Legislative Interference in Tribunal’s Judicial Discretion to grant stay of demand – ‘Courtesy’ Finance Act, 2020

Somil-Agarwal-removebg-preview

Dr. Rakesh Gupta, FCA, FCS, AICWA, MBA, LLM, PhD
Ex Member, Income Tax Appellate Tribunal
rakesh@taxindia.net
Somil Agarwal, ACA, ACS, ACMA, DISA, LLM (U.K.)
somil@taxindia.net

Preface & Introduction

Present time may not be the best time to discuss a recently introduced depressing attempt & regressive amendment made to section 254(2A) of the Income Tax Act, 1961 by the Legislature, given an all pervading state of despondency due to the spread of COVID -19 pandemic. The spanner thrown by the legislature this time & enacted by the Finance Act, 2020 is in the form of yet another fetter (this time much more substantive & ‘lethal’) on the judicial power of the Income Tax Appellate Tribunal (hereinafter called ‘tribunal’) to grant stay of tax demands.

We could not resist ourselves from dealing and discussing about this latest ‘onslaught’ for the reason that inevitable situations would emerge in near future whereby the tax demands raised would be coerced to be recovered by the tax department from the tax payers who would obviously run for the cover of ‘Stay of demand’ more so in view of dried up financial liquidity due to economic crisis generated by the pandemic, & preceded the by unprecedented lockdown. Tribunal in view of such amendment would find itself in tight spot even in bonafide cases when it may be constrained to ask the tax payers to at least cough out 20% of the tax demands!

Legislative ‘apathy’, Proactive Tax Administration & so-called ‘efficacious’ remedy of stay?:

(i) Post-Assessment stay of demand! 

We all know that tax demands are raised in assessment followed up by vigorous & coercive recovery actions made by the tax administration. Revenue collection targets are assigned & that too at numerically higher figures than such targets set in the preceding year unmindful of the ground reality of falling GDP rate in the economy. Entire machinery is mobilised proactively by the tax administration in that direction.

Assessments ideally are expected to be made by the assessing officers in fair, reasonable, just, objective & in conscientious manner. But, those who are associated with the processes of assessments would vouch for the presence or absence of these fast fading elements in the entire process & ultimate outcome. Appellate system against such assessment orders is though robust but is not fast paced for variety of reasons. Recovery system is unleashed which, most of the times, outsmart and outpace the appellate mechanism. Targets of collection given are major driving force contributing to this situation, leaving thus with no effective & efficacious way to seek, avail & grant stay of demand in the interregnum.

In the name of ‘stay of demand’, there is sub-section (6) of section 220 in the Act, according to which discretion is vested in the assessing officer to treat the assessee as not being in default in respect of the disputed amount of tax etc. during the pendency of first appeal subject to such conditions which are warranted in the circumstances to be imposed by him.

Let us examine, on the ground level, as to the efficacy of this power of the assessing officer & corresponding so called right of the tax payer to seek stay of demand. In the backdrop of such factual scenario, as explained a little earlier, whereby assessments are made ‘the way’ they are made followed by pressure to effect recovery, question as to what extent an assessing officer may exercise his discretion contained in sub section (6) of section 220 objectively is not far to answer. Is it not too much to expect high standards of fairness and objectivity from the same assessing officer who has been responsible, not a very long ago, for making the ‘fair & objective’ assessment order? Unfortunately, that is what the statute made this much of law in the Income Tax Act, 1961 to seek stay of demand raised in assessment. There is no statutory remedy available to the taxpayers seeking stay of demand after assessment, barring the provision of sub section (6) of section 220, the real efficacy of which itself is shrouded in the ocean of uncertainty.

To approach the Range officer or Jurisdictional Commissioner against the action or inaction of the assessing officer is also not of much avail in practical life, as everybody in the chain of hierarchy is bothered more about the revenue collection targets. Remedy by way of writ is not always feasible for the small and medium class tax payers.

