2003 (12) TMI 293 - AT - Income Tax

Summary

Issues:
- Stay of collection of outstanding demands pending disposal of appeals under section 254(2A) of the Income-tax Act.

Analysis:
The assessees sought stay of collection of outstanding demands pending the disposal of their appeals. Initially, a conditional stay was granted by the ITAT, but due to the appeals not being taken up within six months, the stay expired as per the provisions of section 254(2A) of the Income-tax Act. The assessees reapplied for stay, stating that the appeals were already posted for hearing but got adjourned multiple times without fault on their part.

The learned DR argued against granting stay on merits, claiming no prima facie case existed. However, considering the circumstances and the assessees' compliance with earlier stay conditions, the plea of the learned DR was rejected. Consequently, the Bench granted stay of recovery of outstanding amounts against the assessees until 30-11-2003. As the assessees' financial position remained precarious, they filed another set of stay petitions seeking to halt the collection of outstanding demands until the appeals' disposal, mentioning that the appeals were scheduled for hearing on 11-12-2003.

The Tribunal examined the statutory powers conferred by section 254 of the Income-tax Act, emphasizing the Tribunal's inherent power to grant stay in deserving cases. The Tribunal noted that while the second proviso in sub-section (2A) of section 254 mandated automatic vacation of stay after six months, it did not restrict the Tribunal's power to grant fresh stay on a new application if circumstances warranted. The provisos aimed to prevent unscrupulous assessees from unduly prolonging stays, ensuring a review of the matter after six months to assess the need for fresh stay orders.

Considering the facts and circumstances, the Tribunal granted an ad interim stay of recovery of outstanding amounts against the assessees. The assessees were directed not to alienate immovable properties until the appeal's disposal, with their counsel providing an undertaking to that effect.

In conclusion, the Stay Petitions were allowed, highlighting the Tribunal's authority to grant fresh stays based on merit and the specific circumstances of each case.