1973 (10) TMI 27 - HC - Income Tax

Court quashes Tribunal order, directs reconsideration on merit.

The Court allowed the writ application, quashed the Income-tax Appellate Tribunal's order rejecting the stay application, and directed reconsideration of ... Powers Of Tribunal Issues:1. Application for quashing an order passed by the Income-tax Appellate Tribunal for staying proceedings in I.T.A. No. 743/178-5B/69-70.2. Rectification of a mistake made by the Appellate Assistant Commissioner under section 154 of the Income-tax Act.3. Appeal filed by the petitioner against the order of the Income-tax Officer for the year 1968-69.4. Rejection of the prayer for stay by the Income-tax Appellate Tribunal.5. Interpretation of the power of the Tribunal to grant stay during the pendency of an appeal.6. Error apparent on the face of the order of the Tribunal.7. Writ application challenging the rejection of the stay application by the Tribunal.Analysis:1. The petitioner filed a writ application to quash an order passed by the Income-tax Appellate Tribunal rejecting the prayer for staying the proceedings in I.T.A. No. 743/178-5B/69-70 pending before the Appellate Assistant Commissioner. The Tribunal based its decision on the lack of specific statutory provision empowering it to grant a stay during the appeal process.2. The Appellate Assistant Commissioner rectified a mistake in an earlier order by cancelling it under section 154 of the Income-tax Act. This rectification led to the petitioner filing an appeal before the Income-tax Appellate Tribunal, challenging the cancellation of the earlier order. Subsequently, the petitioner sought a stay on further proceedings before the Appellate Assistant Commissioner, which was rejected by the Tribunal.3. The appeal filed by the petitioner was based on the discrepancy in the Appellate Assistant Commissioner's order regarding the net and gross receipts of the petitioner. The Tribunal admitted the appeal for disposal but declined to grant a stay on the grounds of the absence of a specific provision in the Income-tax Act conferring such power to stay proceedings during an appeal.4. The Tribunal's rejection of the prayer for stay was challenged in the writ application, arguing that the Tribunal erred in concluding it lacked the authority to grant a stay during the pendency of the appeal. The petitioner contended that the Tribunal's power to grant stay is inherent to its appellate jurisdiction, as observed in a Supreme Court judgment.5. The legal argument revolved around the interpretation of the Tribunal's power to grant a stay during the appeal process. The petitioner relied on a Supreme Court judgment to support the contention that the Tribunal possesses the authority to grant stay as incidental or ancillary to its appellate jurisdiction, even if not explicitly provided in the statute.6. The Court found merit in the petitioner's argument, stating that the Tribunal's rejection of the stay application solely on the basis of lacking explicit statutory provision was erroneous. The Court held that the Tribunal should have considered the application on its merits rather than dismissing it outright due to perceived lack of power.7. Consequently, the Court allowed the writ application, quashed the Tribunal's order rejecting the stay application, and directed the Tribunal to reconsider the application for stay on its merits. The Court emphasized that the Tribunal's decision should be based on legal considerations and not solely on the absence of a specific statutory provision.