the levy of penalty at this stage is itself bad in law and barred by limitation. Lastly, it was submitted by him that if the AO proceeds to levy penalty at this stage without waiting for the orders of the ITAT in quantum appellate proceedings then an onerous penalty demand of approx. ₹ 86 crores and ₹ 146 crores for AYs 2006-07 and 2007-08 respectively would get created against the petitioner. 3. On the other hand, the Ld. DR. vehemently opposed the grant of stay of penalty proceedings in the instant case. It was submitted by him that the Tribunal does not have the jurisdiction to grant a stay against the penalty proceedings u/s 271(l) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in that order. Provided further that where such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit so however, that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed. Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. 4.2 As is apparent from first proviso to sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer becoming meaningless if ultimately the order passed by the CIT is found to be invalid on grounds of jurisdiction or on merits and, second, to ensure that the fruits of success in the appeals are not rendered meaningless or nugatory. It has not been shown before us by the petitioner as to what error was committed by the Tribunal in passing the stay orders, nor was it argued that the Tribunal did not exercise its discretion on the basis of settled parameters for granting stay of proceedings. 4.4 Similarly, in the case of GE India Industrial (P.) Ltd. (supra), an enhancement to the total income was made by the CIT(A). Being aggrieved, the assessee approached the ITAT and sought a stay against the penalty proceedings u/s 271(l)(c) initiated by the CIT(A) on the income enhanced by it. The Tribunal, considering the fact that it was virtually sitting as the first appellate authority on the impugned additions granted a stay against such penalty proceedings. This was upheld by the Hon ble Gujarat High Court by holding as under:- 5.1 ..Under the circumstances, the outcome of the decision in appeal by the Income-tax Appellate Tribunal has a direct beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, of the opinion that the Tribunal has the power to stay related proceedings if it is in the interest of justice. 5. After having crossed the hurdle of establishing jurisdiction in the matter, we also find that this is a fit case wherein such a power should be exercised by us. The Ld. Sr. Counsel for the assessee has filed a date chart before us (reproduced above). As is clearly evident for AY 2006-07, penalty proceedings were first initiated by the AO by issuance of show cause notice u/s 274 dated 30th October, 2013. The assessee, vide reply dated 28th November, 2013 requested the AO to keep the penalty proceedings in abeyance pending disposal of first appeal by the ITAT. The request so made was apparently accepted as for more than three years no further action was taken by the AO. It is only now that vide show cause notice u/s 274 dated 12th April, 2017, the AO wants to complete the penalty proceedings without awaiting for the order of the Tribunal. Factual position is the same in case for AY 2007-08. Provisions of section 275 provide for the outer limit within which an order of penalty u/s 271(l)(c) needs to be culminated. Section 275 states as under:- 275(1) No orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiate the penalty proceedings kept in abeyance. Moreover, taking a prima facie view in the matter, we also find that if at all the AO wanted to levy the penalty without waiting for the orders of the Tribunal in quantum appellate proceedings then, as per the provisions of section 271(l)(c), such an order could only have been passed by 30th April, 2014 and 30th April, 2015 for AY 2006-07 AY 2007- 08 respectively. Moreover, we find that even equity demands stay of penalty proceedings be granted in the instant case. Provisions of section 275 adequately safeguard the interest of revenue and hence even after the disposal of the appeals by the Tribunal, adequate time is available with the AO for levy of penalty. In this regard, we find support from the following observations of Hon ble Gujarat High Court in the case of GE India Industrial (P.) Ltd. (supra):- 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 considered from another angle. Even section 275(1)(a) of the Income-tax Act provides that in a case where the relevant asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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