Tribunal denies stay application, questions good faith in property transfer during recovery. Expedited appeal hearing ordered.

The Tribunal rejected the stay application, citing the assessee's failure to establish a prima facie case and the lack of balance of convenience in his favor. The Tribunal emphasized the assessee's transfer of properties during recovery proceedings as indicative of lack of good faith. Additionally, the Tribunal highlighted that the Chief CIT lacked jurisdiction in granting the stay. The Tribunal ordered an expedited out-of-turn hearing for the appeal, urging cooperation from both parties for early resolution.

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Issues Involved:
1. Stay of recovery of tax demand.
2. Adequacy of opportunity provided to the assessee to defend the case.
3. Non-supply of documents by the Revenue.
4. Balance of convenience and prima facie case.
5. Transfer of properties by the assessee during recovery proceedings.
6. Compliance with principles of natural justice.
7. Jurisdiction of Chief CIT in granting stay.

Detailed Analysis:

1. Stay of Recovery of Tax Demand:
The assessee filed a stay application seeking to halt the recovery of a tax demand amounting to Rs. 2,42,78,678. The Tribunal noted that the assessee contended the demand was wrongful and illegal, and that the Revenue's insistence on payment led to the present application for stay.

2. Adequacy of Opportunity Provided to the Assessee to Defend the Case:
The Tribunal observed that the assessee was given multiple opportunities to file the return and provide necessary documents. Despite various adjournments and notices, the assessee did not comply, leading the AO to declare the return invalid and proceed under Section 144. The Tribunal concluded that the assessee was granted sufficient opportunity to defend his case but failed to utilize it.

3. Non-Supply of Documents by the Revenue:
The assessee argued that the non-supply of seized documents and computers by the Revenue prevented him from making a proper representation. The Tribunal found this claim to be an afterthought, stating that the AO's order clearly recorded that the documents were available and the assessee was given ample opportunity to collect them. The Tribunal noted that the assessee did not raise this issue before the CIT(A) and did not file any affidavit contradicting the AO's observations.

4. Balance of Convenience and Prima Facie Case:
The Tribunal evaluated whether the assessee had a prima facie case and if the balance of convenience was in his favor. It concluded that the assessee failed to establish a prima facie case, as the claim of non-supply of documents was not substantiated. Furthermore, the balance of convenience was not in favor of the assessee, as the assessee had transferred properties during the pendency of recovery proceedings, indicating a lack of good faith.

5. Transfer of Properties by the Assessee During Recovery Proceedings:
The Tribunal noted that the assessee had transferred properties despite assurances to the contrary. This transfer was seen as an attempt to evade tax recovery, further weakening the assessee's case. The Tribunal emphasized that such actions indicated a lack of balance of convenience in favor of the assessee.

6. Compliance with Principles of Natural Justice:
The assessee claimed that the proceedings were contrary to the principles of natural justice due to the non-supply of documents. The Tribunal rejected this argument, stating that the assessee was given sufficient opportunity to collect the documents, and the claim of non-supply was not raised at the appropriate stages of the proceedings.

7. Jurisdiction of Chief CIT in Granting Stay:
The Tribunal addressed the issue of the Chief CIT granting a stay on the grounds of non-supply of documents. The Revenue argued that the Chief CIT who granted the stay did not have jurisdiction over the assessee's case. The Tribunal agreed with the Revenue, noting that the stay order was passed without verifying the facts from the AO and was therefore not binding.

Conclusion:
The Tribunal rejected the stay application, concluding that the assessee failed to establish a prima facie case, the balance of convenience was not in his favor, and there was no irreparable loss. The Tribunal also ordered an out-of-turn hearing for the appeal to expedite the resolution of the matter, emphasizing the need for both parties to cooperate in the early disposal of the appeal.

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