TMI Blog2012 (7) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted a positive error in consciously extending the interim order of stay granted in the pending appeal beyond the period of 365 days ignoring the language of Section as the language of the legislature being quite clear about the outer time limit stipulated for the duration of the operation of stay - in favour of revenue. - Income Tax Appeal No. 160 of 2012, 161 of 2012 - - - Dated:- 5-7-2012 - MR JUSTICE D V SHYLENDRA KUMAR, MR JUSTICE B MANOHAR, JJ. For Appellant: Sri K V Aravind, Adv. For Respondent: Sri K K Chythanya, Adv. J U D G M E N T These two appeals by the revenue are under Section 260A of the Income Tax Act, 1961 [for short, the Act], directed against the orders dated 19-1-2012 and 20-1- 2012 respectively and both orders passed on applications filed by the respondent-assessee for extending orders of stay which had been granted earlier by the tribunal beyond the period of 365 days in all and till the disposal of the appeals. 2. Revenue had come up in appeal contending that the orders passed by the tribunal are in the teeth of statutory provisions, particularly the provisos to 254(2A) of the Act and more particularly being in ignorance of third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified 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 of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period of 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessees, in the first instance is to raise a preliminary objection about the tenability of these appeals and the need for examining the question and answer the same. It is submitted that with the disposal of the main appeal in which the interim orders have been passed, the question becomes academic, as the interim orders have now merged with the final orders passed by the tribunal and do not survive independently. It is, therefore, submitted that there is no need for examining the appeals and they should be dismissed. 14. Even on merits, both Sri Chaithanya and Sri Sai Prasad have very assertively submitted that a provision of this nature, which is more in the nature of a provision in terrorem and to impress upon the tribunal to see that in an appeal where it has granted an order of stay, the appeal is disposed of expeditiously and an outer time limit is fixed for such disposal, but it does not affect the power of the tribunal either for granting or extending the stay even beyond the period of 365 days. 15. With reference to the statutory provisions, learned counsel for the assessees have submitted that the emphasis is on the expedition disposal of the appeal by the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KUMAR COTTON MILLS PVT LTD [supra], it should be read as one to instill a sense of urgency over the tribunal for disposal of the appeals. 18. Sri Chaithanya has also pointed out that the embargo or curtailment of power on the tribunal in passing interim order if at all is to be found only in the second proviso to Section 254(2A) of the Act and the third proviso does not place any embargo and restrictive manner of functioning of the tribunal, but only seeks to achieve a statutory provision acting for vacating or dissolving the interim order granted by the tribunal earlier and therefore when once the second proviso had been examined and interpreted as not one achieving the object of curtailing the power of the tribunal, as in the decision of the Bombay High Court, the addition of the third proviso cannot make any difference and request for our comments on the view taken by the Bombay High Court and therefore seek for dismissal of the appeals. 19. The view taken by a Division Bench of this Court in the case of COMMISSIONER OF CENTRAL EXCISE, MANGALORE vs INDIAN OIL CORPORATION [2010 (20) STR 458] is also relied upon to submit that the view expressed and the understanding of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed three hundred and sixty-five days, even if the delay in disposing of the appeal is not attributable to the assessee. This amendment will take effect from 1st October, 2008. 22. This is the notes relating to the modification brought about to the third proviso to Section 254(2A) of the Act by including the portions even if the delay in disposing of the appeal is not attributable to the assessee. Section 254 of the Act deals with the manner of disposal of an appeal by the Appellate Tribunal. The Appellate Tribunal being a creature of statute which powers jurisdiction and manner of functioning are all as enabled under the Statutory provisions and is fully regulated and should function within the bounds of the statutory provisions by the statute. 23. The Income Tax Appellate Tribunal is not an Authority akin to a Court but is a Special Tribunal with limited jurisdiction as indicated in the statutory provisions and for a precise purpose. It is not open to the Tribunal to assume such powers and jurisdiction as are not conferred on it by the statutory provisions. 24. As the appeal itself is a statutory right, whether to the assessee or to the Revenue and can be availed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered opinion, 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. It is not the interpretation which can be attempted for understanding the scope of this provision. It is a cardinal rule of interpretation that any interpretation if so warranted and if the statutory provisions are a little ambiguous for understanding it, should be interpreted in consonance and for achieving the object for which change is brought about and in a manner to effectuate the legislative intent and not to defeat the same. It is for this reason, we are in disagreement with the view expressed by the learned Judges of the Bombay High Court in the two decisions referred to above. 28. However, learned counsel for the assessee has placed reliance on the judgment of the Supreme Court in the case of KUMAR COTTON MILLS PVT. LTD. [supra] to submit that while examining the scope of analogous provisions under the Central Excise Act, 1944, the Supreme Court had an occasion to interpret the provisions of Section 35(C) to the effect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deprived of the benefit of stay, which the assessee had otherwise enjoyed till then and the interpretation to be placed on the provisions should not be to cause hardship or injustice to the assessee, as it is the provision which occurs in the context of interpretation of an enabling provision to grant stay etc., while we appreciate this argument, at the same time we cannot ignore the language of Section and intended amendment brought about 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, it only leaves us to hold that the Tribunal is not enabled to pass orders granting stay beyond the period of 365 days. Any other understanding or interpretation is nothing short of doing violence to the language of the statutory provision in the name of interpretation of the provision and permitting an action which is clearly in contravention of the statutory provisions. 33. Insofar as the function and duty of the High Courts is concerned, this court being the jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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