2019 (5) TMI 1523 - HC - Income Tax

Court upholds ITAT order extending demand stay, citing precedent. Issue settled, no substantial question.

The Principal Commissioner of Income Tax, Gurgaon Versus Carrier Air-conditioning and Refrigeration Ltd.

The Court dismissed the appeal challenging the extension of stay of demand beyond 365 days by the Income Tax Appellate Tribunal (ITAT) and the validity of ... Stay of demand - extension of the stay beyond 365 days - Whether the Hon'ble ITAT has acted in contravention of the Second Proviso of Section 254(2A) of the Income Tax Act, 1961, as the combined period of stay has been exceeded 365 days? - delay in disposal of appeal? - HELD THAT:- It is not disputed by revenue that the matter in issue is no longer res integra and stands concluded by the decision of this Court in M/S CARRIER AIR CONDITIONING AND REFRIGERATION LIMITED [2016 (5) TMI 396 - PUNJAB AND HARYANA HIGH COURT] as held wherever the appeal could not be decided by the Tribunal due to pressure of pendency of cases and the delay in disposal of the appeal is not attributable to the assessee in any manner, the interim protection can continue beyond 365 days in deserving cases - No substantial question of law. Issues:1. Extension of stay of demand by the Tribunal beyond 365 days.2. Whether the order of the ITAT should be treated as voidab-initio due to the Third Proviso to Section 254 (2A) of the Income Tax Act, 1961.Issue 1: Extension of Stay of Demand Beyond 365 DaysThe appeal was filed by the revenue under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal (ITAT) extending the stay of demand beyond 365 days. The Tribunal had granted multiple extensions of stay over the course of several years, which the revenue contended was impermissible under the law. The revenue argued that the combined period of stay had exceeded 365 days, which was in contravention of the Second Proviso of Section 254(2A) of the Income Tax Act, 1961. The Tribunal had granted successive extensions of stay, with the final extension being ordered till the disposal of the appeal. The revenue challenged this extension, leading to the present appeal.Issue 2: Validity of the ITAT OrderThe second substantial question of law raised in the appeal was whether the order of the ITAT should be treated as voidab-initio in light of the Third Proviso to Section 254 (2A) of the Income Tax Act, 1961. This provision states that the stay of demand stands vacated after the expiry of 365 days, even if the delay in the appeal's disposal is not attributable to the assessee. The revenue contended that the order of the ITAT should be considered void from the beginning due to this provision, as the stay of demand had exceeded the permissible period. The ITAT had granted multiple extensions of stay, and the revenue argued that the order should not have been upheld due to the violation of the statutory provision.In the judgment, the Court noted that the matter in issue had already been settled in a previous decision of the Court, where an identical question was held not to be a substantial question of law. The Court referred to a specific case, ITA-5-2016 decided on 25.4.2016, where the Court had reached a conclusion on a similar issue. Based on the precedent set in the aforementioned case, the Court dismissed the present appeal. The judgment highlighted that the matter was no longer open for debate as it had been conclusively addressed in a prior ruling, leading to the dismissal of the appeal.