Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 543 - ITAT MUMBAI

2016 (10) TMI 543 - ITAT MUMBAI - TMI - Limitation period on levy of penalty u/s 271(1)(c) - Held that:- Hon’ble Madras High Court in the case of Rayala Corporation vs. UOI (2006 (4) TMI 96 - MADRAS High Court ) held that, in case where appeal against assessment order was pending before the Tribunal, then in such a situation, the limitation period on levy of penalty would be 6 months from the end of the month in which the order of the Tribunal received by the AO. The aforesaid decisions will all .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the appeal is taken on peremptorily basis. - Stay Application No. : 234/Mum/2016, Arising out of ITA 6750/Mum/2014 - Dated:- 26-8-2016 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER For The Applicant : Shri Dinesh Vyas For The Respondent : Shri T A Khan ORDER PER AMIT SHUKLA, J.M.: By way of aforesaid Stay Application, the assessee seeks for firstly, extension of stay of outstanding demand of ₹ 144,14,48,284/- which was earlier stayed by the Tribunal for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch date, Ld. CIT DR objected that, the issues in the appeal relate to international taxation, therefore, steps should be taken for transfer of appeal to designated bench, that is, L Bench. Thereafter, Hon ble Members gave direction to the Registry that the matter be placed before the Hon ble President for necessary action for transfer of appeal to the L Bench. Now, the appeal has been fixed for hearing on 5th October, 2016 before L Bench, therefore, the stay granted earlier should be extended fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. So far as the second prayer is concerned with regard to the stay of initiation of penalty proceedings u/s 271(1)(c) before the AO or passing of the penalty order pending hearing of the appeal/passing of order by the Tribunal, Mr. Dinesh Vyas, submitted that this Tribunal has wide power under the law, which includes incidental power for staying other proceedings including the penalty proceedings which are emanating from the orders impugned/appealed before the Tribunal. In support of his proposi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

all the powers incidental and necessary to make those powers fully effective. He drew our attention to the observations of their Lordships at pages 820 and 822 of the report. Following the said principle laid down by the Hon ble Supreme Court decision, the Hon ble Gujarat High Court applied the law precisely on same issue, that is, staying of the penalty proceedings u/s 271(1)© when the quantum proceedings are pending before the Tribunal. The Hon ble High Court held that when the quantum pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

The appellate jurisdiction 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. , having earl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er . 5. On the other hand, Ld. DR submitted that, when penalty order has not been passed and no appeal is pending before the Tribunal in relation to the penalty proceedings, then Tribunal has no jurisdiction in this matter and cannot stay the initiation or the passing of the penalty order. 6. We have heard the rival submissions on the second prayer made before us in the stay application for the stay of penalty proceedings u/s 271(1)(c). First of all it needs to decided, whether the Tribunal has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ooking the facts and prima facie merits of the case which is quite favourable to the assessee, penalty proceedings should be stayed till the appeal is being decided by this Tribunal or else it will lead to hardship and prejudice to the assessee, not only leading to multiplicity of proceedings but also creation of untimely huge demand on account of penalty. So far as the powers of the Tribunal are concerned, we find that the Hon ble Supreme Court in M K Mohammed Kunhi (supra) while reading down t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee as not being in default during the pendency of an appeal has been given to the Income-tax Officer only when an appeal has been presented under Section 246 which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal. There is no provision in Section 220 under which the Income-tax officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under Section 225 notwithstanding that a cer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y relief of staying recovery to the assessee but that can hardly be put at par with a statutory power as is contained in Section 220 (6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner. The argument advanced on behalf of the appellant before us that in the absence of any express provisions in Sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to both the parties to the appeal. If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s with it by necessary implication the authority to use all reasonable means to make such grant effective (Southland 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 and necessary to make the exercise of those powers fully effective. It is the duty of the judges to apply the laws, not only to wha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

llate jurisdiction. This particularly so sec. 220(6) deals expressly with a situation when an appeal is pending before the AAC, but the Act is silent in that behalf when an appeal is pending before the Tribunal. It could well be said that when s. 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ibunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions, and the stay will be granted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e question for consideration before the Hon ble High Court was as under:- Whether in a quantum appeal preferred by the assessee before the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, the Income-tax Appellate Tribunal would have any power to issue such direction and/or has any express or even implied powers to stay the penalty proceedings pending tax appeal filed by the assessee? The Hon ble High Court, decided this issue in the following manner:- Now, so far as the pow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he Tribunal under Section 254 of the IT Act. In the said decision, the Hon ble Supreme Court has observed and held as under: "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 expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee. At the same time it is significant that under Section 220 (6) the power of stay by treating the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income-tax Officer may grant time for the payment of the tax. In this manner he can probably keep on granting extensions until the disposal of the appeal by the tribunal. It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such a power on the Income-tax Officer who can give the necessary relief to an assessee. The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the appellate tribunal. Indeed the tribunal has been given very wide powers under Section 254 (1) for it may pass such orders as it thinks fit after giving full hearing to both t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nts, finally it is held that the appellate Tribunal must be held to have power to grant stay as incidental or ancillary to its appellate jurisdiction. It is further held that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ibunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. Thus, as such in the aforesaid decision, the Hon ble Supreme Court has specifically held that while exercising the powers under Section 254 of the IT Act, the Tribunal has the implied power of doing such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lary to its appellate jurisdiction conferred under section 254. It cannot be disputed that, the outcome of the decision in the quantum proceedings in the appeal filed before the Tribunal will have a direct bearing in the penalty proceedings and hence granting of stay such proceedings will not only avoid multiplicity of proceedings but also further creation of huge demand arising out of penalty order. Therefore, this Tribunal is very well within the powers to stay the penalty proceedings u/s 271( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h the stay of demand or till the passing of the order by the Tribunal in the quantum appeal, whichever is earlier. The issue of limitation under section 275 for passing of the penalty order will also not be hindrance for exercising this power, because the Hon ble Gujarat High Court has answered this aspect also in the following manner:- (ii) That with a view to avoid the multiplicity of proceedings and harassment to the assessee and considering section 275(1)(a) of the IT Act, when the CIT(A) wi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version