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TaxTMI 
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TaxTMI 
2017 (5) TMI 1353
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....d of 180 days and finally vide order dated 29.07.2016, the Tribunal was pleased to extend stay for a period of 90 days, which is now expiring on 01.11.2016. He further submitted that as there is no change in the facts and circumstances and there is no fault on the part of the assessee as the cases has not yet been fixed for hearing before the Third Member, therefore, the delay in disposal of appeals is not attributable to the assessee. He, therefore, prayed that the extension may be granted till the final disposal of the appeals by the Bench. 3. The ld. DR, on the other hand, strongly opposed the applications for extension of stay and submitted that if there is no fault on the part of the assessee then there is no fault on the part of the Revenue also and the Revenue should not be made to suffer due to non-disposal of the appeals by the Tribunal. He further submitted that the Tribunal vide order dated 29.07.2016 had extended stay for a period of 90 days which was beyond period of 365 days on the basis of the judgment of the Hon'ble Punjab & Haryana High Court, in the case of Pr. CIT Vs. Carrier Air Conditioning & Refrigeration Ltd. [2017] 387 ITR 441. The ld. DR submitted that....
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....pra) and find the appeals of the assessee have been referred to the Third Member because of difference of opinion between the Members and which are yet to be fixed for hearing. The outstanding demand in the present cases, was stayed by the interim orders passed by the Tribunal dated 30.9.2014 (supra) & 29.07.2016 (supra). The assessee has moved the present stay applications seeking extension of stay of recovery of the outstanding demand, beyond a period of 365 days even after insertion of third proviso to section 254(2A) of the Act, w.e.f. 1.10.2008 whereby the Tribunal's powers has been restricted to extend stay of demand beyond a period of 365 days. The ld. counsel for the assessee has relied on the decision of the Hon'ble Punjab & Haryana High Court in the case of Principal Carrier Air Conditioning & Refrigeration Ltd. (supra) for the proposition that where the delay in disposal of appeals is not attributable to the assessee, the Tribunal can extend the period of stay beyond 365 days. The Hon'ble High Court has answered the question of law in favour of assessee by framing and answering the following question of law: "(i) Whether the Hon'ble ITAT has acted in con....
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....com Gill Coffee Trading (P.) Ltd. (supra) relates to Hon'ble Karnataka High Court, whereas the case law relied upon by the ld. AR relates to jurisdictional High Court of Punjab & Haryana. Therefore, keeping in view the above decision of Hon'ble Punjab & Haryana High Court, we extend the stay for further period of 90 days or till the disposal of the appeal by the Third Member, whichever is earlier. The terms and conditions of the original stay order as well as of the extended stay order will continue to remain the same. In the meantime, the parties are directed to approach the appropriate authorities for fixation of their appeals for hearing so that the dispute could be resolved. 7. In the result, both the stay applications of the assessee are disposed off in the above terms. N.K. Choudhry, Judicial Member - The proposed appellate order in the aforesaid applications, authored by my Ld. Brother, Sh. T.S. Kapoor, the Ld. Accountant Member has been carefully perused and considered by me. I also offered my comments on the said proposed order and had discussions and deliberations on the issue of extension of grant of stay. However, no consensus arrived therefore after going thr....
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....Member to adjudicate the question of law which existed divergent views between the Hon'ble Members. In the meantime, the stay was further extended from time to time and the matter was fixed before the Third Member for hearing on 10.05.2016, the Tribunal adjourned the hearing sine die on that date. It is to mention herein that by issuing garnishee notice dated 04.01.2016, the Revenue department attached the Bank account of the Assessee and aggrieved by the aforesaid attachment, the assessee filed a writ petition No. CWP 1722/2016 under article 261 of the constitution before the Hon'ble jurisdictional High Court and the Hon'ble Court vide order dated 21.07.2016 passed the order with the below mentioned directions: "In the event of the stay being extended by the Tribunal for any period, the respondents shall refund the amount recovered, but subject to any conditions imposed by the Tribunal." 4. The Tribunal vide order dated 29.07.2016 without taking note of the directions of the Hon'ble High Court extended the stay for a further period of 90 days on the same terms and conditions of the original stay order as well as of the extended stay order. The period of stay wa....
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....by the Jurisdictional high Court. Finally, it was argued by the ld. DR that if still the Tribunal feel it appropriate to extend the stay, then interest of the Revenue may be safeguarded by directing the assessee to deposit the quantum of penalty order subject to refund by the Revenue on success of assessee's appeals or otherwise any other security as deems fit and proper as the same was directed by the jurisdictional High Court while passing order dated 21.07.2016. 7. In reply to the submissions of the ld. DR, the ld. counsel for the assessee argued that the assessee is working on an overdraft limit and putting any kind of condition qua security shall be burdened upon the Assessee. Financial constraints and hardships have already been taken into consideration by the Tribunal while passing the original order dated 30.09.2014. It was further argued that there is no change in the facts and circumstances of the case and the appeals of the assessee in quantum proceedings are pending before the Hon'ble High Court. Therefore, the assessee is entitled for grant of extension of stay. 8. We have heard the rival contentions and have gone through the facts and circumstances of the ca....
