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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals) -10, Mumbai [in short ‘the CIT(A)’ ] , dated 19/02/2020 for the assessment year 2017-18 rejecting assessee’s application for grant of stay.
The assessee in appeal has raised following grounds:
“1. On the facts and circumstances of the case and law the Ld. CIT(A) erred in not granting the stay of disputed demand of Rs.5,73,60,289/-. 2. On the facts and circumstances and law the Ld. CIT(A) failed to appreciate that the Ld. CIT(A) have inherited power to grant the stay. 3. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in direct to approach the Assessing Officer for stay of demand when he himself have power to grant the existing grounds of appeal or before the date of hearing.”
3. Shri Vimal Punmiya appearing on behalf of the assessee submitted that the short prayer in the present appeal is that the CIT(A) has erred in not granting stay on the ground that the CIT(A) has no power to grant stay. The ld.Authorized Representative for the assessee submitted that a direction may be given to the CIT(A) to consider assessee’s application for grant of stay.
4. A specific query was made to the ld.Authorized Representative for the assessee on the maintainability of the present appeal and whether the impugned order passed by the CIT(A) is an appealable order, if yes, under which section of the Income Tax Act, 1961 [in short ‘the Act’].
5. In reply to the specific query raised by the Bench the ld.Authorized Representative for the assessee placed reliance on the decision of Delhi Bench of the Tribunal in the case of Employees Provident Fund Organization vs. Addl. CIT reported as 153 ITD 642(Del-Trib). The ld.Authorized Representative for the assessee submitted that Co-ordinate Bench of the Tribunal after placing reliance on the decision of Hon'ble Supreme Court of India in the case of ITO vs.M.K. Mohammad Kuni reported as 71 ITR 815 (SC) has held that the Tribunal has inherent power to entertain stay application and grant stay. The ld.Authorized Representative for the assessee further submitted that order of CIT(A) rejecting grant of stay is passed u/s. 250 of the Act. The ld.Authorized Representative for the assessee further placed reliance on the decision rendered in the case of Bharat Heavy Electricals Ltd. vs. ITO (TDS) in to 135/Del/2015 for assessment year 2010-11 to 2015-16 decided on 19/06/2015 and in the case of Daulat Luthria Nanubhai Mension vs. ACIT in ITA No.4074/Mum/2015 for assessment year 2012-13 to contend that a direction can be given to CIT(A) to decide the stay application.
6. Per contra, Shri B.K.Bagchi representing the Department submitted that the order of CIT(A) assailed by the assessee in present appeal is not an appealable order as the said order is not passed u/s. 250 of the Act. The ld. Departmental Representative prayed for dismissing appeal of the assessee in- limine as not maintainable.
We have heard the submissions made by rival sides and have examined the impugned order. Before proceeding further we would like to refer to the order passed by CIT(A) dated 19/02/2020, which is subject matter of appeal before the Tribunal. The short order passed by the CIT(A) is reproduced herein below:
“Sub:- Stay application in the case of Pranjali Enterprises Pvt. Ltd. (PAN –AAECP7957Q) for A.Y. 2017-18 – reg. Ref: Your letter dated 05/02/2020. Please refer to the above. The CIT(A) does not have the power to grant stay. Please approach the competent authority i.e. Assessing Officer Sd/- (SIRIPURAPU PADMAJA) Commissioner of Income-tax (Appeals)-10, Mumbai”
The provisions of section 253 of the Act gives the list of orders which are appealable before the Tribunal. For the sake of ready reference relevant extract of section 253 of the Act is reproduced hereunder:-
“253. (1) Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order— (a) an order passed by a Deputy Commissioner (Appeals) before the 1st day of October, 1998 or, as the case may be, a Commissioner (Appeals) under section 154, section 250, section 270A, section 271, section 271A 67[, section 271J] or section 272A; or (b) an order passed by an Assessing Officer under clause (c) of section 158BC, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, after the 30th day of June, 1995, but before the 1st day of January, 1997; or (ba) an order passed by an Assessing Officer under sub-section (1) of section 115VZC; or (c) an order passed by a Principal Commissioner or Commissioner under section 12AA or under clause (vi) of sub-section (5) of section 80G or under section 263 or under section 270A or under section 271 or under section 272A or an order passed by him under section 154 amending his order under section 263 or an order passed by a Principal Chief Commissioner or Chief Commissioner or a Principal Director General or Director General or a Principal Director or Director under section 272A; or (d) an order passed by an Assessing Officer under sub-section (3), of section 143 or section 147 or section 153A or section 153C in pursuance of the directions of the Dispute Resolution Panel or an order passed under section 154 in respect of such order; (e) an order passed by an Assessing Officer under sub-section (3) of section 143 or section 147 or section 153A or section 153C with the approval of the Principal Commissioner or Commissioner as referred to in sub-section (12) of section 144BA or an order passed under section 154 or section 155 in respect of such order; (f) an order passed by the prescribed authority under sub-clause (iv) or sub- clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10. (2) The Principal Commissioner or Commissioner may, if he objects to any order passed by a Deputy Commissioner (Appeals) before the 1st day of October, 1998 or, as the case may be, a Commissioner (Appeals) under section 154 or section 250, direct the Assessing Officer to appeal to the Appellate Tribunal against the order.”
