By Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants
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24 Pancard Clubs Ltd. vs DCIT
ITAT Mumbai `C’ Bench
Before S. V. Mehrotra (AM) and
D. K. Agarwal (JM)
SA No. 235/Mum/2009
A.Y.: 2004-05 and 2005-06. Decided on: 18.12.2009
Counsel for assessee / revenue: S. E. Dastur, Nitesh Joshi
and D. V. Lakhani / Vikram Gaur
Proviso to s. 254(2A) — Tribunal can stay the proceedings
before the AO in exercise of its incidental powers as well as in view of the
proviso to S. 254(2A)—The Tribunal disposed the stay application by directing
the AO to pass the assessment order by 31.12.2009 in accordance with law, but
not to serve the same on the assessee; and, thus, not to give effect to the same
for a period of six months from the date of passing of its order or till date of
passing of the appellate order by the Tribunal, whichever is earlier.
Per S. V. Mehrotra:
Facts :
For the assessment years 2004-05 and 2005-06, the CIT passed
orders u/s 263 of the Act directing the AO to: (i) Tax the advances towards sale
of room nights by the assessee from its card members under the Holiday
Membership schemes, in the year in which such advances are received; and (ii)
Not allow deduction for the provision in respect of the prorata amount relatable
to the difference between the offer price and the surrender value.
The assessee preferred an appeal to the Tribunal against the
orders passed by CIT u/s 263 of the Act. The appeals filed by the assessee came
up for hearing on 15.12.2009, but the Tribunal adjourned the hearing to
24.3.2010 to await the decision of the Special Bench constituted in Chennai in
the case of Mahindra Holiday Resorts Ltd.
The AO was required to complete the assessment proceedings by
31.12.2009 to give effect to the orders of the CIT. As a result of the said
additions/disallowances, there would be an addition to the total income of Rs
195,07,77,400, thereby creating a huge demand against the assessee. Accordingly,
the assessee filed an application for stay of the assessment proceedings before
the AO.
Held:
It is trite law that the Tribunal can stay the proceedings
before the AO in exercise of its incidental powers as well as in view of the proviso to s. 254(2A). The Tribunal noted that
similar power had been exercised by the Tribunal in the case of M/s Reliance
Communications Infrastructures Ltd. in S.A. No. 135/M/2009, for the assessment
year 2004-05, vide its order dated 24.4.2009. The Tribunal directed the AO to
pass the assessment order by 31.12.2009 in accordance with the law, but not to
serve the same on the assessee; and, thus, not to give effect to the same for a
period of six months from the date of its order or till the date of passing of
the appellate order by the Tribunal, whichever is earlier.
Cases referred to:
1 ITO vs M. K. Mohammed Kunhi, 71 ITR 8265 (SC)
2 Lipton India Ltd. vs ACIT, (1994) 95 STC 216 (Mad)
3 State of Andra Pradesh vs V.B.C. Fertilisers & Chemicals
Ltd., (1994) (2) ALT 487.
4 M/s. Reliance Communications Infrastructure Ltd. vs ACIT,
(S.A.No.133/M/09)