Power to deal with stay application is guided by the Board’s administrative circulars and Instructions. Until 2016, there was no quantitative guideline available to the assessing officers in this regard. CBDT through its Office Memorandum F. No.404/72/93-ITCC dated 29.02.2016 prescribed interalia that stay of demand can be granted subject to payment of 15% of the demand. Later on, this quantitative guideline was revised and figure of 15% was raised to 20% through Office Memorandum F. No.404/72/93-ITCC (FTS: 284146) dated 31.07.2017. It became the thumb rule that either pay this much percentage of tax demand or else grant of stay (!) is a distant dream. Question as to what extent the decision of Supreme Court in the case of L.G. Electronics India P Ltd, referred elsewhere also in this article, has been successful to inculcate a sense of objective proportionality in those who matter, can be debated ad infinitum. Where high pitch assessments are made, CBDT has issued Instruction No. 17/2015 dated 09.11.2015 and a high-powered committee has been assigned the task to deal with Taxpayers’ Grievances from high pitched Scrutiny Assessment. Again, the practical experience in this regard too is farther than pleasant, echoed further by the displeasure shown by the then CBDT Chairman though his letter dated 4.7.2018 addressed to Principal Chief Commissioners published on 5.7.2018 on itatonline.org under the caption ‘CBDT chief slams High-Pitched Assessment Committee For Inaction…”.

(ii) Commissioner of Income Tax (Appeal)!!

Similarly, in the matter of Appellate Commissioner’s power to grant stay, the Income Tax Act, 1961 has woefully remained silent. Such power of the first appellate authority was not and is not yet recognised under the statutory provisions of the Income Tax Act, 1961.

Protagonists may argue that it was not required when such power was already recognized by the Courts. There is no dispute or quarrel from this fact that Courts did recognize such power in the appellate authority. Reference may be made to the case of Debasish Moulik vs. DCIT 231 ITR 737, 739 (Cal) which was definitely a case in connection with the power of Appellate Commissioner. Though, there was other decision also available, such as in the case of M.K. Mohammad Kunhi, 71 ITR 815 (SC) but that decision was in the context of Appellate Tribunal. Be that as it may, there is still no good ground as to the absence of any specific legislative recognition of that power under section 251 of the Income Tax Act, 1961. It goes without saying that section 251 is though quite vocal code in itself while dealing with the powers of the Commissioner (Appeals) but interestingly, it is deafeningly silent in the matter of power of stay.

Absence of explicit codification of such power has fallout. As seen in actual practice, that despite judicial recognition of the existence of such power to grant stay with Commissioner (Appeals), First appellate authorities are reluctant, if permitted to say, rather non-indulgent in the matter of dealing and disposing the petition for grant of stay. This appears to be done due to ostensible absence of statutory recognition of this power under the statute, and also on this premise that let the aggrieved tax payer knock at the door of the Jurisdictional Commissioner of Income Tax. Such approach of the first appellate authority leaves even the judicial recognition of this power as ineffective and dead letter of law.

(iii) Income Tax Appellate Tribunal!!!

a) Finance (No.2) Act, 1998 with effect from 1.10.1998 inserting sub section (7) to section 253 as under: 253. Appeals to the Appellate Tribunal. ……………………. (7) An application for stay of demand shall be accompanied by a fee of five hundred rupees.…….………

In so far as the power to grant stay vested in the tribunal is concerned, legislature remained steadfastly silent till the time, Finance (No. 2) Act 1998 enacted subsection (7) to section 253 recognising statutorily the power of tribunal to deal with & grant stay by using the above mentioned words.

This state of affairs remained so despite the fact that Hon’ble Supreme Court through its decision rendered way back in the year 1968 in the case of Income Tax Officer vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC) judicially recognized that the Tribunal had power to grant stay as an incidental and ancillary power to its appellate jurisdiction. Later on Hon’ble Andhra Pradesh High Court in the case of ITO vs. Khalid Mehdi Khan (1977) 110 ITR 79 (AP) went to the extent of recognizing & conceding this power in the matter of stay of any proceeding, let alone stay of demand, to the tribunal. Surprisingly, even after the lapse of almost 30 years & 20 years respectively, from the dates of above pronouncements, statutory recognition as to tribunal’s power in the matter of stay was expressed scantily in the form of sub section (7) of section 253. It was too oblique, indirect & remote by just providing merely, miserly & miserably that an application for stay of demand shall be accompanied by a fee of Rs. 500. Was this not a really strange way to recognise statutorily that the tribunal has got power to deal & dispose with the issue of stay?

      b) Finance Act, 2001, with effect from 1.6.2001 inserting two provisos to section 254 (2A) as under:

Provided that where an order of stay is made in any proceedings relating to an appeal filed under sub-section (1) of section 253, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order;

Provided further that if such appeal is not so disposed of within the period specified in the first proviso, the stay order shall stand vacated after the expiry of the said period.

