Allahabad H.C : Appeal would be finally disposed of by Tribunal, order of stay granted by Tribunal would continue to operate particularly when delay was not attributable to assessee

High Court Of Allahabad

Adobe Systems India (P.) Ltd. vs. JCIT

Section 254

Dr. Dhananjaya Yeshwant Chandrachud, CJ. And Dilip Gupta, J.

Writ Tax No. 285 Of 2014

May 5, 2014

JUDGMENT

1. An order of assessment was passed against the petitioner under section 143(3) and section 144C of the Income-tax Act, 1961, making a total addition of Rs. 25.89 crores. The petitioner went in appeal before the Income-tax Appellate Tribunal. The Tribunal, by an interim order dated January 8, 2013, allowed the application for stay for a period of 180 days or till the disposal of the appeal, whichever is earlier, subject to the deposit of an amount of Rs. 2 crores. The petitioner complied with the order of deposit. The appeal was listed before the Tribunal but was adjourned on January 30, 2013, April 8, 2013, April 17, 2013, and June 12, 2013. The petitioner applied for extension of stay. The Tribunal, by its order dated July 5, 2013, extended the stay for a further period of six months or till the disposal of the appeal, whichever is earlier. Thereafter, the appeal was heard on September 24, 25, 2013, and the judgment was reserved. On January 28, 2014, the Tribunal granted a further extension of stay for a period of 90 days which expired on April 28, 2014. The Tribunal duly noticed that the petitioner has not contributed to the delay in the disposal of the appeal. Thereafter, the appeal was refixed for hearing and was eventually heard on March 28, 2014.

2. These proceedings have been instituted for an extension of the period of stay since, in view of section 254(2A) of the Income-tax Act, 1961, the Tribunal would not have the power to extend the stay in view of the judgment of the Delhi High Court in CIT v. Maruti Suzuki (India) Ltd. [2014] 44 taxmann.com 166 (Delhi). While construing the provisions of section 254(2A), the Delhi High Court held as follows (page 230) :

“(i) In view of the third proviso to section 254(2A) of the Act substituted by the Finance Act, 2008, with effect from October 1, 2008, the Tribunal cannot extend stay beyond the period of 365 days from the date of first order of stay.

(ii) In case default and delay is due to lapse on the part of the Revenue, the Tribunal is at liberty to conclude hearing and decide the appeal, if there is likelihood that the third proviso to section 254(2A) would come into operation.

(iii) The third proviso to section 254(2A) does not bar or prohibit the Revenue or the Departmental representative from making a statement that they would not take coercive steps to recover the impugned demand and on such statement being made, it will be open to the Tribunal to adjourn the matter at the request of the Revenue.

(iv) An assessee can file a writ petition in the High Court pleading and asking for stay and the High Court has power and jurisdiction to grant stay and issue directions to the Tribunal as may be required. Section 254(2A) does not prohibit/bar the High Court from issuing appropriate directions, including granting stay of recovery.”

3. In the facts of the present case, several circumstances must necessarily be kept in the balance. Firstly, the petitioner had duly applied for an interim stay which was granted by the Tribunal subject to an order of deposit of Rs. 2 crores which amount has been deposited. Secondly, as the order passed by the Tribunal on January 28, 2014, would indicate, non-disposal of the appeal has not been occasioned by any default on the part of the petitioner. Thirdly, the Tribunal had finally heard the appeal in September, 2013, after which the appeal was placed for rehearing and was finally heard on March 28, 2014, when the judgment was reserved.

4. Having regard to these facts and circumstances of the case and in the exercise of our writ jurisdiction under article 226 of the Constitution, we are of the view that it will be appropriate to direct and, accordingly, order that until the appeal is finally disposed of by the Tribunal, the order of stay granted by the Tribunal shall continue to operate. However, since the Tribunal has already heard the appeal finally and the judgment has been reserved, we would request the Tribunal to dispose of the appeal expeditiously and preferably within a period of three months from the receipt of a certified copy of this order.

5. The writ petition is, accordingly, disposed of. There shall be no orders as to costs.

[Citation : 365 ITR 376]