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....tional High Court has clearly held that stay can be extended beyond 365 in deserving cases. The case of Ecom Gill Coffee Trading (P.) Ltd. (supra) relied upon by the Id. counsel for the Assessee relates to Hon'ble Karnataka High Court, therefore, in my considered opinion, the same cannot be applied in instant case because it is imperative to follow the ratio of the judgment if any on the same subject matter passed by the Jurisdictional High Court as the situation is same in the instant case. It is worthwhile to mention herein that in the instant case, the Hon'ble President, ITAT had referred the matter for decision by a Third Member and the appeals were listed for hearing on 10.05.2016, however, on the said date, the matters got adjourned sine die and thereafter no date has been fixed even after lapse of six months due to huge pendency, work load and non-functioning of the Bench. 8.1 In the instant case approximately, 761 days have already been elapsed from the date of stay order and the intention of the legislature mandates that the stay can be granted up to maximum time limit of 365 days and after lapse of the said time limit, the stay automatically gets vacated. After s....
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....of stay of recovery of penalty pending appeal and laid down the law as under: "Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when s. 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when s. 254 confers appellate Jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that the Appellate Tribunals proceed to stay recovery of taxes or penalties payable b....
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....unt of the order on such terms and conditions as the Revenue/Department deems fit within 30 days from the date of the order. ii. Assessee shall give undertaking to the effect that the Assessee shall not transfer, dispose of, alienate or create any kind of third party interest in the fixed and immovable assets of the Assessee-company, in order to secure the amount under consideration within 30 days from the date of the order. 8.6 In the aforesaid observations, terms & conditions, the stay order dated 29th July 2016 which is upto 01-11-2016 is further extended for a period of 90 days i.e. upto 1st of February 2017 or till the final disposal of the appeals by the Third Member, whichever is earlier. In default of the Assessee to fulfill the terms and conditions, the stay stands vacated automatically after 30 days of the Order and the Revenue will be at liberty to take appropriate steps in accordance with law. 9. I feel it appropriate to sternly direct the parties to approach the appropriate Authorities for fixation of their appeals for hearing so that dispute can be resolved as early as possible and without any delay. 10. In the result, both the stay applications of the Asses....
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....ng/consideration of the aforesaid directions." 3. Whether while making such observations, the ld. JM was justified in observing that on the basis of directions of the Hon'ble High Court the Tribunal was bound to impose conditions while granting extension of stay? 4. Whether while making such observations is it justified on the part of Hon'ble JM to ignore the reasons for extension of stay as given in the Tribunal order dated 29.07.2016 wherein the Hon'ble Tribunal had allowed the extension of stay as there was no fault on the part of assessee and facts & circumstances remained the same and Hon'ble Tribunal had followed the decision of Hon'ble Jurisdictional High Court while extending the stay. 5. Whether while agreeing with the Hon'ble Accountant Member view for extension of stay by 90 days, the Hon'ble J.M. is justified to impose conditions for providing securities to the Revenue by observing that during original stay granted in Sept., 2014 the Hon'ble Tribunal had taken into account the financial constraints, whereas during course of present stay applications the ld. AR failed to produce any documents to demonstrate financial constraints.' ....
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....ue? 6. Whether financial constraints and situation of year 2014 is paramount and would be more relevant to consider while ignoring the today position, in extending the stay in the absence of any supporting documents? 7. Whether once statute specified 365 maximum days for stay of Order then lapse of around 761 days are not relevant and important to consider while considering application for extension of extension? 8. Whether the Ld A.M, was not duty bound and obligation to consider and safeguard the rights of the parties equally while giving the equitable relief? 9. Whether in a case where the Assessment Order has been upheld by the 1st and 2nd appellate authouries and Penalty order has been upheld by 1st appellate Authority as well as by one member of the Tribunal Bench, in that eventuality as in the instant case, the Ld. A.M. was justified by not securing the amount under controversy and by not asking the security? THIRD MEMBER ORDER Bhavnesh Saini, Judicial Member (As a Third Member) - Briefly the background of filing of these Stay Applications by the assessee are that on there being a difference of opinion between Ld. Members of ITAT Amritsar Bench on penalty appeals, the ....
