Facts of the Case

The present writ petitions were filed by the Revenue (Principal Commissioner of Income Tax-8) challenging the extension of an interim stay order granted by the Income Tax Appellate Tribunal (ITAT) in favor of M/s Samsung India Electronics Pvt. Ltd.

The Revenue contended that the ITAT had extended the interim stay beyond the statutory limit of 365 days, which is expressly restricted under Section 254(2A) of the Income Tax Act, 1961.

Issues Involved

  1. Whether the ITAT has the authority to extend an interim stay beyond 365 days under Section 254(2A) of the Income Tax Act, 1961.
  2. Whether such extension is valid when the delay in disposal is not attributable to the assessee.

Petitioner’s Arguments (Revenue)

  • The Revenue argued that Section 254(2A) clearly restricts the extension of stay beyond 365 days.
  • It was contended that the ITAT exceeded its jurisdiction by extending the stay beyond the prescribed statutory period.
  • The continuation of stay beyond 365 days is impermissible regardless of the circumstances.

Respondent’s Arguments (Assessee)

  • The respondent relied upon settled legal precedent.
  • It was argued that where delay in disposal of appeal is not attributable to the assessee, the stay can be extended beyond 365 days.
  • Reliance was placed on judicial interpretation of Section 254(2A).

Court’s Findings / Order

The Delhi High Court held that the issue raised by the Revenue is already settled by its earlier judgment in:

Pepsico Foods Pvt. Ltd. vs ACIT (376 ITR 87)

The Court observed that the matter is covered by the said precedent and therefore found no merit in the Revenue’s contention.

Accordingly:

  • The writ petitions were dismissed.
  • All pending applications were also disposed of.

Important Clarification

The judgment reinforces that:

  • Extension of stay beyond 365 days is permissible when delay is not attributable to the assessee.
  • Section 254(2A) must be interpreted in light of judicial precedents, particularly Pepsico Foods Pvt. Ltd. vs ACIT.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:7906-DB/SRB26032019CW29152019_161100.pdf

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