Sudershan Prasad Bagaria, Kolkata vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH: KOLKATA [Before Shri Mahavir Singh, JM & Shri B. P. Jain, AM]

S.P. No. 21/Kol/2015 I.T.A No.927/Kol/2014 Assessment Year: 2009-10 Sudershan Prasad Bagaria Vs. Commissioner of Income-tax, Kol-XV, (PAN: ADFPB4376A) Kolkata. (Applicant) (Respondent)

Date of hearing: 01.05.2015 Date of pronouncement: 01.05.2015

For the Applicant: Shri N. M. Bansali, Advocate For the Respondent: Shri Sanjay, Addl. CIT , Sr. DR,

ORDER Per Shri Mahavir Singh, JM:

By way of this Stay Application applicant/assessee seeks to stay the demand of Rs.3,73,06,470/- raised by way of assessment framed u/s. 143(3)/263 of the Income-tax Act, 1961, (hereinafter referred to as the Act) vide dated 30.03.2015, against which appeal before CIT(A) is pending.

2. Ld. Counsel for the assessee Shri N. M. Bansali, Advocate narrated that this demand is raised in consequence to the revision order passed by CIT u/s. 263 of the Act, the appeal against which is pending before ITAT since 2014 in ITA No. 927/Kol/2014 filed on 09.05.2014. Ld. Counsel for the assessee stated that number of times this appeal against revision order passed by CIT u/s. 263 of the Act came up for hearing but no fruitful hearing could take place and time and again the matter was adjourned. In terms of the above, Ld. Counsel for the assessee requested that no doubt the appeal against the assessment framed by AO u/s. 143(3) read with section 263 of the Act is pending before CIT(A) but Tribunal has all the powers to stay the demand.

3. On the other hand, Ld. Sr. DR Shri Sanjay stated that no appeal against the assessment framed by AO in response to revision order passed by CIT u/s. 263 of the Act is pending before Tribunal instead the same is pending before CIT(A) only. According to him, the assessee should move for stay of demand before CIT(A) only.

4. We have heard both the counsel and perused the records. We find that the Co-ordinate Bench of this Tribunal in S.P.No.45/Kol/2013 vide order dated 11.11.203 has dealt with this 2 S.P. No. 21/K/2015 In ITA No.927/K/2014 Sudershan Prasad Bagaria AY 2009-10

issue pertaining to the Stay Application with respect to order passed u/s 263 of the IT Act by the CIT. The Tribunal's adjudication read as under:-

"5. We have considered the rival submissions. A perusal of the order of the Hon'ble High Court of Calcutta in the case of Kailash Prasad Jain vs CIT, Central-III, Kolkata in ITA No.232 of 2006 dated 12.11.2010 as referred to by the ld. AR clearly shows that the Hon'ble Calcutta High Court has not held anywhere in the said order that the Tribunal has power to give a blanket stay in 263 proceedings. In fact the words used in the said decision are " The legal proposition explained by Dr.Pal would be appropriate when it would be found that the authority concerned lacks inherent jurisdiction in the subject matter". Thus admittedly if there is an absolute lack of jurisdiction when the ld. CIT passed order u/s 263, admittedly one could look towards considering whether any interim order is called for. Such lack of inherent jurisdiction has not been shown in the present case. However, a perusal of the decision of the Hon'ble Andhra Pradesh High Court in the case of ITO vs Khalid Mehdi Khan reported in 110 ITR 79 (AP) has under similar circumstances categorically held that "while granting stay or any other interlocutory order, the Tribunal shall have to keep in mind period of limitation prescribed in section 153(2A) and pass orders in light of same." The decision of the Hon'ble Delhi High Court in the case of CIT vs ITAT WP (C) No.4684 of 2010 dated 3rd August, 2012 also does not say that operation of the order u/s 263 can be stayed without taking into consideration the issue of limitation. In fact in the case before the Hon'ble Delhi High Court when the stay was granted by the Tribunal Delhi Benches of the ITAT limitation was still available. In the present case, however, granting stay of the operation of order passed u/s 263 by the ld. CIT would have an effect to make the order of the ld. CIT infractuous in so far as the limitation itself would expire for the purpose of giving effect to the order passed u/s 263.