It may please be seen from the above that first, limitation was imposed in the year 2001 that tribunal shall dispose an appeal within a period of 180 days where stay of demand has been granted and if appeal is not so disposed within this time frame, stay order would stand vacated. This restriction was not so much on the power of the tribunal in the matter of judicial discretion as much it was in regard to the putting time limit within which the order ought to be passed by the tribunal in the stay granted matters. Anyway, this was the beginning of the unending legislative intervention in the judicial function of the tribunal.

       c) Finance Act, 2007 with effect from 1.6.2007 substituting the existing provisos with the following three provisos to section 254(2A) as under:

Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order:

Provided further that where such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; so, however, that the aggregate of the period originally allowed and the period or periods so extended or allowed shall not, in any case, exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed:

Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, the order of stay shall stand vacated after the expiry of such period or periods.

The above amendment in the year 2007 was to the effect that tribunal can grant stay for a maximum period of 180 days, within which appeal be disposed. There was nothing new in this as this existed since 2001. However, it was provided that if appeal is not so disposed within such period without there being any reason attributed to the assessee, tribunal may extend the stay for further period so as not to exceed beyond total 365 days and appeal shall be disposed within such period so extended. It was further provided that if appeal is still not disposed, stay shall stand vacated.

Legislative interference reached to the next level as can be seen from the plain reading of the amendment. Such intervention however became the subject matter of challenge in writ jurisdiction before Hon’ble Bombay High Court in the case of Narang Overseas (P) Ltd vs. ITAT & Others 295 ITR 22 (Bom) interlalia on the ground that amended provision to say that stay would stand vacated after the expiry of 365 days under all circumstances was unreasonable and thus unconstitutional as it does not take into account a situation where there was no fault of the assessee due to which the matter could not be disposed in 365 days. Hon’ble High Court observed & held:

Did the section as it stood before the Finance Act of 2007, and after the Finance Act of 2007, exclude the power of the Tribunal to grant interim relief after the period provided in the proviso? Was it the intendment of Parliament that the Tribunal even in a case where the assessee was not at fault should be denuded of its incidental power to continue the interim relief granted and if so what mischief was it seeking to avoid? The mischief if and at all was the long delay in disposing of proceedings where interim relief had been obtained by the assessee. The second proviso as it earlier stood, in a case when in an appeal interim relief was granted, if the appeal was not disposed of within 180 days provided that the stay shall stand vacated. The proviso as it stood could really have not have stood the test of non-arbitrariness as it would result in an appeal being defeated even if the assessee was not at fault, as in the meantime the Revenue could proceed against the assets of the assessee. The proviso as introduced by the Finance Act, 2007 was to an extent to avoid the mischief of it being rendered unconstitutional. Once an appeal is provided, it cannot be rendered nugatory in cases were the assessee was not at fault.

The amendment of 2007 conferred the power to extend the period of interim relief to 360 (sic-365) days. Parliament clearly intended that such appeals should be disposed of at the earliest. If that be the object the mischief which was sought to be avoided was the non-disposal of the appeal during the period the interim relief was in operation. By extending the period Parliament took note of laws delay. The object was not to defeat the vested right of appeal in an assessee, whose appeal could not be disposed off not on account of any omission or failure on his part, but either the failure of the Tribunal or acts of revenue resulting in non-disposal of the appeal within the extended period as provided. Can it then be said that the intention of Parliament by restricting the period of stay or interim relief upto 360 (sic-365) days had the effect of excluding by necessary intendment the power of the Tribunal to continue the interim relief? Would not reading the power not to continue the power to continue interim relief in cases not attributable to the acts of the assessee result in holding that such a provision would be unreasonable? Could Parliament have intended to confer the remedy of an appeal by denying the incidental power of the Tribunal to do justice? In our opinion for reasons already discussed it would not be possible to so read it. It would not be possible on the one hand to hold that there is a vested right of an appeal and on the other hand to hold that there is no power to continue the grant of interim relief for no fault of the assessee by divesting the incidental power of the Tribunal to continue the interim relief. Such a reading would result in such an exercise being rendered unreasonable and violative of Art. 14 of the Constitution. Courts must, therefore, construe and/or give a construction consistent with the constitutional mandate and principle to avoid a provision being rendered unconstitutional…………………………………..

