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

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 the ITAT order under the Income Tax Act, 1961. The Court relied on a previous decision where a similar issue was held not to be a substantial question of law, concluding that the matter had been conclusively settled. The appeal was dismissed based on the precedent set in the prior ruling, indicating that the issue was no longer open for debate.

---

---

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 Days
The 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 Order
The 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.

---