2016 (3) TMI 1471 - HC - Income Tax

Revenue's Petition Dismissed: Tribunal Can Extend Tax Stay Beyond 365 Days; Court Cites Legal Precedents.

Principal Commissioner of Income Tax – 8 Versus Income Tax Appellate Tribunal “B” Bench, & Another

The HC of Bombay dismissed the Revenue's petitions challenging the Tribunal's orders that extended the stay on recovery of disputed demand beyond 365 days ... Extension of stay on recovery by Tribunal - stay being in excess of 365 days - validity of stay on disputed demand granted earlier in respect of the appeals pending before it in exercise of power u/s 254(2A) - grievance of the Revenue is that it is without jurisdiction as the extension of the stay results in stay being in excess of 365 days, therefore, in clear breach of the third proviso to Section 254(2A) - HELD THAT:- The stay granted by the impugned orders is for a period of six months from its date i.e. 17th July, 2015 and 11th September, 2015. Thus, in the present facts, the impugned orders have exhausted its life and are no longer in force. Thus, the challenge to the impugned order is purely academic. Therefore, we see no reason to entertain the Petitions. The issue as mentioned herein above, is no longer res integra so far as this Court is concerned in view of the decision of this Court in CIT v/s. Tata Teleservices (Maharashtra) Ltd. [2015 (12) TMI 1507 - BOMBAY HIGH COURT], wherein this Court following the earlier decision of this Court in Narang Overseas (P) Ltd. v/s. ITAT [2007 (7) TMI 5 - BOMBAY HIGH COURT] and CIT v/s. Ronak Industries [2010 (11) TMI 461 - BOMBAY HIGH COURT] held that even after substitution of the third proviso to Section 254(2A) of the Act, the Tribunal would have power to extend the stay beyond a period of 365 days as provided therein. Petition dismissed. Issues:1. Jurisdiction of the Tribunal to extend stay on recovery of disputed demand beyond 365 days under Section 254(2A) of the Income Tax Act, 1961.Analysis:The High Court of Bombay heard two Petitions under Article 226 of the Constitution of India where the Revenue challenged orders passed by the Income Tax Appellate Tribunal (the Tribunal) extending the stay on recovery of disputed demand beyond 365 days. The Revenue contended that such extension was without jurisdiction and in violation of the third proviso to Section 254(2A) of the Act. The impugned orders were for a period of six months from their respective dates, which had already expired by the time of the hearing. The Court deemed the challenge to the orders as academic due to their expiration, leading to the dismissal of the Petitions.The Court acknowledged that the issue of extending stay beyond 365 days was settled law based on previous decisions. Citing the case of CIT v/s. Tata Teleservices (Maharashtra) Ltd., the Court held that even after the substitution of the third proviso to Section 254(2A) of the Act, the Tribunal retained the authority to extend the stay beyond the stipulated 365 days. The Court referred to earlier decisions in Narang Overseas (P) Ltd. v/s. ITAT and CIT v/s. Ronak Industries to support this interpretation. Consequently, the Court dismissed both Petitions, emphasizing that the Tribunal possessed the power to extend the stay period beyond 365 days as per the law.In conclusion, the High Court of Bombay upheld the Tribunal's authority to extend the stay on recovery of disputed demand beyond 365 days under Section 254(2A) of the Income Tax Act, 1961. The Court relied on established legal precedents to support its decision and dismissed the Revenue's challenge, emphasizing that the Tribunal's actions were within the scope of its jurisdiction.