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....mount under consideration within 30 days from the date of the order. 3. Since there had been a difference of opinion between both the ld. Members of ITAT Amritsar Bench, therefore, both the ld. Members have framed their questions for reference to the Third Member. Hon'ble President, ITAT Mumbai has appointed me as Third Member to resolve the controversy involved while passing the orders on the Stay Applications. 4. I have heard ld. Representatives of both the parties and perused the material on record. 5. Both the Ld. Members have framed large number of questions separately, however, the crux of the matter would disclose that only one issue arise for consideration; "Whether while extending stay in both the Stay Applications, two conditions, as noted above, were to be imposed in the facts and circumstances of the case ?. 6. The ld. counsel for the assessee submitted that earlier on different occasions, stay was granted against outstanding demand which was also extended time to time without putting any condition by the Tribunal. There is no delay attributable to the assessee for disposal of the appeals. The Tribunal found prima facie case in favour of the assessee and balance....
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....ave not been followed by the ITAT Amritsar Bench in their order dated 29.07.2016. No blanket stay should be granted in the matter. The assessee on the hearing of Stay Applications has agreed to give undertaking not to transfer or alienate their fixed assets/properties. The department has prima facie case to levy the penalty, because quantum was decided against the assessee. The assessee paid advance tax of Rs. 166 crores in this year and as such, it has no impact on the loss. The judgement of the Hon'ble High Court is benchmark to grant stay with conditions. It is the duty of the ITAT to follow the order of Hon'ble Punjab & Haryana High Court in the case of the assessee. 7. The ld. counsel for the assessee in the rejoinder submitted that advance tax was paid because of the MAT liability otherwise, the financial condition of the assessee is not so good to make any payment of 25% through bank guarantee as is directed by the ld. Judicial Member. The ld. counsel for the assessee has, however, agreed that in Section 254(2A) of the Act, there is no bar on the Tribunal to impose any reasonable condition while granting or extending the stay, even if there is no delay attributable ....
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....at no coercive measures be taken for recovery of the disputed demand in the meantime and directed status quo to continue. There was no time limit of the stay order. The appeal was heard on 26.08.2015. As there was a difference between the members, a reference was made on 06.01.2016 to the President of the Tribunal for placing the appeal before a third member. By an order dated 03.02.2016, the third member noted that the Judicial Member and the Accountant Member, who had differed with each other, had agreed that the stay order was required to be extended as the delay in deciding the appeal was not attributable to the petitioner. Accordingly, the third member by the order dated 03.02.2016, extended the stay by 180 days. 3. The petitioner's grievance is that despite the stay granted on 05.06.2015 and on 03.02.2016, the respondents issued the said recovery notice under Section 226(3) and proceeded to recover the amount lying to the credit of petitioner in the respondent No. 2-Bank. 4. We will assume that the order dated 05.06.2015 was not limited in time and that, therefore, recovery of the penalty was contrary to the order. In our view, however, there was no willful disobedience....
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....y the subordinate authorities including the Tribunal. The directions of the Hon'ble High Court are clear and specific that in the event stay is being extended by the Tribunal, the Income Tax Department shall refund the amount recovered, but subject to any condition imposed by the Tribunal. The Deptt. has refunded the recovered amount. Therefore, while extending the stay, even if no delay is attributable to the assessee about pendency of the appeals, the judgment of Hon'ble High Court shall have to be followed in the matter. The ld. counsel for the assessee, has, however been able to explain that financial condition of the assessee is not so good so as to pay any amount to the Revenue Department. It is contended that assessee is running its business activities on overdraft and has no sufficient amount even to take up the matter of day-to-day activities of the assessee. The ld. counsel for the assessee has also been able to show that the assessee has huge fixed/immovable properties and assessee is willing to give undertaking to the satisfaction of the Revenue Department so that interest of revenue be protected as assessee would not alienate or transfer any of its fixed or imm....
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.... an application filed by assessee, it was granted stay vide order dated 30.09.2014, which on another application was further extended by order dated 29.07.2016. Again assessee applied for extension of the Stay Order as the cases fixed before Third Member were not heard and delay in disposal of appeals were not attributable to the assessee. The Accountant Member, therefore, passed the order for extension of stay and extended the stay for a further period of 90 days or till the disposal of the appeals by Third Member whichever was earlier. While extending the stay the Accountant Member relied on the judgment of the Hon'ble Punjab & Haryana High Court in the case of Carrier Air Conditioning and Refrigeration Ltd. (supra), for the proposition that where the delay in disposal of appeals was not attributable to the assessee the Tribunal was empowered to extend the period of stay beyond 365 days. The Accountant Member had also held that the terms and conditions of the original Stay Order as well as of the extended Stay Order will continue to remain the same. However, the Judicial Member though agreed with the extension of stay for a period of 90 days but he imposed the following two c....