THE PR. COMMISSIONER OF INCOME TAX -6 vs. NOKIA INDIA SALES PVT. LTD.

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ITA/890/2019HC DelhiDLHC01040690201911 October 2019Bench: HON'BLE MR. JUSTICE VIPIN SANGHI,HON'BLE MR. JUSTICE SANJEEV NARULA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal has the power to extend a stay beyond the period of 365 days, notwithstanding the second proviso to Section 254(2A) of the Income Tax Act. The Court's reasoning is based on its prior decision in Pepsi Foods Co. Pvt. Ltd. v. Assistant Commissioner of Income Tax & Anr., which established this principle. The ratio decidendi is that the Tribunal's power to grant stay is not strictly limited by the proviso, and it can extend the stay to ensure that the assessee is not prejudiced during the pendency of their appeal. The Court found that no substantial question of law arose from the Tribunal's order. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue has appealed an order dated April 5, 2019, passed by the Income Tax Appellate Tribunal (ITAT), Delhi. This order extended a stay previously granted in favor of the respondent assessee, Nokia India Sales Pvt. Ltd., for an additional 180 days. The stay pertains to the assessment year 2013-14. The appeal arises from an application for stay (S.A. No. 331/Del/2019) related to an appeal before the Tribunal (ITA No. 7244/Del/2017). The core of the dispute is the Tribunal's power to extend a stay beyond the statutory period.

What were the issues?

1. Whether the Income Tax Appellate Tribunal has the power to extend a stay granted to an assessee beyond the period stipulated in the second proviso to Section 254(2A) of the Income Tax Act, 1961. The Revenue contends that the Tribunal's power to extend stay is limited by the statutory provisions. The Respondent assessee argues that the Tribunal has the inherent power to grant necessary relief, including extending stay, to ensure justice and prevent prejudice, especially when the appeal is pending for a prolonged period. The Revenue relies on the second proviso to Section 254(2A) which limits the stay period. The Respondent's argument implicitly relies on the principle of ensuring effective justice. The High Court, in its decision, referred to the case of Pepsi Foods Co. Pvt. Ltd. v. Assistant Commissioner of Income Tax & Anr.

Which sections of the Income-tax Act were involved?

Section 254(2A)

AI-generated summary — verify with the full judgment below

$~44. * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 890/2019

THE PR. COMMISSIONER OF INCOME TAX -6..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

NOKIA INDIA SALES PVT. LTD.

..... Respondent Through: Mr. Nageswar Rao and Mr. Shatanik C., Advocates.

CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA

O R D E R % 11.10.2019

The Revenue assails the order dated 05.04.2019 passed by the Income Tax Appellate Tribunal, Delhi Friday Bench "Friday-I-1" New Delhi in S.A. No. 331/Del/2019 arising out of ITA No. 7244/Del/2017 for the assessment year 2013-14. By the impugned order, the Tribunal has extended the stay granted by it in favour of the Respondent assessee for a further period of 180 days.

The issue sought to be raised by the Revenue is covered by the decision of this Court in Pepsi Foods Co. Pvt. Ltd. v. Assistant Commissioner of Income Tax & Anr, 2015 376 ITR 87. This Court has held that the Tribunal can extend the stay beyond the period of 365 days despite the second proviso under Section 254 (2A) of the Income Tax Act.

Thus, no question of law arises in the present appeal and the same is, accordingly, dismissed.

VIPIN SANGHI, J

SANJEEV NARULA, J OCTOBER 11, 2019 B.S.Rohella

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