CANON INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-5(2), NEW DELHI

W.P.(C)-3238/2015HC Delhi2015:DHC:299427 March 20153 pages

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What did the High Court hold?

The Delhi High Court held that it has the power to extend a stay order granted by the Income Tax Appellate Tribunal in exercise of its jurisdiction under Article 226 of the Constitution of India, provided the circumstances and the ends of justice warrant such an extension. This principle was affirmed in the case of CIT v. Maruti Suzuki (India) Limited. The Court noted that the petitioner had already been granted a conditional stay by the ITAT, and their appeal was pending before the Tribunal. Given that the appeal was in the midst of being heard and the petitioner could not seek further extension from the ITAT due to the time limitation, the Court found it to be in the interest of justice to continue the stay order granted by the Tribunal until the disposal of the appeal by the ITAT. The writ petition was disposed of with this direction.

What were the facts?

The petitioner, Canon India Private Limited, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an assessment order. The ITAT initially granted a stay on the demand raised by the assessment order on March 31, 2014. This stay was subsequently extended by the ITAT on September 19, 2014. However, a Division Bench of the Delhi High Court in CIT v. Maruti Suzuki (India) Limited ruled that the ITAT cannot extend a stay beyond 365 days from the initial grant. As the 365-day period was set to expire on March 30, 2015, the petitioner could not seek further extension from the ITAT. The petitioner's appeal before the ITAT was listed for hearing but could not be taken up due to reasons not attributable to the petitioner, and was subsequently listed for April 13, 2015. In light of these circumstances, the petitioner filed a writ petition before the Delhi High Court seeking an extension of the stay on the demand for assessment year 2009-10 until the disposal of their appeal by the ITAT.

What were the issues?

1. Whether the Delhi High Court has the power to extend a stay granted by the Income Tax Appellate Tribunal beyond the period stipulated by the Tribunal's own rules or judicial pronouncements, in exercise of its writ jurisdiction under Article 226 of the Constitution of India. Assessee's Contentions: The petitioner argued that the Delhi High Court has the power to extend such stays, citing several previous orders where the Court had granted similar relief. They contended that this power is exercisable if the Court is of the opinion that the circumstances and the ends of justice warrant it, a principle also recognized in the case of CIT v. Maruti Suzuki (India) Limited. The petitioner also highlighted that their appeal before the ITAT was pending and could not be heard within the extended stay period due to reasons beyond their control. Revenue's Contentions: The judgment does not record any specific contentions made by the respondent revenue.

Which sections of the Income-tax Act were involved?

Article 226

AI-generated summary — verify with the full judgment below

WPC 3238/2015

Page 1 of 3

THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 27.03.2015

+ W.P.(C) 3238/2015 CANON INDIA PRIVATE LIMITED

... Petitioner

versus

DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-5(2), NEW DELHI

... Respondent

Advocates who appeared in this case: For the Petitioner : Mr Prakash Kumar For the Respondents : Mr Kamal Sawhney, Mr Shikhar Garg and Mr Mukul Mathur

CORAM:-

HON’BLE MR JUSTICE BADAR DURREZ AHMED HON’BLE MR JUSTICE SANJEEV SACHDEVA

JUDGMENT

BADAR DURREZ AHMED, J (ORAL) CM 5806/2015

The exemption is allowed subject to all just exceptions. WP(C) 3238/2015 & CM 5805/2015 1. Issue notice. Notice is accepted by the learned counsel appearing on behalf of the respondent. Since the facts are not in dispute, the matter is taken up for hearing at the first instance itself.

The petitioner has filed an appeal being ITA No. 1442/Del/2014 before the Income Tax Appellate Tribunal being aggrieved by the 2015:DHC:2994-DB

WPC 3238/2015

Page 2 of 3

assessment order. The Tribunal, at the initial stage, that is, on 31.03.2014, had granted stay of the demand which had been raised subsequent to the said assessment order.

A subsequent order dated 19.09.2014 was passed by the Tribunal extending the interim stay. By virtue of the decision of a Division Bench of this Court in CIT v. Maruti Suzuki (India) Limited: [WP(C) 5086/2013] decided on 21.02.2014, it is made clear that the Tribunal has no authority to extend the period of stay beyond a period of 365 days from the initial date of grant of stay. As 365 days would expire on 30.03.2015, the petitioner cannot approach the Tribunal for any further extension of stay. It is also to be noted that, in the meanwhile, the petitioner’s said appeal before the Tribunal was listed for hearing but could not be taken up for reasons not attributable to the petitioner. Now, the appeal is listed for hearing on 13.04.2015.

It is in these circumstances that the petitioner has approached this Court by way of this writ petition seeking extension of stay in respect of the assessment year 2009-10 till the disposal of the appeal by the Tribunal. The learned counsel for the petitioner has placed before us several orders passed by this court, whereby this Court has extended the stay initially 2015:DHC:2994-DB

WPC 3238/2015

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granted by the Tribunal till the disposal of the appeal by the Tribunal in exercise of its jurisdiction under Article 226 of the Constitution. In fact, it is settled law that there is no bar for grant of such a relief if the Court is of the opinion that the circumstances and the ends of justice so warrant. This has also been stated clearly in Maruti Suzuki (supra).

We feel that since the petitioner had already been granted conditional stay by the Tribunal in respect of the said appeal and that the Tribunal is in the midst of hearing the appeal, it would be in the interest of justice that the stay order granted by the Tribunal is continued till the disposal of the appeal by the Tribunal. It is ordered accordingly. The writ petition stands disposed of. Dasti under the signature of the Court Master.

BADAR DURREZ AHMED, J

MARCH 27, 2015

SANJEEV SACHDEVA, J SU

2015:DHC:2994-DB

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