Income Tax Appellate Tribunal - Delhi
Centre For Women'S Development Studies vs Deputy Director Of Income-Tax on 19 August, 2002
Equivalent citations: [2002]257ITR60(DELHI), (2003)78TTJ(DELHI)740
ORDER
S. K. Yadav, Judicial Member
1. By this second stay application, the asses-see seeks a further stay against recovery of tax amounting to Rs. 40,45,368.
2. The assessee is a charitable institution registered under Section 12A as well as under Section 35(1)(iii) of the Income-tax Act, 1961. The assessee claimed exemption under Section 10(22) which had been rejected by the Assessing Officer. Consequently, assessable income was computed at Rs. 67,30,980. In appeal, the Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer. Even the claim of the assessee under Section 11 was not entertained by the Commissioner of Income-tax (Appeals) on the ground that it was not placed before the Assessing Officer. Aggrieved, the assessee preferred an appeal before the Tribunal along with an application for stay of outstanding demand of Rs. 40,45,368. The stay application was disposed of by the Tribunal vide its order dated January 23, 2002, staying recovery of outstanding demand till June 30, 2002, subject to payment of Rs. 5 lakhs by January 31, 2002. In consequence, the assessee made the payment of Rs. 5 lakhs and hearing of the appeal was started. During the course of hearing, the assessee moved an application for admission of the additional evidence and that application was disposed of by the Tribunal vide its order dated August 5, 2002. On an expiry of the stay, the assessee approached the Tribunal and the Tribunal vide its order dated July 12, 2002, extended the stay up to July 22, 2002. Before the expiry of the extended stay, the assessee has moved the present application for stay of remaining outstanding demand of Rs. 40,45,368 with a request that on all dates of hearing, the assessee has co-operated with the Bench to its full extent and hearing of the appeal is in process. He further invited our attention that since the stay has been vacated in view of the provisions of Sub-section (2A) of Section 254 of the Act which was brought to the statute with effect from June 1, 1999, the assessee, therefore, moved a fresh application for stay with fresh court fees.
3. Learned counsel for the assessee further contended that the facts of the case remained the same and the balance of convenience is still entirely in favour of the assessee. The stay earlier granted therefore may kindly be extended for another period of six months or disposal of the appeal.
4. The learned Departmental Representative on the other hand, has emphatically argued that by inserting Sub-section (2A) of Section 254 of the Income-tax Act with effect from June 1, 1999, the Legislature has withdrawn the powers of the Tribunal for extending the stay beyond the period of six months from the date of first order of stay. Since the Act itself is very clear on this subject, there would be no question of its interpreting in favour of the assessee.
5. Learned counsel for the assessee in rebuttal has emphatically argued that the purpose of inserting this Sub-section (2A) of Section 254 is only to put a check on a stay granted by the Tribunal for unlimited period. The intention of the Legislature is also clear from the notes on clauses on the Finance Bill, 1999. Through this explanatory note, it has been clarified that under the existing provisions, there was no limit for disposal of appeals filed before the Commissioner of Income-tax (Appeals) or the Appellate Tribunal under the Income-tax Act or the other direct tax enactments. By inserting this sub-section, the Legislature has tried to curtail the delays and to ensure the disposal of the pending appeals within a reasonable time. Learned counsel for the assessee has submitted that it has been noticed a number of times that whenever stay is granted till the disposal of the appeal, the hearing of the appeal is being prolonged for one reason or the other. To curb this practice, the Legislature has brought the amendment and fixed the time of six months for disposal of appeal in stay granted matters but it does not mean that the Legislature has withdrawn or curtailed the power of the Tribunal to grant a stay for a period exceeding six months, in support of this contention, he has relied upon the judgment of the Supreme Court in the case of ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815.
