TaxTMI 
TaxTMI 
2009 (1) TMI 335
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry of penalty. By another order dated 25-2-1993 the High Court held that: "Interim stay already granted on 4-12-1990 is made absolute on condition that the petitioner pays 25 per cent of the penalty and interest in six equal monthly instalments commencing from April, 1993. Each instalment to be paid on or before 10th of the month. W.M.Ps are ordered as above." Subsequently, the petitioner filed another WMP No. 10870/93 for further directions and clarifications of the earlier order of the High Court and the High Court by its order dated 19-4-1993 held as follows: "Having given my anxious consideration, I direct the entire payment of the 25 per cent of the penalty and interest to be paid in 12 equal monthly instalments, the first of the payment to be made on or before the 10-5-1993 and thereafter, on or before the 10th of every month, the monthly instalments shall be paid. In default of anyone instalment, the interim stay shall stand vacated." However, the petitioner had complied with the above directions only in respect of two instalments but had not complied with the directions in respect of other instalments even though it had ultimately remitted a sum of Rs. 26,20,929....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he jurisdiction of the Tribunal over the subject-matter of appeal and the attendant relief that could be granted. Thus we reject the contention of the learned Departmental Representative. Having heard the rival submissions and having regard to the fact that the assessee had paid about Rs. 36,20,929 against the demand of Rs. 100 lakhs, we deem it fit to post the case out of turn for hearing. Registry is directed to post the case in the month of February, 1996. Interim stay is granted till disposal of appeal. Any request for adjournment of the hearing of the case on the part of the assessee or on the part of the revenue is liable to be rejected resulting in the case being decided ex parte on merits. The petition is thus allowed. Per S. Ananda Reddy, Judicial Member.-I have gone through the order of my learned Brother. I am unable to concur with my learned Brother. Therefore, I am constrained to pass the following order. 2. The assessee is an individual. For the assessment year 1985-86 the departmental authorities levied penalty under section 271(1)(c) in a sum of Rs. 100 lakhs. This was confirmed by the CIT(Appeals) and the assessee is in further appeal to this Tribunal. Simult....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee had in fact paid a sum of Rs. 26,20,929 (towards penalty and interest) in all, i.e., more than 25 per cent of the penalty as directed by the High Court. Because of the default clause incorporated in the order of the High Court, there is no stay, though the order of the Hon'ble High Court was substantially complied with. It was also stated that there is no stay application pending before the Hon'ble High Court, as the earlier petition has worked itself out. Therefore, prayed for grant of stay. 3. The learned counsel for the assessee contended that the present stay application is an independent application and as the penalty proceedings are pending before this Tribunal in appeal, this Tribunal can grant stay of the collection of the balance demand as the assessee has paid more than 25 per cent of the penalty now. The Departmental Representative, on the other hand, opposed the grant of stay stating, that the present proceedings would not survive in view of the pendency of the Writ proceedings. It was also stated that the assessee had approached the Hon'ble High Court of Madras for grant of stay. At the assessee's instance, the original conditional order passed was even modifi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-Since the Members of the Bench differed in their opinion on the following points, the issue is placed before the Hon'ble President of the Income-tax Appellate Tribunal for action under section 255(4) of the Income-tax Act, 1961: "(1) Whether, the writ petition filed by the petitioner-appellant (which has been admitted and pending with the Hon'ble High Court of Madras) against an order passed by the Commissioner of income-tax under section 273A of the Income-tax Act, declining to reduce or waive the levy of penalty has the effect of ousting the jurisdiction of the Tribunal over the subject-matter of appeal against levy of penalty for concealment of income? (2) Where the interim stay granted in the Writ Miscellaneous Petition by the High Court stood vacated as a result of the default committed by the assessee in the payment of instalments as directed by the High Court, the assessee who has filed an appeal before the Tribunal against levy of penalty is within his rights to approach the Tribunal for stay of collection of the outstanding amount and/or to hear the appeal out of turn and whether the Tribunal is within its powers to entertain such an application? (3) Whether, in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the assessee. The Hon'ble Madras High Court vide its order dated 14-12-1990 admitted the petition. The Court also granted stay of recovery of demand with certain conditions. The revenue thereafter moved the Hon'ble High Court for vacation of stay and on 25-2-1993 their Lordships passed the following order:- "Interim stay already granted on 4-12-1990 is made absolute on condition that the petitioner pays 25 per cent of the penalty and interest in six equal monthly instalments commencing from April 1993. Each instalment to be paid on or before 10th of the month. W.M.Ps are ordered as above. 