Law: Income Tax Act, 1961

Section: 254,271(1)(c)

(a) Income-tax--- ----Stay of recovery proceedings---Penalty---Tribunal rejecting application for stay of recovery proceedings during pendency of appeal---Not justified--- Tribunal to consider application on basis of accepted judicial principles--­Indian Income Tax Act, 1961, Ss. 254 & 271(1)(c). The Tribunal has got implied power of staying the recovery proceedings during the pendency of the appeal but this power cannot be exercised in a routine way or as a matter of course. Where the Tribunal rejected the application of the assessee for stay of the recovery proceedings in respect of penalty imposed on him during the pendency of the second appeal before it: Held, that the Tribunal had only vaguely mentioned that all the conditions for grant of stay had not been complied with whereas it referred only to one condition that the liquidity position of the assessee had not been clearly spelt out. None of the reasons mentioned in the impugned order by the Tribunal for rejection of stay application was judiciously justified. The assessee may move a second application for stay and the Tribunal shall consider the same afresh on the basis of accepted judicial principles. (b) Writ--- ---- Extraordinary jurisdiction---Reasons recorded by judicial authority opposed to judicial canons---High Court can give proper directions to judicial authority---High Court does not normally interfere in orders passed by judicial authority in pending proceedings. Normally, the High Court does not interfere in matters passed by the judicial authority in a pending judicial proceeding but when the reasons recorded by the judicial authority are opposed to judicial canons the High Court has no alternative except to give proper direction to the judicial authority so that it may not only act correctly in the case under judicial review but also in similar other cases with a view to prevent injustice to litigants. I.T.O. v. M.K. Muhammad Kunhi (1969) 71 ITR 815 (SC) ref. JUDGMENT This writ petition is directed against the order dated September 30, 1994, whereby the Income-tax Appellate Tribunal, Allahabad, rejected the application of the petitioner for stay of the recovery proceedings in respect…

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