6. We have heard the rival submissions and carefully examined the relevant provisions of law in the light of rival submissions. The stand of the assessee that facts remain the same and the balance of convenience still is entirely in favour of the assessee is not disputed by the Revenue. The main objection of the Revenue is that the Tribunal has no power to grant a further stay after the expiry of six months of earlier stay granted by the Tribunal. On this issue, we have examined the provisions of Section 254 and the explanatory notes on clauses of the Finance Bill, 1999, reported at [1999] 236 ITR (St.) 147. We have also examined the Board Circular No. 779 dated September 14, 1999, appearing at [1999] 240 ITR (St.) 3, 40, in which it has been explained that under the existing provision, there was no limit for disposal of appeal before the Commissioner of Income-tax (Appeals) or the Appellate Tribunal under the Income-tax Act or the direct tax enactments. In the absence of any statutory provision, there is considerable delay in the disposal of the appeals. It is also seen that there is disinclination to take up the old appeals for disposal. To ensure accountability as well as the disposal of appeals within a reasonable time-frame, the Act has amended Section 250 and 254 of the Income-tax Act to provide that the Commissioner (Appeals), where it is possible, may hear and decide every appeal within a period of one year from the end of the financial year in which the appeal is filed. The Appellate Tribunal, where it is possible, may hear and decide every appeal within a period of four years from the end of the financial year in which the appeal is filed. To discourage filing of frivolous appeals, the Act has amended Section 254 of the Income-tax Act empowering the Appellate Tribunal to award costs in suitable cases under the Income-tax Act.
7. It is also evident from the Board circular that the object behind the insertion of Sub-section (2A) of Section 254 is to curtail the delays and to ensure the disposal of pending appeals within a reasonable time frame. Therefore, the provisions contained in the first and second provisos have to be interpreted contextually in the light of the basic object of expeditious disposal of the appeal. The prescription of initial time limit of 180 days has also to be seen in the same context. There is no Bar imposed on the powers of the Tribunal to reconsider the grant of stay beyond 180 days if the appeal is not disposed of within that period. That means on vacation of the stay order on expiry of 180 days, it would be open to the Tribunal to consider the appellant's request for further extension and pass an appropriate order thereon on the facts and circumstances of the case. The powers of the Tribunal have been examined by the Supreme Court in the case of ITO v. M. K. Mohammed Kunhi [1969] 71 ITR 815, in which they have categorically held that Section 254 of the Income-tax Act which confers on the Appellate Tribunal powers of the widest amplitude in dealing with appeals before it, grants by implication the power of doing all such acts, or employing such means, as are essentially necessary to its execution. The statutory power under Section 254 carries with it the duty in proper cases, to make such orders for staying recovery proceedings pending an appeal before the Tribunal, as will prevent the appeal, if successful, from being rendered nugatory.
8. The powers of the Tribunal were repeatedly examined by various High Courts in following judgments :
Ritz Ltd. v. D. D. Vyas [1990] 185 ITR 311 (Bom) ; Agra Beverages Corporation (P.) Ltd. v. ITAT [1995] 216 ITR 835 (All) and CIT v. Smt. S. Vijaya-lakshmi [2000] 242 ITR 46 (Mad).
9. On a careful perusal of the relevant new provisions in the law and aforesaid judicial pronouncements, we are of the considered opinion that subSection (2A) was inserted in Section 254 to curtail the delays and ensure the disposal of the pending appeals within a reasonable time frame. There is no intention of the Legislature to curtail or withdraw the powers of the Tribunal for granting a stay exceeding a period of six months. Had it been the intention of the Legislature, there would be a specific amendment in the Act to this effect because if the powers of the Tribunal for granting the stay exceeding a period of six months are withdrawn by this amendment, the object of imparting justice by the Tribunal cannot be achieved even in those cases where the assessee has co-operated with the Tribunal to its full extent and the hearing is in progress. We, therefore, are of the considered view that the Tribunal has power to grant a further stay on the expiry of six months of earlier stay if the facts and circumstances so demand. In the instant case, since the facts remain the same and the balance of convenience lies in favour of the assessee, we grant further stay against the recovery of demand till November 30, 2002, or disposal of the appeal whichever is earlier. Since the next date of hearing has already been fixed, no fresh notice is required to be issued to the parties. Accordingly. Registry is directed to list the appeal for hearing on August 22, 2002.