4. Subsequently, the petitioner filed another W.M.P. No. 10870/93 for certain directions and clarification of the earlier order. The High Court, by its order dated 19-4-1993, ordered as under:- 'Having given my anxious consideration, I direct the entire payment of the 25 per cent of the penalty and interest to be paid in 12 equal monthly instalments, the first of the payment to be made on or before the 10-5-1993 and thereafter, on or before the 10th of every month, the monthly instalments shall be paid. In default of anyone instalment, the interim stay shall stand vacated'." It is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of the revenue is liable to be rejected resulting in the case being decided ex parte on merits. The petition is thus allowed: 4. The learned Judicial Member did not agree with the above view. He noted in his proposed order the various directions issued by the Hon'ble High Court in the writ petition relating to stay of recovery of penalty and interest. He has observed: The Hon'ble High Court also incorporated a default clause, 'in default of anyone instalment the interim stay shall stand vacated'. The assessee did not comply with that order also. Later he moved the Tribunal and filed stay application No. 50/95. The learned Judicial Member further noted that before the Tribunal it was represented that the assessee has again filed another application for modification of the order of the Hon'ble High Court, which is pending. In view of the aforesaid representation the Tribunal rejected the stay application on 5-6-1995. Now a plea has been taken that the assessee has paid more than 25 per cent of penalty and no stay application is pending before the Hon'ble High Court. The learned Judicial Member further noted that the Tribunal has considered a similar view in the main appeal in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her the Tribunal is within its powers to entertain such an application? (3) Whether, in the facts and circumstances of the case, the order proposed by one of the Members granting interim stay and directing the hearing of the case out of turn is just and proper in exercising the powers incidental and ancillary to the appellate jurisdiction?" The learned Judicial Member did not agree with the proposed questions for reference and, accordingly, he proposed the following two questions under section 255(4) of the Act:- (1) Whether on the facts and in the circumstances of the case, the assessee deserves for the exercise of the discretionary powers of the Tribunal inherent to the appellate authority for granting stay of the recovery of the penalty levied, especially when the stay granted by the Hon'ble High Court for recovery of the same was vacated for the default of the assessee? (2) Whether, the action of the Tribunal in entertaining the stay petition does not amount to, this Tribunal either sitting over the order of the High Court, or stepping into the shoes of the High Court to amend its order; hence in excess of its jurisdiction? With the above difference the matter wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d should be stayed was identical. The question was earlier raised before the Hon'ble High Court. In the light of the direction of the Hon'ble High Court, which is a superior court, it would be highly improper for the Tribunal to interfere grant stay of recovery of demand and start parallel proceedings. As observed by the learned Judicial Member, if the assessee was aggrieved and had any grievance, the remedy was to approach the Hon'ble High Court. Judicial discipline in the matter demanded that the Tribunal should let the matter rest as per order of the Hon'ble High Court. Therefore, there was no justification on the part of the learned Accountant Member to pass a fresh order of stay as has been done by him in his proposed order. 9. Even otherwise on the facts and circumstances of the case, the application of the assessee has become infructuous. In this case, 17/18 years have passed without any grant of stay. This clearly shows that nobody is interested on behalf of the assessee in the stay of recovery of demand. Otherwise all possible steps would have been taken by the legal representatives. It is well settled that stay of demand is a discretionary relief and is to be granted t....