9911796707
TMI Blog1982 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany registered under the Companies Act, 1956, is carrying on the business of manufacture and sale of sugar. A penalty of Rs. 8,99,673 was levied on the assessee-company under section 271(1)(c) of the Income-tax Act, 1961 ("the Act"), by the ITO vide his order dated 22-8-1979 for the assessment year 1973-74. The penalty was confirmed by the Commissioner (Appeals) vide order dated 10-11-1980 and in second appeal the same was also confirmed by the Appellate Tribunal vide its order dated 1-12-1981 in the appeal captioned above. The assessee moved a reference application No. 78/1962 under section 256(1) of the Act on 26-2-1982 arising out of the aforesaid decision of the Appellate Tribunal which is pending disposal. So far as the quantum matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that it is for the price of cane and wages and running the factory that all the funds are blocked in use. The assessee has expressed its readiness to furnish bank guarantee to the Commissioner or second charge over assets of the company to secure the entire disputed amount during the course of its payment in instalments of Rs. 37,490 as proposed. The assessee has also filed an affidavit in support of the stay petition. 3. Since a preliminary objection was raised on behalf of the revenue to the maintainability of the stay petition after the decision of the appeal by the Appellate Tribunal and during the pendency of the reference application, Shri Gulati argued on this preliminary objection. Firstly, he drew our attention to the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference is a continuation of appeal proceedings and the power of the Tribunal to grant stay during the pendency of the appeal being not disputed, the petition for stay is maintainable during the pendency of the reference application before the Tribunal. Next Shri Gulati submitted that since under sub-sections (5) and (6) of section 255, the Appellate Tribunal acted as a Civil Court, the stay could be granted by it in exercise of its inherent powers. He also submitted that in the case of Director D. R. D. Laboratories, the Andhra Pradesh High Court had recognised the jurisdiction of the High Court to pass interlocutory orders till parties have sufficient time to approach the Supreme Court after obtaining special leave to appeal. He sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no prima facie case was made out by the assessee and that according to the assessee's own case it had already made an overdraft and that the assessee may have other resources also. In reply the additional point made by Shri Gulati was that the assessee had paid the tax due as a result of the order in the quantum matter and that only the penalty remained to be paid. 5. We have considered the rival submissions as also the various provisions of the Income-tax Act, 1961, having a bearing on the controversy and the decisions referred to above. The Appellate Tribunal acts as a civil court for certain purposes specified in sub-section (6) of section 255 and the purpose of stay not being stated or implied there, we do not accept the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence has not yet been made. In that case the Supreme Court had observed that when a reference is made, the decision of the Appellate Tribunal cannot be looked upon as final and the appeal before it cannot be taken as finally disposed of and that it is only when the High Court or the Supreme Court decides the question that has been referred that the Tribunal has to reconsider the matter and decide in conformity with the order of the High Court or the Supreme Court as the case may be. This is not the combined result of section 254(4) and section 260(1) of the Act. These provisions are to the effect that save as provided in section 256, the orders passed by the Appellate Tribunal on appeal shall be final and that after the questions of law ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, take the view that the petition for stay could not be moved before the Appellate Tribunal during the pendency of the reference application before it. 6. So far as the merits of the prayer for stay is concerned this question would not arise in view of our decision on the preliminary issue. However, since we heard arguments on merits also, we proceed to express our opinion thereon also. Firstly, the mere possibility of a reference being granted to the assessee does not show that it is a case of existence of a strong prima facie case. Secondly, the mere inability to pay tax penalty on the part of the petitioner is not a proper ground for directing the stay of the recovery of the same. This was also held by the Andhra Pradesh High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
