TMI Blog2014 (4) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the Learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction. Thus appeal filed by the assessee against the order of Ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable - Decided against assessee. - IT APPEAL NOS. 141 TO 144 (LKW.) OF 2009, C.O. NOS. 6 TO 9 (LKW.) OF 2009 - - - Dated:- 22-4-2014 - U.B.S. BEDI, JUDICIAL MEMBER (AS A THIRD MEMBER), SUNIL KUMAR YADAV AND A.K. GARODIA, JJ. For The Appellant : P.K. Thakur, CA and P.K. Kapoor, CA For The Respondent : Manoj Kumar Gupta, CIT DR THIRD MEMBER ORDER OPINION UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961 U.B.S. Bedi, Judicial Member (As a Third Member) - There being difference of opinion between the members constituting the Bench, following four questions were formulated by the members of the bench on 31.07.2009 and reference was made to the Hon'ble President u/s 255(4) for nomination of the third member. (1) Whether the CIT(A) has jurisdiction to decide the assessee's petition for stay or recovery of demand dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer at the income of ₹ 69,85,01, 110/- for AY. 2001-02, ₹ 53,92,06,660/- for AY. 2002-03, ₹ 41 ,63,05,910/- for AY: 2003-04 and ₹ 35,27,73, 11 0/- for A.Y. 2006-07, and the Assessing Officer raised demand of ₹ 51,60,27,002/- for AY. 2001-02, ₹ 31,75,68,629/- for AY 2002-03, ₹ 23,00,96,402/- for AY. 2003-04 and ₹ 15, 78,54,146/- for A Y. 2006-07. The claim of the 'local authority' in assessment years 2001-02 and 2002-03 and the claim of exemption u/s 11 of the I.T. Act in A.Yrs 2003-04 and 2006-07 has been denied by the Assessing Officer. 5. Aggrieved by the assessment orders each dated 29/12/2008 for all the aforesaid assessment years, the assessee filed appeals u/s 246-A before the Learned CIT(A). The assessee also filed application for stay of demand and requested to keep the demand in abeyance till the disposal of the appeals. The assessee also filed application for stay of demand before the Assessing Officer who issued a letter dated 30/01/2009 intimating the assessee that 50% of the demand had been stayed till 15/03/2009 or disposal of first appeal, whichever is earlier. The Assessing Officer also required the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to claim exemption under the said provision and that similar finding had been given for the assessment year 2001-2002 and 2002-2003. He also pointed out that his predecessor has held that the assessee was not a local authority but an Association of Persons for the assessment year 1999-2000, so its income could not be held to be exempt from tax either u/s 10(20) or u/s 10(29) of the I.T. Act, 1961. The Learned CIT(A) also referred to the judgments of the Hon'ble Jurisdictional High Court in the case of Krishi Utpadan Mandi Samiti v. Union of India [2004] 267 ITR 460 wherein it was held that the Krishi Utapadan Mandi Samiti was not entitled to exemption u/s 10(20) of the Act. He also observed that a similar view had been taken by the Hon'ble Supreme Court in the case of Agrl. Produce Market Committee v. CIT [2008] 305 ITR 1. As regards to the assessment year 2003-2004 and 2006-2007, the Learned CIT(A) pointed out that the assessee's application for registration u/s 12AA of the Act was rejected by the CIT-I, Lucknow vide order dated 29/09/2006, regarding the various case laws relied by the assessee, the Learned CIT(A) observed that those decisions were related to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly relied upon the order of Ld. Judicial member to plead for agreeing with the opinion of Ld. Judicial Member and both the sides have also filed their respective written submissions which are almost in line with the views taken by Ld. Accountant and Judicial Members respectively. 9. After having considered rival submissions in the light of various case law cited by rival sides made before the Bench and reiterated before me in the light of relevant provisions of law, I find that Section 250 of the I. T. Act, 1961 provides for procedure in appeal which envisages that the order of CIT(A) disposing of the appeal shall be in writing and shall state the point for determination, the decision thereon and the reasons for the decision. But at the time of disposal of stay application, neither the appeal of assessee was considered by Ld. CIT(A) nor disposed of as envisaged in the relevant provisions of law. It was only the first appellate authority having passed the order, on the stay application moved by the assessee, on 05.03.2009, against which assessee has preferred appeals. It is not in dispute that powers to grant ancillary and incidental relief is there but there should be appeal. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble court has held that the CIT(A) has the power to grant stay which is incidental or ancillary to its appellate Jurisdiction. In the instant case, there is no dispute as regards to the aforesaid proposition because the Learned CIT(A) has already granted the partial stay to the assessee but nowhere Hon'ble court has held that the Tribunal can interfere in the order of the CIT(A) for granting the stay. The ITAT can grant the stay only in its appellate Jurisdiction i.e. when the appeal is pending before it. Similarly in the case of Paulsons Litho Works v. ITO [1994] 208 ITR 676, the Hon'ble Madras High Court has held as under: The Supreme Court in ITO v. M. K. Mohd. Kunhi [1969] 71 ITR 815 held that the Appellate Tribunal had powers to stay collection of tax even though there was no specific provision conferring such power on the Tribunal. This power of the Tribunal was considered to enure to the Tribunal even during the pendency of a reference made to the High Court under section 256 of the Income-tax Act, 1961. This decision has remained undisturbed either on account of any subsequent decision to the contrary or a statutory amendment to the Act. The Supreme Court had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, in order to avoid causing further mischief or injustice, during the pendency of the appeal. So, the emphasis is on the pendency of appeal which means, when the appeal is pending, the proceedings and other ancillary relief can be granted. No doubt that no appeal is pending before the Tribunal, so the Tribunal is not empowered to entertain an appeal in exercising of its ancillary and incidental powers to dispose of the appeal. 12. Similarly the Hon'ble Gujarat High Court in the case of Dy. CIT v. Nirma Ltd., while deciding the Special Civil Application No. 14644, 14648 and 14649 of 2008 wherein the preliminary objection was raised on behalf of the respondent assessee to the effect that instead of challenging orders of the Tribunal by way of Writ Petitions, the petitioners (Revenue department) was required to prefer tax appeals as provided by section 260A of the I.T. Act, 1961. The Hon'ble High Court, vide order dated 26/12/2008 while rejecting the petitions, has held as under: 3. On going through Provisions of Section 260A of the Act, it is apparent that an Appeal shall lie against an order made by the Tribunal in Appeal. The orders under challenge have been ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26 of the Constitution of India when the appeal is pending for disposal before the appellate authority. In the present case also the appeal is pending before the Learned CIT(A) so the Tribunal cannot entertain the appeal against the order passed on the stay application moved by the assessee because there cannot be two appeals on the same issue pending before the appellate authority i.e. the CIT(A). So considering the totality of the facts as discussed herein above, the decisions relied by the learned counsel for the assessee are of no help to the assessee. 15. On a similar issue the Hon'ble Jurisdictional High Court in the case of Abbas Wazir (P.) Ltd. v. ITAT [1994] 205 ITR 457 has held as under: A perusal of sections 256 and 260 of the Income-tax Act, 1961, shows that, while applications under section 256(1) or 256(2) are pending, the Tribunal retains the appellate power and it does not become functus officio as, after the decision by the High Court or the Supreme Court, it has to pass necessary orders in conformity with those judgments. Once it is held that the Tribunal retains its appellate power during the pendency of an application under section 256(1) or (2), the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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