TMI Blog1968 (9) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... re imposed under section 271(1)(c) read with section 274(2) of the Act for concealment of particulars of income and furnishing inaccurate particulars. The assessee preferred appeals to the Income-tax Appellate Tribunal and made an interim prayer for stay of collection of the penalties imposed. The Tribunal declined to order any stay holding that it had no power to grant such a prayer. The assessee then moved the High Court under article 226 of the Constitution. The High Court held that the Tribunal had the power to stay the proceedings as also the collection of the penalties pending the appeal since that power was incidental and ancillary to its appellate jurisdiction. The Tribunal was consequently directed to dispose of the stay application in accordance with law. The relevant provisions of the Act may be first noticed. Section 156 provides that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income-tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Under section 220(1) any amount specified in the notice of demand under section 156 has to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall hold their sittings. (6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code (XLV of 1860) and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (V of 1898)." Section 131 may at this stage be referred to. It gives to the Income-tax Officer, the Appellate Assistant Commissioner and the Commissioner the same powers as are vested in the court under the Code of Civil Procedure when trying a suit in respect of the matters specified in the section. But these powers relate to discovery and inspection, enforcing the attendance of witnesses, compelling production of books of account, etc., issuing commissions and allied matters. There can be no manner of doubt that by the provisions of the Act or the Income-tax Appellate Tribunal Rules, 1963, powers have not been e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and if the Appellate Tribunal is entirely helpless in the matter of stay of recovery, the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland's Statutory Construction, third edition, articles 5401 and 5402). The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner in pursuance of that order. It was said that the general principle was that in a taxing statute there was no room for what could be called the equitable construction, but that principle applied only to the taxing part of the statute and not to the procedural part. It has further been observed that "where the legislature invests an Appellate Tribunal with powers to prevent an injustice, it impliedly empowers it to stay the proceedings which may result in causing further mischief. " It is well known that the Income-tax Appellate Tribunal is not a court but it exercises judicial powers. The Tribunal's powers in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code : see Commissioner of Income-tax v. Hazarimal Nagji and Co. and New India Assurance Co. Ltd. v. Commissioner of Income-tax Excess Profits Tax. In Polini v. Gray this is what Jessel M.R. said about the powers of the Court of Appeal to grant stay at page 443 : " It appears to me on principle that the court ought to possess that jurisdiction, because the principle which underlies all orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, Pollisetti Narayana Rao v. Commissioner of Income-tax the same High Court held that stay could be granted by it pending reference of a case by the Appellate Tribunal to the High Court. This power the High Court had under section 151 of the Civil Procedure Code and under article 227 of the Constitution. The High Court, in the present case, referred to a passage from Halsbury's Laws of England, third edition, volume 20, page 705, where it is stated that "no tax is payable while the assessment is the subject-matter of an appeal, except such part of the tax assessed as appears to the Commissioners seized of the appeal not to be in dispute." This statement is apparently based on the provisions of the English statutes and it is not possible to derive any assistance from it. Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly when section 220(6) deals expressly with a situation when an appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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