Nowhere in the section 253 it has been mentioned that any interlocutory order passed by the CIT(A) or any other Authority under the Act are appealable before the Tribunal
A bare reading of provisions of section 250 of the Act would show that it is only the order of CIT(A) deciding the appeal that falls under section 250 of the Act . Any interlocutory order passed by CIT(A) does not fall within the ambit of section 250 of the Act.
It is no denying the fact that the Tribunal has inherent powers to grant stay of recovery of outstanding dues. Section 254 of the Act confers vide powers on the Tribunal to decide the appeal and pass such orders thereon as it think fit. The said section also confer power to the Tribunal to grant stay in any proceedings relating to an appeal filed u/s. 253(1) of the Act. What can be construed on a conjoint reading of section 253 and 254 of the Act is that the Tribunal has power to stay recovery of outstanding demand where the appeal is pending before the Tribunal, against appealable orders as mentioned in section 253 of the Act.
The ld.Authorized Representative for the assessee has referred to the decision of Hon’ble Apex Court in the case of ITO vs.M.K. Mohammad Kuni (supra) to contend section 254 of the Act confers on Tribunal powers of widest amplitude in dealing with appeals pending before the Tribunal and the wide powers of the Tribunal include jurisdiction to entertain appeal against the order of CIT(A) rejecting stay. We do not concur with the submissions of ld.Authorized Representative for the assessee. The provisions of section 254(1) of the Act grants Tribunal wide powers to decide the appeal and to pass order therein as it think fit. However, while exercising power conferred under section 254(1) it has to be seen that the statutory powers are exercised only where the Tribunal has jurisdiction to entertain the appeals. The powers of the wide amplitude cannot be exercised where the matter is beyond the jurisdiction. The Tribunal can entertain application for grant of stay only where the appeal for relevant period by the assessee is pending for disposal before the Tribunal.
The issue, whether the Tribunal has jurisdiction to entertain the appeal of assessee against the order passed by CIT(A) on an application of assessee for stay of recovery of demand, when the appeal was pending before the CIT(A) and no appeal was pending before the Tribunal was subject matter of consideration in the case Rajya Krishi Utpadan Mandi Parishad vs.ITO reported as 153 ITD 101 (Lucknow- Trib) (TM). The Third Member concurring with the view of Accountant Member observed that order passed by the CIT(A) on an application seeking stay of demand is not a Final order and hence, such an order is not appealable before the Tribunal. The Third Member after considering various judicial precedence concluded as under:-
17. From the above decision it would be clear that the power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to grant stay. However, no appeal is pending before the Tribunal and there is no specific express power with the Tribunal to entertain and dispose of such appeals, so the Tribunal cannot grant the stay of collection of tax by entertaining the appeals against orders of ld. CIT(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction.
Therefore, in my considered view, the appeal filed by the assessee against the order of ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable. Therefore, appeals against such orders cannot be admitted and as such, are liable to be dismissed, which view has been expressed by ld. Accountant Member with which I agree. Now, the file shall go before the regular bench for passing of consequential orders. Thus, in the light of the provisions of section 250, 253 and 254 of the Act and the aforesaid decision rendered by Third Member in the case of Rajya Krishi Utpadan Mandi Parishad vs. ITO (supra) it is unambiguously clear that the order of CIT(A) rejecting stay/refusal to entertain application of stay is not an appealable order before the Tribunal. The Tribunal can entertain application for grant of stay where the appeal of the assessee for relevant assessment year is also pending before the Tribunal.
The assessee has placed reliance on the decision in the case of Employees Provident Fund Organization vs. Addl. CIT (supra) A perusal of the same shows that while entertaining the appeal of assessee against the order of CIT(A) in not granting stay, the Co-ordinate Bench has not considered the decision in the case of Rajya Krishi Utpadan Mandi Parishad vs. ITO (supra).
The assessee has also placed reliance on the decision of Tribunal in the case of Bharat Heavy Electricals Ltd. vs. ITO (supra). We find that the facts in the said case are distinguishable. In the said case Hon’ble High Court under Writ Jurisdiction directed the Tribunal to decide the interim stay application along with appeal within a specified time frame. The appeals were still pending before the CIT(A) , the Tribunal on directions of the Hon’ble High Court directed the Revenue to refrain from taking any coercive action against the assessee till the order in first appeal is passed by the CIT(A) on merits.
We find that in the case of Daulat Lutharia vs. ACIT in the assessee approached Tribunal against the order of CIT(A) in rejecting stay of demand, whereas the appeal of assessee was still before the CIT(A). The Co-ordinate Bench after considering the decision rendered in the case of Rajya Krishi Utpadan Mandi Parishad vs. ITO (supra) held that appeal of the assessee is not maintainable before the Tribunal.
In our considered view, once it is concluded that without their being corresponding appeal on the order under section 250 of the Act the appeal against the order on stay application passed by the CIT(A), is not maintainable before the Tribunal, as a corollary the Tribunal has no jurisdiction to entertain any alternate claim/plea raised in such appeal, be it a direction to CIT(A) to consider the stay application of the assessee.
Thus, in the light of our above findings and decisions referred we hold that the present appeal by the assessee against the order of CIT(A) in not entertaining stay application is not maintainable before the Tribunal, when no corresponding appeal under section. 250 of the Act is pending before the Tribunal for the relevant assessment year.
In the result, appeal by assessee is dismissed being not maintainable.
Order pronounced in the open court on Thursday the 09th day of June, 2022.