TMI Blog2016 (5) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, 1961 (in short, the Act ) against the order dated 12.6.2015, Annexure A.II passed by the Income Tax Appellate Tribunal, Delhi Bench 'I' Delhi (in short, the Tribunal ) in SA No.337/DEL/2015 (in ITA No.1126/DEL/2014) for the assessment year 2009-10, claiming following substantial questions of law:- 1. Whether the Hon'ble ITAT has acted in contravention of the Second Proviso of Section 254(2A) of the Income Tax Act, 1961 as the combined period of stay has exceeded 365 days? 2. Whether the order of the ITAT be treated as void ab initio in the light of third proviso to section 254(2A) of the Income Tax Act, 1961, which provides that stay of demand stands vacated after expiry of a period of 365 days even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of the Dispute Resolution Panel. Accordingly. a demand of ₹ 4,23,82,230/- was raised. Aggrieved by the order, the assessee filed appeal before the Tribunal alongwith stay application. The stay was originally granted on 6.6.2014 and further this stay was extended vide order dated 27.11.2014 upto 5.6.2015 or till the disposal of the appeal. Thus, period of 365 days of stay expired on 5.6.2015. The Tribunal vide order dated 12.6.2015, Annexure A.II further extended the stay for another period of six months or till the disposal of the appeal relying upon the judgment of the Delhi High Court in Pepsi Foods Pvt. Limited vs. ACIT and another, 2015-TIOL-1306 HC-DEL-IT. According to the appellant-revenue, the decision of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. 5. While interpreting the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), [(2014) 8 SCC 682 (SC)] we need to examine whether the present challenge to the validity of the third proviso to Section 254(2A) can be sustained. This is not a case of excessive delegation of powers and, therefore, we need not bother about the second dimension of Article 14 in its application to legislation. We are here concerned with the question of discrimination, based on an impermissible or invalid classification. It is abundantly clear that the power granted to the Tribunal to hear and entertain an appeal and to pass orders would include the ancillary power of the Tribunal to grant a stay. Of course, the exercise of that power can be subjected to certain conditions. In the present case, we find that there are several conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee renders the right of appeal granted to the assessee by the statute to be illusory for no fault on the part of the assessee. The stay, which was available to him prior to the 365 days having passed, is snatched away simply because the Tribunal has, for whatever reason, not attributable to the assessee, been unable to dispose of the appeal. Take the case of delay being caused in the disposal of the appeal on the part of the revenue. Even in that case, the stay would stand vacated on the expiry of 365 days. This is despite the fact that the stay was granted by the Tribunal, in the first instance, upon considering the prima facie merits of the case through a reasoned order. 24. Furthermore, the petitioners are correct in their submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull agreement. Consequently, we hold that, where the delay in disposing of the appeal is not attributable to the assessee, the Tribunal has the power to grant extension of stay beyond 365 days in deserving cases. The writ petitions are allowed as above. 16. The Apex Court in Commissioner of Customs Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Limited, (2005) 180 ELT 434, interpreting sub section 2A of Section 35C of the Act as introduced on 11.5.2002 had noticed as under:- 6. 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 Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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