DHL Express (India) P Ltd vs. ACIT (ITAT Mumbai)

DATE: (Date of pronouncement)
DATE: December 9, 2010 (Date of publication)

Click here to download the judgement (dhl_express_stay_application.pdf)

Stay Application in Tribunal maintainable despite non-filing of stay petition before lower authorities

The assessee filed an application in the Tribunal seeking stay on recovery of demand of Rs. 7.05 crores raised pursuant to the order of the Dispute Resolution Tribunal. The stay application was filed without approaching the lower authorities for stay. The department, relying on RPG Enterprises Ltd vs. DCIT 251 ITR 20 (AT) (Bom), opposed the application on the ground that the assessee ought to have approached the lower authorities first so that “the department would get an opportunity to study the situation and gather the necessary data for evaluating the application for stay and may also get an opportunity in protecting the interests of the Revenue”. HELD rejecting the objection:

There are differences in the approach of the Tribunal on whether the tribunal can be directly approached for stay of demand without approaching the lower authorities. In view of the decision in Broswel Pharmaceutical Inc vs ITO 83 TTJ 126 (All) it is not mandatory on the part of the assessee to move application before the Revenue Authorities for granting of stay of outstanding demand. Accordingly, there is no merit in the argument of the department that the stay application should be rejected outright since the assessee has not moved any petition before the Revenue Authorities seeking stay of the demand. Seeking stay before the lower authorities is directory and not mandatory.

See Also: Susanta Kumar Nayak vs. UOI 185 ITR 627 (Cal), Nagarjuna Fertilzers vs. DCIT 80 ITD 218 (Hyd) & Reuters India 3 SOT 886 (Del) where the same view has been taken.

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