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TMI Blog2014 (4) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... will pass such an order i.e. what will be the nature or status of such order passed by he CIT(A)? (3) Whether such order (supra) passed by the CIT(A) is appealable before the Tribunal or not i.e. can such an order be appealed against before the Tribunal by way of an appeal under section 253 of the Act, or can be challenged only before the Hon'ble High Court by way of writ petition? (4) If such an order (supra) is found to be appealable before the Tribunal, then can the Tribunal entertain such an appeal against such order without there being appeal before it against the order of the CIT(A) in appeal against the order of the A.O. or other orders appealable under section 246A of the Act, as the case may be, for the reason that the CIT(A) has not preferred to decide the assessee's appeal pending before him? " 2. Hon'ble President nominated me to give my opinion u/s 255(4) on the above noted questions. 3. As per the questions formulated by both the members, the main crux of issue relates to, whether in the absence of any appeal, the Tribunal has any jurisdiction to entertain the appeal of the assessee against the order passed by Ld. CIT(A) on the application of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Writ Petitions before the Lucknow Bench of the Hon'ble Allahabad High Court and the Hon'ble Court vide order dated 17/02/2009 in the said Writ Petitions numbered as 1659, 1660 & 1662 of 2009 for the assessment year 2001-2002, 2002-2003 and 2003-2004 gave the following directions: "Accordingly, we dispose of the writ petition directing the Commissioner of Income Tax (Appeals) to decide the application for interim relief within a period of two weeks from the date of receipt of certified copy of this order without prejudiced with the order passed by this court. For a period of two weeks or till disposal of the application for interim relief whichever is earlier, further proceedings shall be kept in abeyance. The Appellate Authority is directed to decide the appeal expeditiously in terms of the above." 6. In pursuance of the aforesaid directions of the Hon'ble High Court, the assessee furnished the petitions for interim relief to the Learned CIT(A). The assessee submitted before the Learned CIT(A) that it is a local authority and its income is exempt by virtue of section 10(20) of the IT. Act for the assessment years 2001-2002 and 2002-2003 while in respect of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m relief to the assessee by way of stay of demand. The Learned CIT(A) pointed out that the Assessing Officer had given a finding that the entire receipts of the assessee were not routed through the income and expenditure account but were taken directly to the balance sheet, for that reason the Assessing Officer had made the additions while computing the income of the assessee for various years. The Learned CIT(A) was of the view that the Board's Circulars Nos. 530 and 589 relied upon by the assessee did not advance its case for stay of demand as the issue relating to the eligibility of exemption u/s 10(20) and u/s 11 of the Act had not so for been decided in favour of the assessee in any earlier assessment years, therefore, the assessee was not supported by the above cited circulars. The Learned CIT(A) held that 50% of the demand raised by the Assessing Officer for the assessment year under consideration deserves to be stayed. He accordingly stayed 50% of the demand till the disposal of appeals filed before him by the assessee provided that the balance 50% demand to be paid on or before 18/03/2009, in the failure of the above directions the order shall stand vacated automatical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciples of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested in and exercisable by the appellant." 9.1 As per Section 253, it has not specifically been provided that appeal lies against the order passed by CIT(A) in a stay petition of the assessee because ancillary and incidental power is exercisable by the Tribunal only if appeal is pending. Useful reference can be made to the jurisdictional High Court decision in the case of Prem Prakash Tripathi (supra) in which it was held as under: "Law does not require that once the assessment is made, recovery of tax should be made immediately, notwithstanding the remedy of appeal having been provided in the Act. Rather, sub-section (6) of section 220 of the Income-tax Act, 1961, clearly provides that the assessee against whom an assessment is made, should not be treated as being in default so long as his appeal remains undisposed of if such is the intention of law, then it can hardl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevent injustice, it impliedly empowers such authority also to stay the proceedings, in order to avoid causing further mischief or injustice, during the pendency of the appeal. The powers of the appellate authority exercising powers under section 251 are as wide in their content and amplitude when compared to that of the Tribunal under section 254. Consequently, the ratio of the decision of the Supreme Court in ITO v. M. K. Mohd. Kunhi [1969] 71 ITR 815 would squarely apply. The appellate jurisdiction conferred under section 251 impliedly grants the power of doing all such acts or employing such means as are essentially necessary to its effective exercise and the statutory conferment of the appellate power carries with it the duty and obligation as well, in proper cases, to make or grant such orders for stay of the order under Challenge in appeal or staying of any or all further proceedings pursuant to the said order, pending disposal of the appeal before the appellate authority. The fact that provisions have been made under the Act to confer power upon the Income-tax Officer under section 220(6) to treat the assessee concerned as not in default, during the pendency of an appeal u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count, leaving it open to the petitioners to avail the statutory remedy of Appeal, if the petitioners so desire. The petitions are accordingly rejected. Registry to place copy of this order in all connected matters. " 12.1 From the above it would be clear that the appeal shall lie against an order made by the Tribunal in appeal. Similarly in the present case also, the appeal shall lie to the Tribunal against the order made by the CIT(A) in appeal and since the orders under challenge have been made in the stay applications filed in related appeals pending before Ld. CIT(A) at the relevant time, the appeal shall not lie against the said orders because the disposal of stay application is not a final order passed by the Learned CIT(A) in appeal filed before him u/s 246A of the Act. So this judgment of the Hon'ble Gujarat High Court is against the assessee and does not favour it. 13. Another judgment dated 06/03/2009 passed by the Hon'ble Jurisdictional High Court in the case of Lucknow Development Authority v. CIT in Writ Petition No. 2382 (M/B) of 2009 placed at page No. 95 to 97 of the assessee's compilation was also relied by the learned counsel for the assessee. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act or an application is pending under section 256(2), the Tribunal has power to grant stay in appropriate cases. Where an application under section 256(2) is pending before the High Court, the High Court has no power to grant stay in that proceeding, but the Tribunal still retains the power to grant an interim order." 16. Similarly, the Hon'ble Calcutta High Court in the case of Debasish Moulik v. Dy. CIT [1998] 231 ITR 737 has held as under: 'That the appellate authority before whom the appeal was pending had the power to grant stay of the demand in the appeal pending before him. Therefore, the petitioner should be relegated to avail of the said remedy before invoking the Jurisdiction of the High Court under article 226 of the Constitution of India." 17. From the above decision it would be clear that the power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the Learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to gran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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