2021 (10) TMI 287 - HC - Income Tax

Judge stays Revisional Order for 12 weeks, allowing appeal before ITAT. Petitioner can expedite disposal.

Cognizant Technology Solutions India Pvt., Ltd. Versus The Income Tax Appellate Tribunal -'B' Bench, Chennai, The Assistant Commissioner of Income Tax, Central Circle 1 (1), Chennai, Commissioner of Income Tax, Chennai

The judge directed that the Revisional Order be kept in abeyance for twelve weeks, allowing the appeal before ITAT to proceed. The petitioner was granted ... Stay of the order passed u/s 263 though there is no active demand of tax - Power of ITAT power to grant stay - Future demand - CIT issued directions to the AO - Whether the Revision order is qua a demand - whether the writ petitioner should have moved ITAT for stay? - HELD THAT:- A careful perusal of Section 253(7) makes it clear that power of ITAT to grant stay is qua a demand. In the instant case, there is no disputation or disagreement that there is no demand. Therefore, if 253(7) is invoked the question as to whether ITAT can stay the Revisional order becomes a matter of debate. In the instant case, I deem it appropriate to leave this debate open. There is a specific provision namely sub-section (7) of Section 253 read with proviso to Sub-Section 2A of Section 254, the scenario or the obtaining legal position is completely different. This Court is also informed that this proposition/principle i.e., proposition that 'absent demand an appellant cannot move a stay petition under Section 253(7) before ITAT' is not blessed with authorities. As it involves a larger debate and in the light of the limited prayer that is sought for, I deem it appropriate to leave this question open and dispose of captioned writ petition and WMP therein by making the following order: a) Revisional order being order dated 01.08.2019 made by third respondent will be kept in abeyance or in other words all further proceedings pursuant to this Revisional order will remain stayed for a period of twelve (12) weeks from today i.e., upto 15.12.2021; b) It is open to the writ petitioner to move ITAT for expeditious disposal of appeal before ITAT filed being Appeal No. IT- 2820/CHNY-2019 filed on 03.10.2019; c) Though obvious, it is made clear that this Court has not expressed any view or opinion on the merits of the matter as the ITAT is in seizin of the matter and it is, at the moment, the domain of the Tribunal. d) This Court has left open the question of incidental and ancillary powers of Tribunal to grant stay in the light of specific provisions namely Section 253(7) and 254(2A) proviso of IT Act. Issues:Challenge to order under Section 263 of IT Act, Appeal before ITAT, Stay petition before ITAT, Interpretation of Section 253(7) of IT Act, Applicability of precedent, Granting of stay on Revisional order.Analysis:1. The petitioner challenged an order dated 01.08.2019 made under Section 263 of the IT Act before the ITAT, pertaining to the Assessment Year 2014-2015. The petitioner sought to keep the Revisional Order in abeyance to allow the appeal before ITAT to proceed.2. The petitioner's case involved the buyback of shares under Section 77A of the Companies Act, with the AO concluding a Nil tax liability for the petitioner regarding dividend distribution taxes. The third respondent issued a notice under Section 263, which was challenged in court, leading to the current appeal before ITAT.3. The main contention revolved around whether the petitioner should have filed a stay petition before ITAT. The Revenue counsel argued that without filing a stay petition, the petitioner could not seek the limited prayer to keep the Revisional Order in abeyance.4. The judge analyzed the provisions of Section 253(7) of the IT Act, which grants ITAT the power to grant a stay of demand. However, since there was no demand in this case, the question of whether ITAT could stay the Revisional Order became a matter of debate.5. Referring to a precedent from 1969, the judge noted that the legal landscape had changed with the introduction of specific provisions like Section 253(7) and the proviso to Section 254(2A). The judge decided to leave the debate on whether ITAT could stay the Revisional Order open due to the evolving legal framework.6. The judge ultimately directed that the Revisional Order be kept in abeyance for twelve weeks, allowing the appeal before ITAT to proceed. The petitioner was permitted to move ITAT for an expeditious disposal of the appeal. The judge clarified that no opinion on the merits was expressed as ITAT was handling the matter.7. The judgment concluded by leaving open the question of ITAT's incidental and ancillary powers to grant stay, considering the specific provisions of the IT Act. The writ petition and the Writ Miscellaneous Petition were disposed of with no order as to costs.