TMI Blog2001 (2) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, a Public Sector Undertaking, had filed its return declaring a total income of Rs. 9,94,40,04,774. The relevant assessment was completed by the Dy. CIT, Spl. Range-20,New Delhivide order under section 143(3) dated27-2-1998on a total income of Rs. 9,95,08,43,810. In the said assessment, deduction for "licence fee" of Rs. 1,47,95,35,200 stood allowed, as claimed by the assessee. Further, the Assessing Officer allowed deduction of Rs. 35,98,07,973 for cancellation of bills accounted for as income (prior period adjustments). Subsequently, on examination of the relevant records, the ld. CIT Delhi-III, New Delhi felt that on the above two aspects, the assessment order dated 27-2-1998 was erroneous and prejudicial to the interest of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at liberty to initiate appropriate penalty proceedings and charge interest/s as per law while completing the set aside assessment," 3. It appears that in the fresh assessment made in pursuance of the above order under section 263 of the Act, the Assessing Officer disallowed deductions for Rs. 1,47,95,35,200 and Rs. 35,98,07,973. This resulted in the creation of a demand of Rs. 1,60,35,67,210. The assessee had filed an appeal before the Tribunal on3-4-2000against the order of the CIT under section 263 of the Act and has also filed an appeal before the CIT (Appeals)-XV,New Delhiagainst the order passed by the Assessing Officer under section 143(3), read with section 263 of the Act. The appeal filed before the Tribunal has already been fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d demand. However, in addition to the aforesaid embargo, we grant a stay on the recovery of the outstanding dues and direct not to initiate any recovery proceedings till the disposal of the appeal by the Tribunal." The learned counsel submitted that it was a precedent which should be followed in the present case. On the question of maintainability of the present stay petition, the ld. counsel emphatically submitted that in his order under section 263, the CIT had given positive directions to the Assessing Officer to disallow assessee's claims of Rs. 1,47,95,35,200 and Rs. 35,98,07,973, thereby leaving no discretion with the Assessing Officer to apply his own mind. The appeal against the fresh assessment order passed by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly opposed the assessee's petition. He submitted that in similar situation in assessment year 1996-97, the assessee's request of stay of demand was rejected by the Department and on the writ petition filed by it, the Hon'ble Delhi High Court, while refusing to grant stay of demand, had directed the assessee to deposit a certain sum by the specified date. The ld. counsel then submitted that before the Tribunal, the assessee is in appeal against the order of the CIT under section 263 of the Act but it is not this order which has resulted in the creation of the demand. He submitted that the demand has arisen as a result of fresh order under section 143(3), read with section 263 of the Act and for that the assessee can seek such remedy as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainable. From theApex Courtdecision in the case of M.K. Mohammed Kunhi, it is abundantly clear that pendency of appeal before the Tribunal is a sine qua non for exercising by it the incidental and ancillary power of granting stay of demand. To our mind, this power is an adjunct of, and flows from, the substantive power to hear the appeal pending before the Tribunal. The question that arises is pendency of which appeal ? In our considered opinion, the appeal should be the one which is in relation to the order giving rise to the disputed demand. No doubt, the assessment in the present case, which has given rise to the demand in question has been made in pursuance of the directions contained in the Commissioner's order under section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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