5.1. Here we may also draw reference to an earlier stay order passed in the case of Narendra Kumar Mehta in SP No.31/Kol/2013 dated 24th May, 2013 wherein the Coordinate Bench of this Tribunal had held as follows :-

"3. It was the submission by the Id. A.R. that this stay petition is for the stay of proceedings consequent to the order passed under section 263 by Id. CIT~XIX, Kolkata for the assessment year 2005-06 vide order dated 25:03.2013: It was the submission that original assessment had been done under section 143(3), which was subject matter of 263 order dated 15.02.2010 and the. consequent order had also been passed on 06.07.2010 It was the submission that further 263 had been initiated on the same grounds. It was the submission that stay of proceedings may be granted in respect 'of the consequentially proceedings to the order passed under section 263.

4. In reply, ld. DR submitted that stay of proceedings in respect of the consequential order passed under section 263. It was the submission that once stay petition is granted, normally it operates for 180 days and another extension of 180 days could be granted resulting. a total loss of one year time. It was the submission that extension of the limitation in respect of Stay of proceedings provided in section 153 .. The Explanation 1 thereto did not permit for the exclusion in respect of. the period of limitation.' It was the submission that Stay of the proceedings should not be granted.

. . . . .

5. We have considered the rival submissions. As it is noticed· that the claim of ld. DR that the exclusion provided in the Explanation 1 to section 153 3 S.P. No. 21/K/2015 In ITA No.927/K/2014 Sudershan Prasad Bagaria AY 2009-10

does not cover the period of stay ·granted by the Tribunal, seems to be a reasonable ground expressed by the ld. D.R. and as no purpose would be served by staying proceedings in respect of giving effect to the order passed under section 263 rather than delaying in time available to the assessee to respond to the requisition by the Assessing Officer in the interest of natural justice, we are of the view that stay should not be granted in this case and the same stands dismissed. However, considering the prayer of the assessee, the assessee is granted early hearing of its appeal and the appeal of the assessee shall stand posted for early hearing on 03.07.2013. The Registry shall post the appeal of the assessee in respect of this Stay petition before the Bench on 03.07.2013. No notice shall be issued to the assessee as the date of hearing has been intimated in the open Court."

5.2. In the said decision one of us was a party to the corum of the Bench. In the circumstances the Stay Petition filed by the assessee stands dismissed. However, as the issue is in regard to the appeal filed against the order u/s 263 which is treated as priority matter, the appeal filed by the assessee in ITA No.820/Kol/2013 is directed to be posted for early hearing on 09.12.2013. The registry is directed accordingly.

6. In the result the Stay Petition filed by the assessee is dismissed. The appeal of the assessee is posted for early hearing."

5. Upon careful consideration, we find that judicial propriety demands that we must follow the precedent as above. In the present case before us, the demand is raised by way of consequential assessment order framed by AO u/s. 143(3) r.w.s. 263 of the Act vide order dated 30.03.2015, appeal against which is pending before CIT(A), and revision order framed is under challenge before Tribunal in ITA No.927/Kol/2014 appeal filed on 09.05.2014 against the revision order of CIT u/s. 263 of the Act. We feel that there is no demand pending against which the appeal lies to Tribunal. However, to avoid repetitive appeals and the appeal against revision order in ITA No.927/Kol/2014 is a priority appeal, the same should be heard on an early date. Accordingly, we direct the registry to fix this appeal on 11.05.2015. Both the parties are informed in the open court and no further notice is required to be sent to either of the parties. Accordingly, early hearing of ITA No. 927/Kol/2014 is granted on 11.05.2015 and stay is declined. In terms of the above, the stay petition of assessee is dismissed.

6. In the result, the Stay Petition filed by the assessee stands dismissed as indicated above.

Order is pronounced in the open court.

Sd/- Sd/- (B. P. Jain) (Mahavir Singh) Accountant Member Judicial Member

Dated : 1 st May, 2015

Jd.(Sr.P.S.) 4 S.P. No. 21/K/2015 In ITA No.927/K/2014 Sudershan Prasad Bagaria AY 2009-10

Copy of the order forwarded to:

1. APPELLANT - Shri Sudershan Prasad Bagaria, 3A, Hare Street, Room No. 303, Kolkata-700 001

2 Respondent - CIT, Kolkata-XV, Kolkata.

3. The CIT(A), Kolkata

4. ACIT Kolkata

5. DR, Kolkata Benches, Kolkata /True Copy, By order,

Asstt. Registrar.