12. We are of the respectful view that the law as enunciated in Kumar Cotton Mills (P) Ltd. (supra) should also apply to the construction of the third proviso as introduced in s. 254(2A) by the Finance Act, 2007. The power to grant stay or interim relief being inherent or incidental is not defeated by the provisos to the sub-section. The third proviso has to be read as a limitation on the power of the Tribunal to continue interim relief in case where the hearing of the appeal has been delayed for acts attributable to the assessee. It cannot mean that a construction be given that the power to grant interim relief is denuded even if the acts attributable are not of the assessee but of the revenue or of the Tribunal itself. The power of the Tribunal, therefore, to continue interim relief is not overridden by the language of the third proviso to s. 254(2A). This would be in consonance with the view taken in Kumar Cotton Mills (P) Ltd. (supra). There would be power in the Tribunal to extend the period of stay on good cause being shown and on the Tribunal being satisfied that the matter could not be heard and disposed of for reasons not attributable to the assessee.

Thus, High Court read down the third proviso & held that there would still be power in the Tribunal to extend the period of stay on good cause being shown if the tribunal was satisfied that the matter could not be heard and disposed of for reasons not attributable to the assessee. This was despite the sweeping expression used in the proviso.

      d) Finance Act, 2008 with effect from 1.10.2008 substituted the above mentioned third proviso only, as under:

Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee.

Then came the above substituted third proviso in the year 2008 which provided, ostensibly to overcome the above mentioned judicial decision of Bombay High Court in the case of Narang Overseas P Ltd., supra, that stay shall stand vacated after the expiry of the abovementioned period even if the delay in disposal of appeal was not attributable to the assessee. Legislative intervention became more brazen this time staring at the face of the decision of Bombay High Court, supra.

Such amendment was bound not to have remained unchallenged & in fact was challenged before Delhi High Court. Their Lordships in Pepsi Foods Pvt. Ltd. vs. Assistant Commissioner of Income Tax & Anr (2015) 376 ITR 0087 (Delhi) struck down the above amended 3rd proviso to section 254 (2A) of the Act on the ground that it seeks to obliterate the distinction between the ‘well-behaved’ tax payer and not so ‘well behaved’ one and thus treats two un-equals as equal. Hon’ble Court held that clubbing of these two classes of persons together by the legislature in the amended third proviso has led to hostile discrimination against the ‘well-behaved’ assessee to whom the delay was not attributable. Thus, attempt & interference of the legislature to provide that stay would stand vacated even if the delay was not attributable to the assessee, was struck down as unconstitutional.

Interestingly & incidentally, third proviso to section 254(2A) even though struck down as unconstitutional is still adorning the statute & has not been removed by the legislature from the statute, even though some other amendment was made in the year 2020 through the Finance Act. Such third proviso still exists on the statute despite such proviso having been found afoul on constitutional touchstone, perhaps waiting for the final words to come from the highest court of the land before it is consigned to the dustbin of history.

       e) Finance Act, 2020 with effect from 1.4.2020 modifying the three provisos to section 254(2A) as under:

Provided that the Appellate Tribunal may, after considering the merits of the application made by the assessee, pass an order of stay in any proceedings relating to an appeal filed under sub-section (1) of section 253, for a period not exceeding one hundred and eighty days from the date of such order subject to the condition that the assessee deposits not less than twenty percent of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof and the Appellate Tribunal shall dispose of the appeal within the said period of stay specified in that order:

Provided further that no extension of stay shall be granted by the Appellate Tribunal, where such appeal is not so disposed of within the said period of stay as specified in the order of stay, unless the assessee makes an application and has complied with the condition referred to in the first proviso and the Appellate Tribunal is satisfied that the delay in disposing of the appeal is not attributable to the assessee, so however, that the aggregate of the period of stay originally allowed and the period of stay so extended shall not exceed three hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed. Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated 

Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee.

