Statutory time limit for disposing of a stay-related application cannot prejudice the assessee in appeal against assessment.

Failure to dispose of an application under section 146 within the prescribed time could not prejudice the assessee, because a statutory duty imposed for the assessee's benefit must operate in that party's favour. The non-disposal was therefore treated as a ground that could be raised in an appeal against the assessment under section 144 itself, and the appellate authority was competent to examine it. The text also notes that notice was sent to an address other than the declared service address, reinforcing the finding that adequate notice had not been given. On that basis, the assessment was set aside and the revenue's challenge failed.

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Issues: Whether, in an appeal against an assessment made under section 144 of the Income-tax Act, 1961, the assessee could challenge the non-disposal of an application under section 146 within the prescribed period and obtain relief on that basis.

Analysis: The prescribed period for deciding an application under section 146 meant that non-disposal could not leave the assessee in a worse position than if the application had been considered. The failure to pass an order within time was treated as enabling the assessee to agitate the question in the appeal against the assessment itself, and the appellate authority was therefore competent to examine that issue. The record also showed that notice had been sent to an address other than the assessee's declared service address, supporting the conclusion that adequate notice had not been afforded.

Conclusion: The appellate authority was justified in setting aside the assessment, and the assessee's challenge succeeded.

Final Conclusion: The assessment made under section 144 did not survive appellate scrutiny, and the revenue's appeal failed.

Ratio Decidendi: Where a statutory authority is required to decide an application within a fixed time, failure to do so cannot prejudice the person for whose benefit the duty exists, and the affected party may raise that issue in appeal against the assessment itself.

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