Case Law Details

Case Name : CIT Vs Tata Teleservices (Maharashtra) Ltd (Bombay High Court)
Appeal Number : Writ Petition (Lodg) No. 3437 of 2015
Date of Judgement/Order : 16/12/2015
Related Assessment Year : 2009-10 to 2012-13
Courts : All High Courts (1346) Bombay High Court (304)

CA Suraj R. Agrawal

Brief of the Case:-

Even in case of substituted third proviso to Section 254(2A) of the Act which restricts the power of the ITAT to grant stay beyond 365 days “even if the delay in disposing of the appeal is not attributable to the assessee” has been struck down in Pepsi Foods 376 ITR 87 (Del) as being arbitrary, unreasonable and discriminatory, the law laid down in Narang Overseas 295 ITR 22 (Bom) & Ronuk Industries 333 ITR 99 (Bom) that the ITAT has power to grant stay beyond 365 days has to be followed.

Case Summary:-

1. By the common impugned order dated 26 June 2015, the Tribunal extended the stay of the demand in respect of the appeals pending for the Assessment Years 2009-10 to 2012-13, for further period of six months or the earlier disposal of the Appeal.

2. The grievance of the petitioner with the impugned order is that in terms of the third proviso to Section 254(2A) of the Act, the Tribunal has no power under the Act to extend the stay of demand in the appeals pending before it beyond the period of 365 days.

3. Learned Counsel appearing for the Revenue submits that the view taken by this Court in “Director of Income Tax vs. M/s.Ingram Micro (India) Exports Pte.Ltd. in Income Tax Appeal (L) No.137 of 2013 rendered on 6 March 2013; “Director of Income Tax (IT) 1 Vs. M/s. St.Jude Medical Inc. in Income Tax Appeal (L) No.2121 of 2012 rendered on 1 March 2013; The Commissioner of Income Tax II, Pune Vs. PTC Software (I) Private Limited in Income Tax Appeal (L) No.1927 of 2012 rendered on 28 February 2013, decisions would require reconsideration.

4. This is for the reason that all the above decisions have essentially relied upon the decision of this Court in “Narang Overseas (P) Ltd.” (Supra) this in fact was concerned with the earlier proviso i.e. prior to the substituted third proviso to Section 254(2A) of the Act. It is, therefore, submitted that the decisions relied upon would not apply to the substituted third proviso to Section 254(2A) of the Act.

5. Court has consistently taken a view that the Tribunal has power to extend the stay even after the substituted third proviso to subsection 2A to Section 254 of the Act was introduced. This is evident from all the orders referred to in point 3 & 4 hereinabove.

6. The decision in “Narang Overseas (P) Ltd.” (Supra) was the power to grant stay or interim relief has to be read as coextensive with the power to grant final relief. The object being that in the absence of the power to grant interim relief the final relief itself may be defeated.”

7. Therefore, the ratio of the decision in “Narang Overseas (P) Ltd.” (Supra) would apply even in case of substituted third proviso to Section 254(2A) of the Act.

8. It is also pointed out that the only substantial difference in the presubstituted third proviso and substituted third proviso to Section 254(2A) of the Act is the addition of the words “even if delay in disposing of the appeal is not attributable to the assessee” These additional words added in the substituted third proviso to Section 254(2A) of the Act has been struck down by the Delhi High Court in “Pepsi Foods (P) Ltd. Vs. Asstt. Commissioner of Income Tax, (232 Taxmann 78.)”.

9. In the above view, we see no reason to entertain the petitions. Accordingly, petitions dismissed. No order as to costs.

(Author can be reached at  CASurajRA@icai.org)

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Category : Income Tax (20858)
Type : Articles (10773)