(‘Amendments’ made in bold by the authors)

The discussion made so far has in fact been set out as a precursor to the real discussion to follow now in regard to the power vested in the tribunal to grant stay, smitten by constantly intermittent statutory pinpricking & interventions. Latest amendment made by the Finance Act, 2020 puts this time some more substantive statutory fetter on the power of the tribunal to grant stay.

The recent amendment reproduced above, more brazen than the past ones in our opinion, made by the Finance Act, 2020 seeks to provide a condition that Tribunal may grant stay of demand but not before assessee deposits not less than 20% of the amount of tax, interest, fee, penalty, or any other sum payable under the provisions of this Act, or furnishes security of equal amount in respect thereof.

Before discussing further, it may be recalled at this stage rather it is relevant to do so, that Income Tax Appellate Tribunal which was set up in the year 1941 celebrated its 79th Foundation Day on 24th & 25th January, 2020. While participating in a session titled as ‘Expectations of Stakeholders from ITAT’ presided by none other than his Lordship Mr. Justice A.K. Sikri, the representative of CBDT speaking on behalf of the Board being one of the stakeholders, put forth the expectation that while granting stay of demand, tribunal should not grant absolute stay of demand but should insist 20-30% of the demand to be paid. Reference to this is being made as it is in the public domain & has bearing on the discussion to follow on the recent amendment.

At this suggestion/ expectation, Hon’ble Mr. Justice Sikri in the capacity of the chairman of the discussion panel, repelled this suggestion stoutly on the spot, in the light of, though without referring Hon’ble Supreme Court in the case of M.K. Mohammed Kunhi (supra), but recalling his own experience first as Judge of the High Courts and later as a judge of the Supreme Court that stay of demand is not granted by the tribunal in a routine and mechanical way, but judicial decision is taken by the tribunal to grant stay with or without conditions having regard to various consideration such as strong prima facie nature of the case, balance of convenience, financial position and so on and so forth. His Lordship was lavish in his praise for the tribunal for its yeoman service to the cause of the nation by discharging its judicial function ably, objectively and dispassionately in all these years. Who would have anticipated, that hardly after a week’s time, almost identical proposal would surface in the Finance Bill?

At this stage, it goes without saying that tribunal like its function to dispose appeal, undertakes the stay petitions also with the same amount of seriousness and reaches at the conclusion after hearing both the sides, whether to grant stay in a particular case after considering the well settled principles contained in this regard. Such objectivity with which tribunal disposes the stay petitions was noticed by Hon’ble Courts too several times.

We are reminded of the celebrated decision of Hon’ble Supreme Court in the case of Income Tax Officer vs. M.K. Mohammed Kunhi (1969) 71 ITR 815 (SC) wherein it was interalia held by the Apex court:

It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It will only be when a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions, and the stay will be granted in most deserving and appropriate cases where Tribunal is satisfied that entire purpose of appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of appeal Hon’ble Delhi High Court in the case of CIT II vs. Maruti Suzuki (India) Limited (2014) 362 ITR 215 (Delhi) in para 22 have observed that

“…Grant of stay by the tribunal is not a matter of right, but is decided by a speaking order, recording prima facie view on merits. In case there is an error or the tribunal has erred in granting stay, revenue is not without remedy and can approach the High court in accordance with law”

Hon’ble Delhi high court in the case of Pepsi Foods Pvt. Ltd. vs. Assistant Commissioner of Income Tax & Anr (2015) 376 ITR 0087 (Delhi) in para 18 of its order referring the decision of the Supreme Court in the case of M.K. Mohammed Kunhi, supra, have observed that:

“These words of the Supreme Court were indeed prophetic, as can be discerned from the data which has been referred to by a division bench of this court in Maruti Suzuki (India) Limited (supra) which shows that in less than 10% of the appeals filed by assessees, the tribunal has granted stay orders…”

Therefore, when power to grant stay was part of the appellate jurisdiction being judicial function as held in the case of M.K. Mohammed Kunhi, supra, when stay granted by the tribunal is not given mechanically as recognized by the Higher Courts on more than one occasion, when there is remedy by way of writ to approach the higher courts in case order of the tribunal giving stay is not acceptable to the Revenue, what was the imperativeness or rather overzealousness on the part of legislature to jump the gun & enact such law which is nothing but amounting to the interference in the tribunal’s appellate function of dispensation of justice. At the top of it, nothing is oozing out from the Memorandum in this regard as to what has prompted the legislature for undertaking this adventurism.

