TMI Blog2020 (7) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... g/2017 - - - Dated:- 24-7-2020 - Shri N.V Vasudevan, Vice President And Shri B.R Baskaran, Accountant Member For the Assessee : Shri Padamchand Khincha, A.R. For the Revenue : Mt. Priyadarshini Mishra, D.R. ORDER PER B.R BASKARAN, ACCOUNTANT MEMBER : The assessee has filed this stay application seeking extension of the stay granted by the Tribunal vide its order dated 10/01/2020 in S.P No.340/Bang/2019 for assessment year 2012-13. 2. The ld counsel for the assessee submitted that the appeal had been fixed for hearing on 20/01/2020, when the earlier stay order was passed. Thereafter, the case was fixed on 18th March, 2020 and 9th June, 2020. On all the three occasions, the Revenue sought adjournment and hence the appeal has now been posted for hearing on 24/9/2020. He further submitted that there is no change in facts and further the delay in disposing the appeal is not attributable to the assessee. Accordingly he prayed that the stay granted earlier may kindly be extended. 3. On the contrary the ld DR vehemently opposed the stay petition. He submitted that the Hon ble Karnataka High Court has held in the case of CIT v. Ecom Gill Coffee Trading ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. 14. The Hon'ble Karnataka High Court in the case of CIT v. Ecom Gill Coffee Trading (P.) Ltd. [2014] 362 ITR 204/[2012] 209 Taxman 190/23 taxmann.com 235 held that as per the third proviso to Sec. 254(2A) of the Act, the total duration of the stay of demand granted by the Tribunal cannot exceeded 365 days. The Hon'ble Karnataka High Court held that the third proviso to s. 254(2A) not merely indicates that the extension of stay order cannot be beyond total number of 365 days put together, but also indicates that even assuming an order of this nature had been passed, such an order of stay shall stand vacated after the expiry of outer limit of 365 days and, in the first instance, the Tribunal which is the creature of statute should abide by these statutory provisions in letter and spirit and the introduction of the third proviso to Finance Act 2008 makes it abundantly clear that the purpose of putting the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in full 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. 16. In the case of Narang Overseas (P.) Ltd. ( supra ), the third proviso to Section 254(2A) had been read down in such a manner that even if the period of 365 days from the initial grant of stay had expired, the Tribunal could extend the stay granted, provided the delay was not attributable to the assessee. The amendment brought about by the Finance Act, 2008 sought to nullify this reading of the third proviso to Section 254(2A) of the said Act by introducing the words - 'even if the delay in disposing of the appeal is not attributable to the assessee'. 17. The learned counsel for the Assessee next submitted that the decision rendered by the Hon'ble Karnataka High Court did not deal with the constitutional validity of Sec. 254(2A) of the Act and was a decision rendered on the question of Tribunal's powers to extend stay beyond a period of 365 days after the insertion of the third proviso to Sec. 254(2A) of the Act by the Finance Act, 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Apex Court in Kusum Ingots and Alloys Ltd., what follows is that Section 10A(1) of the Act has been held to be unconstitutional being violative of Articles 14 and 21 of the Constitution. However, to save it from the vice of unconstitutionality, the expression of 'two years' has been read down to 'one year' in sub-section (1) of Section 10A of the Act. The Kerala High Court's pronouncement on the constitutionality of a provision of a Central Act would be applicable throughout India. This is made clear by Hon'ble Supreme Court in Kusum Ingots and Alloys Ltd., wherein it has been stated that an order passed on a Writ Petition questioning the constitutionality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause (2) of Article 226 of the Constitution, would have effect throughout the territory of India subject of course to the applicability of the Act. In that view of the matter, this Writ Petition would not call for any specific orders with regard to holding constitutionality or otherwise of sub-section(1) of Section 10A of the Act. Keeping in mind the pronouncement of the Division Bench of the Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in K.S. Venkataraman and Co. (P.) Ltd. v. State of Madras (1966) 60 ITR 112 (SC), that an authority created by a statute cannot question the vires of that statute or any of the provisions thereof whereunder it functions. It must act under the Act and not outside it. If it acts on the basis of a provision of the statute which is ultra vires, to that extent it would be acting outside the Act. In view of this clear pronouncement of the Supreme Court, the Tribunal in Bombay had no jurisdiction to go into the question of constitutionality of s. 140A(3) of the Act. Question then arises what is going to be the effect of a decision of the Madras High Court holding that s. 140A(3) is unconstitutional as violative of Art. 19(1)(f) of the Constitution, A similar question came up for consideration before the Supreme Court in the case of East India Commercial Co. Ltd. vs. Collector of Customs, Calcutta, AIR 1962 SC 1893, wherein it was held that an administrative Tribunal cannot ignore the law declared by the highest Court in the State. Taking into consideration the provisions of Arts. 215, 226 and 227 of the Constitution of India, it would be anomalous to suggest that a Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l decided the question, no other High Court in the country had taken a contrary view on the question of constitutionality of s. 140A(3). That being the position, it is not possible for us to take the view that the Tribunal in Bombay, when it set aside the order of penalty, went into the question of the constitutionality of that section and gave a finding that it is ultra vires following the decision of the Madras High Court. What the Tribunal really did was that in view of the law pronounced by the Madras High Court it proceeded on the footing that s. 140A(3) was non-existent and so the order of penalty passed thereunder cannot be sustained. (Emphasis supplied) 20. It was further submitted by him that in view of the above circumstances, in the light of the admitted factual position that the delay in not disposing of the appeal by the tribunal is not owing to the delay on the part of the Assessee and in the light of the fact that the tribunal has already found existence of a prima facie case, balance of convenience and relative hardship and has thought it fit to grant an order of stay, the same should be continued in the interest of justice. 21. The learned DR pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso to the extent that it lays that extension of order of stay cannot be granted beyond 365 days even if the delay in disposing of the appeal is not attributable to the assessee , has to be considered as not existing in the statute book, in a case where such default is not attributable to the Assessee. The decision referred to by the learned counsel for the Assessee clearly the support the plea raised by the learned counsel for the Assessee. 24. We are also of the view that the decision rendered in the case of Narang Overseas (P.) Ltd. ( supra ) by the Hon'ble Bombay High Court was prior to the insertion of the 3rd proviso to Sec. 254(2A) of the Act and the reference to the said decision by the Hon'ble Delhi High Court in the case of Pepsi Foods (P.) Ltd. ( supra ) is only in the context of the legal position that ought to be but for the insertion of the 3rd proviso to Sec. 254(2A) of the Act. As rightly submitted by the learned counsel for the Assessee, the existence of all conditions for grant of stay has already been considered by this Tribunal and at this stage, new conditions cannot be imposed. As rightly submitted by the learned counsel for the Assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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