2015 (3) TMI 762 - HC - Income Tax

Tribunal Exceeded Stay Period Authority, Court Grants Balance Amount Stay Pending Final Decision

The High Court held that the Tribunal exceeded its authority by extending the stay period beyond 365 days. Despite this, the Court granted the ... Grant of stay of recovery of the balance amount in respect of the assessment year 2009-10 till the disposal of the appeal by the Tribunal - Held that:- It is settled law that there is no bar for grant of such a relief if the Court is of the opinion that the circumstances and the ends of justice so warrant. This has also been stated clearly in Maruti Suzuki (2014 (2) TMI 1037 - DELHI HIGH COURT ). Since the petitioner had already been granted unconditional stay by the Tribunal in respect of the said appeal and that the Tribunal is in the midst of hearing the appeal, it would be in the interest of justice that the stay order granted by the Tribunal is continued till the disposal of the appeal by the Tribunal. It is ordered accordingly. The writ petition stands disposed of. Issues:1. Extension of stay beyond 365 days by the Tribunal.2. Seeking stay of recovery of balance amount till appeal disposal.3. Grant of relief under Article 226 of the Constitution.Analysis:1. The judgment involves a situation where the Tribunal had initially granted unconditional stay of demand to the petitioner in an appeal filed before the Income Tax Appellate Tribunal. However, a subsequent order was passed by the Tribunal extending the interim stay beyond the permissible period of 365 days. Citing a precedent from a Division Bench decision, it was clarified that the Tribunal lacked the authority to extend the stay period beyond 365 days. As the petitioner's appeal was pending and could not be heard due to reasons not attributable to the petitioner, the petitioner approached the High Court seeking a stay of recovery of the balance amount for the assessment year 2009-10 until the appeal's disposal by the Tribunal.2. The petitioner relied on previous orders of the High Court where stays were extended till the disposal of appeals by the Tribunal under Article 226 of the Constitution. The High Court acknowledged the settled law that allows for such relief if deemed necessary for the interests of justice. Considering that the Tribunal had already granted unconditional stay and was actively hearing the appeal, the High Court found it appropriate to continue the stay order granted by the Tribunal until the appeal's final disposal. Consequently, the High Court disposed of the writ petition in favor of the petitioner, allowing the stay of recovery of the balance amount until the Tribunal's decision.3. The judgment highlights the significance of adherence to statutory limits on stay extensions by the Tribunal and the High Court's discretionary power under Article 226 to grant relief in appropriate circumstances to ensure justice. It underscores the importance of balancing legal provisions with equitable considerations to safeguard the rights of parties involved in legal proceedings, especially concerning financial liabilities and appeals before specialized tribunals like the Income Tax Appellate Tribunal. The decision showcases the judiciary's role in upholding procedural fairness and protecting litigants' interests within the framework of established legal principles and constitutional provisions.