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TMI Blog2020 (7) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... n the contrary the ld DR vehemently opposed the stay petition. He submitted that the Hon'ble Karnataka High Court has held in the case of CIT v. Ecom Gill Coffee Trading (P.) Ltd. [2014] (362 ITR 204) that the stay could not be extended by the Tribunal beyond the period of one year. He submitted that the stay was originally granted to the assessee on 21.4.2017 and since then, the Tribunal has extended the stay several times. Accordingly, he pleaded that the assessee may be directed to pay further amount towards the outstanding demand. 4. We have heard the rival contentions. With regard to the contentions of Ld D.R, we notice that the co-ordinate bench of Tribunal has extensively dealt with the same in SAP labs (I) P Ltd (67 taxmann.com 78). For the sake of convenience, we extract below the observations made by the Tribunal in SAP labs (I) P Ltd (supra):- "13. After the aforesaid statutory Amendments, the provisions of Sec. 254(2A) now stands thus: "Section 254-Orders of Appellate Tribunal (2A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions in letter and spirit and the introduction of the third proviso to Finance Act 2008 makes it abundantly clear that the purpose of putting the outer limits is only for curtailing the period an order of stay can operate and to ensure that it has no effect after the period of 365 days from the date of initial order. The Hon'ble Court further held that the interpretation of provision of this nature particularly to interpret in a manner so as to enable or confer power on the Tribunal to extend a stay order beyond 365 days, would be to understand contrary to such statutory provision. The language of the Section cannot be ignored and intended amendment brought about by the Finance Act, 2008 and the language of the legislature being quite clear about the outer time limit stipulated for the duration of the operation of stay and if the legislature has stipulated the outer time limit of 365 days within which the stay order granted by the Tribunal can operate, the Tribunal is not enabled to pass orders granting stay beyond the period of 365 days. 15. The learned counsel for the Assessee pointed out to us the legal position as laid down by the Hon'ble Karnataka High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tay beyond a period of 365 days after the insertion of the third proviso to Sec. 254(2A) of the Act by the Finance Act, 2008. According to him therefore the decision of the Hon'ble Karnataka High Court will no longer be applicable in view of the third proviso being declared unconstitutional by the Hon'ble Delhi High Court. The leanred counsel for the Assessee drew our attention to the decision of the Hon'ble Supreme Court in the case of Kusum Ingots & Alloys Ltd. v. Union of India AIR 2004 SC 2321, wherein it was held that an order passed on writ petition questioning the constitutionality of a Parliamentary Act whether interim or final, in the light of Article 226(2) of the Constitution of India, will have effect throughout the territory of India. Further reference was also made to a decision of the Hon'ble Karnataka High Court in the case of Shiv Kumar v. Union of India W.P. No. 13112/2012 (GM-RES-PIL) wherein the Hon'ble Karnataka High Court following the ruling in the case of Kusum Ingots & Alloys Ltd. (supra) held that a provision of the Central Act declared unconstitutional by Hon'ble Kerala High Court will be applicable throughout India. The case bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section(1) of Section 10A of the Act. Keeping in mind the pronouncement of the Division Bench of the Kerala High Court and reading the same in the context of Kusum Ingots and Alloys Ltd, the position of law with regard to sub-section (1) of Section 10A of the Act is now been made clear, particularly, insofar as State of Karnataka is concerned." (Emphasis Supplied) 18. Further reference was made to the decision of the Hon'ble Bombay High Court in the case of CIT v. Smt. Godavaridevi Saraf [1978] 113 ITR 589 wherein the Hon'ble Bombay High Court. In the aforesaid decision the facts were that the assessee submitted a return of income for the asst. yr. 1968- 69 declaring therein income of Rs. 29,038 on August 30, 1969. Having regard to the provision of s. 140A(1) of the Act, she was required to make self- assessment by September 29, 1969. The amount of tax payable by way of assessment was Rs. 4,342. The assessee did not pay the said tax till the ITO made assessment for the asst. yr. 1968- 69 by his order dated August 31, 1971. As no tax was paid by way of self-assessment, an opportunity to show cause why a penalty should not be imposed under s. 140A(3) was given to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution of India, it would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that Court and start proceeding in direct violation of it. If a Tribunal can do so, all the subordinate Courts can equally do so, for there is no specific provision, just like in the case of the Supreme Court making the law declared by the High Court binding on subordinate Courts. It is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working ; otherwise, there would be confusion in the administration of law and respect for law would irretrievably suffer. 6. In view of this clear pronouncement of the Supreme Court, it is not controverted by Mr. Joshi on behalf, of the Revenue that an Tribunal sitting at Madras is bound to proceed on the footing that s. 140A(3) of the Act is non-existent in view of the pronouncement of the Madras High Court in the case of A.M. Sali Maricar (supra). Actually, the question of authoritative or persuasive decision does not arise in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of justice. 21. The learned DR pointed out that Hon'ble Karnataka High Court in the case of Ecom Gill Coffee Trading (P.) Ltd. (supra) has not followed the decision in the case of Narang Overseas (P.) Ltd. (supra) whereas the Hon'ble Delhi High Court in the case of Pepsi Foods (P.) Ltd. (supra) has followed the ratio laid down in the case of Narang Overseas (P.) Ltd. (supra). He therefore submitted that the decision of the Hon'ble Karnataka High Court should be followed and the extension of stay should not be granted. He also submitted that the Assessee has no financial hardship and therefore should be directed to pay the outstanding demand. 22. The learned counsel for the Assessee in his rejoinder pointed out that the decision rendered in the case of Narang Overseas (P.) Ltd. (supra) was prior to insertion of 3rd proviso and Hon'ble Delhi High Court only referred to the said decision to emphasis the point that extension of stay should not be refused if the delay in the appeal not being heard is owing to delay on the part of the Assessee. With regard to financial hardship, the learned counsel for the Assessee pointed out that the Hon'ble Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessee, the non-existence of financial hardship cannot be conclusive in the matter. In any event these parameters have already been tested by the Tribunal when it originally granted an order of stay subject to certain conditions. 25. For the reasons given above, we direct that there shall be an order of stay of recovery of outstanding demand for a period of 180 days from this day or till disposal of the appeal of the Assessee by the tribunal, whichever is earlier." 5. It is stated that there is no change in the facts and circumstances of the case and further we notice that the delay in disposing of the appeal is not attributable to the assessee, we are of the view that the stay already granted by the Tribunal deserves extension. Accordingly we extend the stay for further period of 180 days commencing from the date of this order or till the date of disposal of the appeal, whichever period expires earlier. We make it clear that the assessee should not seek adjournment on the date of hearing without reasonable cause, failing which the present stay order shall be subjected to review by the Division Bench hearing the appeal. 6. In the result, stay application filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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