Tribunal's Power to Stay Recovery Proceedings and Specify Mode of Recovery |

The Tribunal has inherent power to stay demand and specify the mode of recovery, such as granting instalments, during the pendency of an appeal. The Supreme Court clarified that the Tribunal's wide powers under section 254 of the Income-tax Act include the authority to stay recovery proceedings to prevent appeals from becoming ineffective. The Tribunal's discretion in granting stay should consider the appellant's circumstances and public interest, as highlighted in various legal precedents. The Commissioner's reference application was rejected for lack of merit, as the issue was not raised during the original proceedings before the Tribunal.

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Issues:
1. Whether the Tribunal has inherent power to stay the demand and specify the mode of recovery like granting instalmentsRs.

Analysis:
The case involved an appeal by the assessee for the assessment year 1985-86, requesting a stay of demand and interest during the pendency of the appeal. The Tribunal directed the assessee to pay the total amount by monthly instalments subject to furnishing security to the satisfaction of the I.T.O. The Revenue questioned the Tribunal's power to grant instalments or stay on terms. The Supreme Court established in the case of ITO v. M.K. Mohammed Kunhi that the Tribunal has wide powers under section 254 of the Income-tax Act, 1961, including the power to stay recovery proceedings pending an appeal. The Court emphasized that stay should be granted only in deserving cases to prevent the appeal from being rendered nugatory.

The Supreme Court further clarified in the case of CIT v. Bansi Dhar & Sons that the power to grant stay is incidental to appellate jurisdiction, and the assessee can apply for a stay until disposal of the reference by the High Court. Additionally, the Court in the case of Asstt. Collector of Central Excise v. Dunlop India Ltd. highlighted the importance of considering the balance of convenience and public interest while passing interim orders. The Madras High Court in K.M. Rahmath Bibi v. First ITO observed that the ITO's powers under sections 220(3) and 223(6) include the discretion to grant stay on terms like payment in instalments or furnishing security.

The Tribunal's inherent powers to stay the demand were found to encompass the authority to allow payments in instalments or require the appellant to provide security. The Tribunal's discretion in granting stay should consider both the appellant's circumstances and public interest. The decision not to refer the question to the High Court was based on the clear precedent set by the Supreme Court and the Madras High Court. The Tribunal's order was deemed in accordance with established legal principles, and the Commissioner's reference application was rejected due to lack of merit, as the issue was not raised during the original proceedings before the Tribunal.

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