Tribunal Power to grant stay is confined only to appellate order

Brief of the Case

The Hon’ble (P&H) High Court in the case of Pr.C.I.T. vs ITAT Delhi Bench, New Delhi and anothers while dealing with the scope of power of Tribunal for grant of stay against the prosecution proceedings held that once it is accepted that proceedings for prosecution are independent of assessment and penalty, and the Tribunal is neither the appellate nor the revisional authority in a case where prosecution is launched, the mere fact that the decision in the appeal may have an impact on the prosecution, in our considered opinion, cannot be used to read into the expressions “pass such orders thereon as it thinks fit” or “any proceedings relating to an appeal”, a power in the Tribunal to direct that prosecution or a show cause notice shall be kept in abeyance.

Fact of the Case

In the present case, the Commissioner of Income Tax while exercising its power under Section 263 of the Act partly set aside the assessment order passed under section 143(3) pertaining to A.Y. 2008-09 in the case of M/s Jindal Steel & Power Ltd., respondent no.2 and restored the assessment to the file of the Assessing Officer for a fresh assessment. After re-assessment, the assessee filed an appeal against the fresh assessment before the CIT, Rohtak, which was dismissed on 10.03.2014. The Assessing Officer had also initiated penalty proceedings under Section 271(1)(c) of the Act and eventually passed an order dated 28.11.2013, imposing penalty. The assessee challenged the order imposing penalty before the CIT(Appeals), Rohtak, which was also dismissed. The assessee, thereafter, filed two appeals, one being the quantum appeal and the other against the penalty. Thus, three appeals, one against the order passed under Section 263, the second against the assessment order and the third against the levy of penalty, were filed, were pending before the Income Tax Appellate Tribunal, when the revenue served a notice dated 26.12.2014, calling upon the assessee to show cause, why prosecution be not initiated, under Section 276C(1). The assessee did not file a reply but instead filed an application in the appeal challenging the imposition of penalty before the Income Tax Appellate Tribunal for stay of prosecution. The Tribunal granted stay against initiation of prosecution which was now been opposed by the Revenue considering it as without jurisdiction.

Contention of Petitioner

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