Facts of the Case:

The petitioner, Toluna India Private Ltd., filed a writ petition seeking the extension of stay regarding the assessment order for the assessment year 2008-09. The petitioner had appealed before the Income Tax Appellate Tribunal (ITA No. 6407/Del/2012) concerning the assessment order. The Tribunal had initially granted a stay on the demand raised, subject to certain conditions, which the petitioner complied with. However, the stay expired after 365 days as per the decision of a Division Bench of the Delhi High Court in CIT v. Maruti Suzuki (India) Ltd. The petitioner was unable to seek further extensions from the Tribunal, and thus approached the High Court.

Issues Involved:

  • Whether the Delhi High Court can extend the stay granted by the Income Tax Appellate Tribunal beyond 365 days?
  • Jurisdiction of the Tribunal to extend the stay as per CIT v. Maruti Suzuki (India) Ltd.

Petitioner’s Arguments:

  • The petitioner argued that it was in the interest of justice to extend the stay granted by the Tribunal as the appeal was still pending, and the delay was not attributable to the petitioner.
  • The petitioner submitted several orders by the Delhi High Court where similar reliefs were granted.

Respondent’s Arguments:

  • The respondent, Director of Income Tax (Investigation) Circle 12(1), contended that as per the decision in CIT v. Maruti Suzuki (India) Ltd., the Tribunal had no authority to extend the stay beyond 365 days, and thus the petitioner should follow due process.

Court Order/Findings:

The Court concluded that there is no bar for granting an extension of stay in appropriate circumstances under Article 226 of the Constitution. It ruled in favor of the petitioner and extended the stay until the appeal was disposed of by the Tribunal, thereby ensuring that the Tribunal's conditional stay remains in force.

Important Clarification:

The court clarified that under Article 226 of the Constitution, the High Court has the power to extend the stay initially granted by the Tribunal, provided the circumstances and justice so warrant. This judgment reaffirmed the principles laid down in CIT v. Maruti Suzuki (India) Ltd..

Section Involved:

  • Article 226 of the Constitution of India: The Court exercised its jurisdiction under Article 226 to provide relief to the petitioner by extending the stay.

Link to Download the Order: https://delhihighcourt.nic.in/app/case_number_pdf/2015:DHC:2375-DB/BDA11032015CW23572015.pdf

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