The provisions relating to appeals to the Income Tax Appellate Tribunal
(ITAT) are contained in section 252 to section 255 of the Income-tax Act. Sub-section (2A) of section 254 provides that the ITAT, where it is possible, may decide an appeal within a period of four years from the end of the financial year in which such appeal is filed.
The first proviso to this sub-section provides that the ITAT may, on merit, pass an order of stay in any proceedings relating to an appeal. However, such period of stay cannot exceed 180 days from the date of such order and the ITAT shall dispose off the appeal within this period of stay.
The second proviso to this sub-section provides that where the appeal has not been disposed off within this period and the delay in disposing the appeal is not attributable to the assessee, the ITAT can further extend the period of stay originally allowed. However, the aggregate of period originally allowed and the period so extended should not exceed 365 days. The ITAT is required to dispose off the appeal within this extended period.
The third proviso to this sub-section provides that if such appeal is not decided within the period allowed originally or the period or periods so extended or allowed, the order of stay shall stand vacated after the expiry of such period or periods.
The intention behind these provisions has been very clear that the ITAT cannot grant stay either under the original order or under any subsequent order, beyond the period of 365 days in aggregate.
To make this intention clear, section 254 of the Income-tax Act has been amended to provide that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days, even if the delay in disposing of the appeal is not attributable to the assessee.
Applicability: This amendment has been made applicable with effect from 1st October, 2008.