2014 (4) TMI 1054 - AT - Income Tax

Appeals dismissed for lack of pending appeal on quantum.

The Tribunal held that appeals against the CIT(A)'s stay order are not maintainable without a pending appeal on the quantum. Consequently, the appeals by ... Stay or recovery of demand during the pendency of assessee's appeal - Jurisdiction of CIT(A) - whether in the absence of any appeal, the Tribunal has any jurisdiction to entertain the appeal of the assessee against the order passed by Ld. CIT(A) on the application of the assessee for stay of recovery of demand when the appeal was pending before the first appellate authority but no appeal was pending before the Tribunal? - Held that:- The power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the Learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to grant stay. However, no appeal is pending before the Tribunal and there is no specific express power with the Tribunal to entertain and dispose of such appeals, so the Tribunal cannot grant the stay of collection of tax by entertaining the appeals against orders of Ld. CIT(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the Learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction. Thus appeal filed by the assessee against the order of Ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable - Decided against assessee. Issues Involved:1. Jurisdiction of CIT(A) to decide the assessee's petition for stay of recovery of demand during the pendency of the appeal.2. Provisions of law under which CIT(A) can pass such an order for stay of recovery.3. Appealability of CIT(A)'s order on stay of recovery before the Tribunal.4. Tribunal's jurisdiction to entertain appeal against CIT(A)'s stay order without a pending appeal on the quantum before the Tribunal.Issue-wise Detailed Analysis:1. Jurisdiction of CIT(A) to Decide Stay Petition:The Tribunal examined whether the CIT(A) has the jurisdiction to decide the assessee's petition for stay of recovery of demand during the pendency of the appeal. The Tribunal affirmed that the CIT(A) does possess the power to grant stay as it is incidental or ancillary to its appellate jurisdiction, as supported by the Hon'ble Allahabad High Court's decision in Prem Prakash Tripathi v. CIT [1994] 208 ITR 461, which states that the appellate authority is competent to grant stay orders.2. Provisions of Law for Passing Stay Order by CIT(A):The Tribunal discussed under which provisions of law the CIT(A) can pass an order for stay of recovery. It was noted that while Section 250 of the Income Tax Act, 1961, provides for the procedure in appeal, it does not explicitly mention the power to stay recovery. However, it was inferred that the power to grant stay is implied as an ancillary power necessary for the effective exercise of appellate jurisdiction. This view aligns with the Supreme Court's decision in ITO v. M.K. Mohd. Kunhi [1969] 71 ITR 815, which recognized the inherent power of appellate authorities to grant stay.3. Appealability of CIT(A)'s Stay Order Before the Tribunal:The Tribunal deliberated whether the order passed by CIT(A) on a stay petition is appealable before the Tribunal under Section 253 of the Income Tax Act. It concluded that such orders are not appealable before the Tribunal. The Tribunal emphasized that the right to appeal is a statutory right and must be explicitly provided by the statute. Since Section 253 does not specifically provide for an appeal against a stay order by CIT(A), such orders cannot be challenged before the Tribunal. This conclusion was supported by the Hon'ble Gujarat High Court's decision in Dy. CIT v. Nirma Ltd., which stated that an appeal shall lie against an order made by the Tribunal in appeal, not against interlocutory orders like stay orders.4. Tribunal's Jurisdiction to Entertain Appeal Without Pending Quantum Appeal:The Tribunal addressed whether it can entertain an appeal against CIT(A)'s stay order without a pending appeal on the quantum before it. The Tribunal held that it cannot entertain such appeals. It reiterated that the power to grant stay is ancillary to the appellate jurisdiction, which means the Tribunal can only exercise such power when an appeal on the quantum is pending before it. This principle was reinforced by the Hon'ble Calcutta High Court in Debasish Moulik v. Dy. CIT [1998] 231 ITR 737, which held that the appellate authority has the power to grant stay only when an appeal is pending before it.Conclusion:The Tribunal concluded that the appeals filed by the assessee against the order of CIT(A) on stay petitions are not maintainable. Consequently, such appeals cannot be admitted and are liable to be dismissed. The Tribunal also dismissed the cross objections filed by the Revenue as they were rendered non-maintainable due to the dismissal of the assessee's appeals.Final Order:The appeals of the assessee and the cross objections of the Revenue were dismissed as non-maintainable.