In such circumstances, in our considered opinion such legislative intervention & overreach would not, & in fact ought not to, stand to the test of constitutional parameters. In any case, such amendment be read down at least to this extent that such limit be not interpreted as absolute and at best, it is recommendatory. Legislature, as discussed earlier, even when tried to curtail the time limit for disposal of appeal in stay granted matters, courts had repelled such attempts in the past. How can such latest legislative attempt to tinker & meddle into the substantive power of the tribunal in discharging its judicial function be tolerated & condoned by the Courts? Such legislative misadventure if remaining unchecked may unfold into more unsavoury attempts.

Apart from the above, following questions & anomalous situations may emerge due to such amendments which would seek & at times may elude answers:

  1. CBDT Office Memorandum dated 29.2.2016 as modified later in the year 2017, prescribed the payment of 20% of tax demand before stay is granted by the assessing officer. When such prescription reached up to Supreme Court in the case of Principal CIT vs. L.G. Electronics India P Ltd. civil appeal no. 6850/2018 dated 20.7.2018, Hon’ble Supreme court ruled that it will be open to the authorities on the facts of individual cases to grant deposit orders of lesser amount than 20%. In the face of such binding order coming from the highest court whereby the lower authorities can grant stay in appropriate cases on payment of less than 20% of the tax demand, latest amendment to section 254(2A) to make it mandatory for the tribunal to ensure the payment of 20% of tax etc. before stay is granted by the tribunal, would not tantamount to undermine the majesty of tribunal in comparison to the majesty of the authorities below?
  2. Even CBDT Office Memorandum dated 29.2.2016 lists out the exceptions whereby stay is envisaged to be granted by the lower authorities on payment of less than 15%/20% whereas the latest amendment to section 254(2A) being absolute, closed and totalitarian does not prescribe any such exception! ?
  3. How would Tribunal wade through & overcome the absolute, closed & totalitarian amendment, in a situation where any issue qua which stay is sought, is covered in favour of the tax payer, by the order of High Court or Supreme Court or by the order of the tribunal in assessee’s own case in earlier or subsequent year(s)? Even this situation was taken as an exception of the above referred Office Memorandum!
  4. What if the tax demand is qua issues which are on account of apparent errors not rectified or stubbornly refused to be rectified keeping the rectification applications as pending, by the authorities on or before the stay petition filed before the tribunal? In other words, what if there is fool-proof case in favour of the tax payer even on prima facie appreciation of the issue?
  5. Additions are made, for instance, in original assessment proceeding but stand deleted in appeal. Revenue is in further appeal against such relief allowed to the tax payers which are pending to be disposed. Such additions are generally repeated by the assessing officer in assessments/reassessments made under section 153A/153C on the justification & premise of keeping the issues alive, & demands come to be computed with reference to such additions too. 20% of the amount payable in such circumstances ought not to include such amount of demand.
  6. Position of amount payable with reference to which 20% payment is envisaged in the amendment, is to be seen as on what date? Would it mean 20% of the original demand of tax etc. payable, or 20% of the demand outstanding as on the date of the stay petition? Benefit of taxes paid would be available or not or whether amount of interest under section 220(2) would further enhance the figure of amount payable?
  7. What is the meaning of the expression ‘or any other sum payable’ beside tax, interest, fee, or penalty appearing in the amended first proviso to section 254(2A)?

Such issues can further be multiplied. But we must not forget the words of Late Shri Arun Jaitley, the then Law Minister speaking at the Diamond Jubilee celebration held on 24 & 25.1.2001 at Vigyan Bhawan in New Delhi that there was a conscious decision & laudable purpose to put the Appellate Tribunal under the administrative control of the Ministry of Law & Justice, away from the Ministry of Finance, as Revenue itself is one of the two litigants before the Tribunal, so that the decisions may be taken by the Appellate Tribunal objectively without any fear or favour. Latest amendment by the Finance Act, 2020, unfortunately, belies that decision & interferes into judicial independence of the Institution of Income Tax Appellate Tribunal, certainly for no good reason.