By TIOL News Service

CHANDIGARH, APRIL 11, 2018: THE ISSUE BEFORE THE BENCH IS - Whether separate application by Revenue against stay granted by Tribunal, only to show resentment and displeasure, when main appeal is already decided, is not sustainable and warrants imposition of cost. AND THE ITAT VERDICT IS YES.

Facts of the case

The Assessee, a tennis association of Chandigarh, filed return for the relevant AY claiming exemption u/s 11 of the Act. However, the AO rejected the exemption claim of the Assessee and issue demand for tax. On Assessee's appeal, the CIT(A) upheld the decision of the AO. In the meantime, the AO made request to the Assessee to make the payment of outstanding demand. However, the Assessee informed that it had filed an appeal against the order of the CIT(A) along with an application for stay of demand before the Tribunal.

However, in the absence of any documentary evidence like the Stay order, the bank account of the Assessee was attached and the outstanding demand was recovered. Thereafter, the Tribunal granted exparte stay against the recovery of the demand till the disposal of the appeal. Thereafter, main appeal along with Stay Application came for hearing before the Tribunal, upon which final arguments were heard and the case had been reserved for orders and no separate arguments on the stay application had been addressed by either of the parties fully knowing that the said application would become infructuous on the disposal of the appeal.

On hearing the parties, the Tribunal held that,

++ on each and every date of hearing, fresh orders for maintaining status quo were passed. In view of this, since the period of operation of the orders has already passed, the Tribunal will be astonished to know how the vacation of the stay order dated 15.2.2017 and 28.4.2017 the period of operation of which was upto 4.5.2017 and 22.5.2017 respectively, at this stage, will in any manner of any help to the department. The vacation of order dated 15.2.2017 or of 28.4.2017 at this stage will not absolve the concerned officer/s of their act of violation of order during the subsistence of the order;

++ the assessing officer in her application for condonation of delay with covering letter dated 20.2.2018 has referred to various dates of hearings stating that she was waiting for the disposal of the Misc. Application filed by the assessee against violation of the order dated 15.2.2017. This shows that the concerned ITO (E) was aware of the subsequent orders of stay/status quo, then why the application for vacation of two orders only has been filed is not understandable. The department officials fully knowing that no useful purpose will be served either by moving the present application and even knowing that the present application was infructuous and non-maintainableeven on the date of its filing, not only filed this application, but also insisted for arguments despite that the hearing on the main appeal had already been concluded on a previous date. The only motive behind this application is to confront and show resentment and displeasure to this Tribunal for granting interim stay against recovery in this matter;

++ the wording of the opening part of the application for vacation of stay clearly reveals that the Department is showing her resentment not only about the passing of ex-parte interim stay order but also towards the directions of the Tribunal for directing her to refund the amount illegally recovered. The Department, in case it is aggrieved of any order passed by the Tribunal, instead of approaching the higher forum, has now a days chosen the course of showing open defiance of, disrespect of or of open resentment to orders of the Tribunal, which may prove be very dangerous for the sanctity of the courts of law/Justice dispensation system of the country. Such observations are in view of the some other cases also where the Department has either violated the Stay orders or come with applications for vacation of stay orders despite the fact the representatives of the Department itself making requests for adjournments. When being asked, the only explanation comes that as 31st March is approaching, they have to achieve their targets of the tax collection. The Tribunal would also like to caution the concerned officers that this type of conduct of open resentment against the judicial orders may also compel us to initiate and recommend to the High Court for appropriate action under the contempt of courts Act;

++ the department has chosen to file and contest the preset application fully knowing that the same is frivolous, infructuous, not maintainable and in fact redundant with the only motive to openly show resentment against the passing of stay orders by the Tribunal, instead of challenging the same before the higher judicial authorities. This application is therefore dismissed with costs of Rs. 20,000/- to be deposited in Prime Minister's Relief fund within 15 days of receipt of the copy of this order.

(See 2018-TIOL-532-ITAT-CHD)