Law: Income Tax Act, 1961

Section: 254

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of (Power to grant stay) - Assessment years 2008-09 and 2009-10 - Whether Appellate Tribunal can extend stay granted earlier beyond period of 365 days from date of grant of initial stay, on an application made by assessee/appellant to extend stay and on being subjectively satisfied that delay in disposing of appeal within a period of 365 days from date of grant of initial stay, is not attributable to appellant/assessee, and that assessee is not at fault - Held, yes - Whether, however, it does not mean that widest powers are given to Appellate Tribunal to extend stay indefinitely; all efforts should be made by Appellate Tribunal to dispose of such appeals in which stay has been granted as far as possible within total period of 365 days from date of grant of initial stay and Appellate Tribunal shall grant priority to such appeals over appeals in which no stay is granted - Held, yes - Whether while passing such order of extension of stay, Appellate Tribunal is required to pass a speaking order on each application and after giving an opportunity to representative of revenue - Held, yes [Paras 5.4 to 5.6] [In favour of assessee] FACTS â–  The revenue filed writ petition challenging the order passed by the Tribunal in stay applications in pending appeals extending stay of demand granted earlier beyond the period of 365 days. â–  It was submitted that in view of section 254(2A), more particularly second proviso and third proviso to section 254(2A), any extension of stay and/or granting of stay or demand beyond the period of 365 days is absolutely illegal, wholly without jurisdiction and contrary to section 254(2A). HELD â–  It is true that as per third proviso to section 254(2A), if such appeal is not so disposed of within the period allowed under the first proviso, i.e., within 180 days from the date of the stay order or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the…