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Income Tax Officer Versus Anil Girishbhai Darji

2016 (4) TMI 253 - GUJARAT HIGH COURT

Extension stay of demand in favour of the assessee beyond the period prescribed under the third proviso to subsection (2A) of section 254 - Held that:- Extension of stay of the demand beyond the total period of 365 days from the date of grant of initial stay would always be subject to subjective satisfaction of the Tribunal; on an application made by the petitioner to extend the stay; and on being satisfied that the delay in disposing of the appeal within a period of 365 days from the date of gr .....

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ies of the record and proceedings of the Tribunal to further point out that the appeals have not yet been heard as the Departmental Representative had prayed for an adjournment because the necessary case papers were not available to submit that even further delay is not attributable to the assessee.

Applying the decision of this court in the case of Deputy Commissioner of Income Tax v. Vodafone Essar Gujarat Ltd. (2015 (7) TMI 15 - GUJARAT HIGH COURT), to the facts of the present case .....

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of the Constitution of India are directed against the common order dated 18.09.2015 passed by the Income Tax Appellate Tribunal, Ahmedabad in SA No.97/Ahd/2015, SA No. 98/Ahd/2015 and SA No.99/Ahd/2015 filed in the respective appeals for the assessment years 2007-08, 2008-09 and 2010- 11 respectively, whereby the Tribunal has extended the stay of demands in favour of the respondent - assessee beyond a period of 365 days. 2. Since all these petitions arise out of a common order of the Tribunal, .....

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ed to as the Act ) on 28.12.2011 assessing the total income of the assessee at ₹ 57,58,111/- as against the returned income. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals), who by order dated 19.04.2013, confirmed the demand. Being aggrieved, the assessee carried the matter in further appeal before the Tribunal in ITA (SS) A No.258/Ahd/2013. The assessee also preferred Stay Petition No.64/Ahd/2014 in the said tax appeal before the Tribunal. In the .....

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d make payment of ₹ 50,000/- every month till the disposal of assessee s appeals in IT (SS) A No.258, 259 and 260/Ahd/2013 for assessment years 2007-08, 2008-09 and 2010-11 respectively, or the expiry of six months from the date of the order, whichever is earlier. In terms of the said order, the stay was limited till the disposal of the assessee s appeals or the expiry of six months from the date of the order, whichever was earlier. Since the appeals were not decided within such period, th .....

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the assessee, after the expiry of six months, moved stay applications for the third time being SA No.97, 98 and 99/Ahd/2015 seeking further extension of the stay of demand. By the impugned order dated 18.09.2015, the Tribunal extended the stay of demand in favour of the assessee subject to payment of ₹ 50,000/- per month (as stipulated in its earlier order) till the disposal of appeal or the expiry of six months, whichever is earlier. Being aggrieved, the petitioner filed the present peti .....

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d vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. It was submitted that in view of the clear language of the third proviso to sub-section (2A) of section 254 of the Act, in case the appeal is not heard within 365 days, it is not permissible for the Tribunal to extend the stay after the expiry of such period even if the delay is not attributable to the assessee. It was submitted that the impugned order passed by .....

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Mr. S. N. Divatia, learned advocate for the respondent - assessee submitted that the controversy involved in the present case is no longer res integra, inasmuch as, the same stands concluded by a decision of this court in the case of Deputy Commissioner of Income Tax v. Vodafone Essar Gujarat Ltd., 376 ITR 23 (Guj.), wherein the court has, while interpreting the provisions of subsection (2A) of section 254 of the Act, held that it is true that as per the third proviso to section 254(2A) of the .....

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be very clear. However, the purpose and object of providing such time limit is required to be considered. The purpose and object of providing time limit as provided in section 254(2A) of the Act seems to be that after obtaining stay order, the assessee may not indulge in delaying tactics and misuse the grant of stay of demand. At the same time, a duty is also cast upon the Tribunal to decide and dispose of such appeals in which there is a stay of demand, as early as possible and within the peri .....

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he Tribunal and within the stipulated time mentioned therein and all efforts should be made by the Tribunal to see that in case where there is stay of demand, such appeals are heard, decided and disposed of at the earliest and that the stay is not extended mechanically. The court, accordingly, held that the Tribunal has power to extend the stay of demand beyond a period of 365 days; however, the extension of stay beyond a period of total 365 days from the date of grant of initial stay would alwa .....

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and as directed by it and further that the appeal of the assessee had not been disposed of and the non-disposal of appeal is not attributable to the assessee. It was submitted that, therefore, the Tribunal has duly applied its mind to the facts of the present case and has found that the delay in deciding the appeal is not attributable to the assessee. Under the circumstances, this case is squarely covered by the above decision of this court and hence, there is no warrant for interference. 5.1 Re .....

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in the context of similarly worded provisions of section 35C (2A) of the Central Excise Act, 1944, has held that the sub-section which was introduced in terrorem cannot be construed as punishing the assessees for matters which may be completely beyond their control. For example, many of the Tribunals are not constituted and it is not possible for such Tribunals to dispose of matters. Occasionally by reason of other administrative exigencies for which the assessee cannot be held liable, the stay .....

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ble to the assessee. 5.2 Reference was made to the affidavit-in-reply filed by the respondent and more particularly, to the order sheet of the Tribunal at page 31 of the case papers, wherein the Tribunal has noted that the assessee had requested for inspection of the case files, assessment records and certified copies of necessary documents and that the learned CIT DR had no objection if the same was permitted. It was pointed out that on 26.02.2016, the matter was adjourned at the request of the .....

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ons and that the operation of the impugned order would come to an end on 19.03.2016 and that the respondent - assessee would be required to move another application for extension of the stay. It was, accordingly, urged that appropriate directions be issued to the Tribunal to dispose of the appeals as expeditiously as possible. 6. In rejoinder, Mr. Varun Patel invited the attention of the court to an order dated 11.01.2016 passed by the Supreme Court in the Petition for Special Leave to Appeal fi .....

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od prescribed under the third proviso to subsection (2A) of section 254 of the Act. While, from the language of the third proviso to sub-section (2A) of section 254 of the Act, it appears that the Tribunal has no power to extend the stay beyond a period of 365 days from the date when the initial stay was granted, this court in Deputy Commissioner of Income Tax v. Vodafone Essar Gujarat Ltd. (supra) wherein a similar controversy was involved, for the reasons detailed to paragraph 5 above, has hel .....

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