THE COMMISSIONER OF INCOME T vs. M/S HYUNDAI MOTOR INDIA LTD

TCA/335/2016HC Madras05 June 2020Bench: Hon`ble Mr Justice R. SURESH KUMAR4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court noted that the present appeal filed by the Revenue under Section 260A of the Income Tax Act was against an interim order of the ITAT concerning the grant of stay. The substantial questions of law raised by the Revenue pertained to the ITAT's power to grant stay beyond 365 days, contrary to the third proviso of Section 254(2A). However, the Court observed that these questions had become academic. This was because the main appeal filed by the assessee before the ITAT had already been disposed of on 27.04.2017. Consequently, the Revenue's appeal against the interim stay order had become infructuous. The Court therefore disposed of the present appeal as having been rendered infructuous, leaving the questions raised by the Revenue open for adjudication in an appropriate future case. No costs were awarded.

What were the facts?

The Revenue, Commissioner of Income Tax (CIT), filed a Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), 'D' Bench, Chennai, dated 09.10.2015. This order was passed in a stay petition (SP No.407/Mds/2015) related to the main appeal (ITA No.853/Mds/2014) for Assessment Year 2009-10. The dispute concerned the ITAT's power to grant a stay beyond 365 days, as stipulated in the third proviso to Section 254(2A) of the Act. The ITAT had extended the stay by 120 days on 09.10.2015, leading to an aggregate stay of 420 days. The Revenue contended this extension was contrary to the statutory provisions. However, during the pendency of this appeal, the assessee's main appeal before the ITAT was disposed of on 27.04.2017.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in extending the stay beyond the period of 365 days, which is contrary to the third proviso to Section 254(2A) of the Income Tax Act, 1961? (Question of law) 2. Is not the finding of the Tribunal bad by extending the stay for a further period of 120 days on 09.10.2015, which would in aggregate amount to 420 days, contrary to the statutory provisions enunciated in Section 254(2A), third proviso? (Question of law) 3. Whether the Tribunal has the power to grant stay beyond 365 days in aggregate, especially when the third proviso to Section 254(2A) clearly indicates that if the appeal is not disposed of within the period allowed, then the order of stay stands vacated? (Question of law) Assessee's Contentions: Not recorded. Revenue's Contentions: The ITAT erred in extending the stay beyond 365 days, contrary to the mandate of the third proviso to Section 254(2A) of the Income Tax Act, 1961. The aggregate period of stay granted (420 days) violated the statutory limit, and the stay should have stood vacated upon expiry of the initial period.

Which sections of the Income-tax Act were involved?

Section 260A,Section 254(2A)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

SP No.407/Mds/2015

ITA No.853/Mds/2014

Read from the judgment's own cause title. This page is filed under one of them.

Order in TCA No.335 of 2016 (CIT -Vs- M/s.Hyundai Motor India Ltd) dated 05.06.2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 05.06.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARI AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR Tax Case (Appeal) No.335 of 2016 The Commissioner of Income Chennai.

... Appellant Vs. M/s.Hyundai Motor India Ltd Plot No.H-1 SIPCOT Industrial Park Irungattukkottai, Sriperumbudur Taluk Kancheepuram District, Chennai. PAN : AAACH2364M .. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the common order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 09.10.2015 in SP No.407/Mds/2015 in ITA No.853/Mds/2014. For Appellant : Mr.T.Ravi Kumar, Senior Standing Counsel For Respondent : Mr.S.P.Chidambaram J U D G M E N T (Judgment of the Court was delivered by DR.VINEET KOTHARI,J) This Tax Case Appeal has been filed by the Revenue calling in question the correctness of the order passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai, by raising the following substantial questions of law: Page 1 of 4 http://www.judis.nic.in Order in TCA No.335 of 2016 (CIT -Vs- M/s.Hyundai Motor India Ltd) dated 05.06.2020 “ 1. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in extending the stay beyond the period of 365 days which is contrary to the 3rd proviso stated in Section 254 (2A) of the Income Tax Act, 1961? 2. Is not the finding of the Tribunal bad by extending the stay for a further period of 120 days on 09.10.2015 which would in aggregate amount to in all 420 days which is contrary to the statutory provisions enunciated in Section 254 (2A) 3rd proviso? 3. Whether the Tribunal has the power to grant stay beyond 365 days in aggregate especially when the 3rd proviso to Section 254 (2A) clearly indicates that if the appeal is not disposed off within the period allowed, then the order of stay stand vacated? " 2. Both the learned counsel at Bar submit that the present appeal filed by the Revenue Department is against the interim order passed by the learned Income Tax Appellate Tribunal on 09.10.2015 in SP No.407/Mds/2015 in ITA No.853/Mds/2014 for the Assessment Year 2009-10. 3. The questions raised in the present appeal filed by the Revenue Department under Section 260A of the Income Tax Act is about the powers of the learned Income Tax Appellate Tribunal to grant stay beyond a period of 365 days contrary to the 3rd Proviso of Section 254(2A) of the Income Tax Act, 1961. Page 2 of 4 http://www.judis.nic.in Order in TCA No.335 of 2016 (CIT -Vs- M/s.Hyundai Motor India Ltd) dated 05.06.2020 However, the said questions are rendered academic in view of the fact that the main appeal filed by the Assessee itself stands disposed of admittedly on 27.04.2017 and therefore the present appeal under Section 260A of the Act against the interim stay order granted by the Tribunal becomes infructuous. 3. Therefore, leaving the questions raised by the Revenue Department open for adjudication in appropriate case, we dispose of the present appeal as having been rendered infructuous. No costs. (V.K.,J.) (R.S.K.,J.) 05.06.2020 KST To Income Tax Appellate Tribunal 'D' Bench,Chennai. Page 3 of 4 http://www.judis.nic.in Order in TCA No.335 of 2016 (CIT -Vs- M/s.Hyundai Motor India Ltd) dated 05.06.2020 DR.VINEET KOTHARI, J. AND R.SURESH KUMAR, J. KST T.C.(A) No.335 of 2016 05.06.2020 Page 4 of 4 http://www.judis.nic.in

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