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CIT(A)'s order for stay of demand not appealable before ITAT

Assessee filed return seeking exemption u/s 10(20). AO rejected the claim and raised amount of tax. Assessee appealed to CIT(A), and also filed an application for stay of demand. CIT(A) rejected the application. ITAT held that CIT(A)'s order on application seeking stay of demand was not a final order, and is not appealable before ITAT.-MB-0501

1. The assessee filed its return claiming income as exempt by virtue of it being a local authority under section 10(20).

2. The AO rejected the assessee's claim and raised certain amount of tax.

3. The assessee filed appeal before the Commissioner (Appeals). During pendency of appeal, assessee filed an application for stay of demand.

4. The Commissioner (Appeals) rejected assessee's application.

5. In view of difference of opinion between the Members of the Tribunal on question as to whether order passed dismissing assessee's application for stay of demand was an appealable order or not, matter was referred to the Third Member.

6. The ITAT held as under:From the above decision it would be clear that the power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the Learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to grant stay. However, no appeal is pending before the Tribunal and there is no specific express power with the Tribunal to entertain and dispose of such appeals, so the Tribunal cannot grant the stay of collection of tax by entertaining the appeals against orders of Ld. CIT(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the Learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction.

Therefore, in my considered view, the appeal filed by the assessee against the order of Ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable. Therefore, appeals against such orders cannot be admitted and as such, are liable to be dismissed, which view has been expressed by Ld. Accountant Member with which I agree. Now, the file shall go before the regular bench for passing of consequential orders.

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IN THE ITAT LUCKNOW BENCH (THIRD MEMBER)Rajya Krishi Utpadan Mandi Parishadv.Income-tax Officer-II (2), Lucknow*U.B.S. BEDI, JUDICIAL MEMBER (AS A THIRD MEMBER)SUNIL KUMAR YADAV, JUDICIAL MEMBER AND A.K. GARODIA, ACCOUNTANT MEMBERIT APPEAL NOS. 141 TO 144 (LKW.) OF 2009 C.O. NOS. 6 TO 9 (LKW.) OF 2009[ASSESSMENT YEARS 2001-02 TO 2003-04 &amp; 2006-07]APRIL 22, 2014 CASE REVIEW Paulsons Litho Works v. ITO [1994] 208 ITR 676/76 Taxman 294 (Mad.) (para 10); Dy. CIT v.Nirma Ltd. [Special Civil Application Nos. 14644, 14648 and 14649 of 2008] (para 12); Lucknow Development Authority v. CIT [Writ Petition No. 2382 (M/B) of 2009] (para 13); Abbas Wazir (P.) Ltd. v. ITAT [1994] 205 ITR 457/[1993] 71 Taxman 439 (All.) (para 15) and Debasish Moulik v. Dy. CIT [1998] 231 ITR 737 (Cal.) (para 17) followed.CASES REFERRED TO Prem Prakash Tripathi v. CIT [1994] 208 ITR 461/75 Taxman 107 (All.) (para 6), Krishi Utpadan Mandi Samiti v. Union of India [2004] 267 ITR 460/139 Taxman 258 (All.) (para 6.1),Agrl. Produce Market Committee v. CIT [2008] 305 ITR 1/173 Taxman 115 (SC) (para 6.1),Vijay Prakash D. Mehta v. Collector of Customs [1989] 175 ITR 540 (SC) (para 9), Paulsons Litho Works v. ITO [1994] 208 ITR 676/76 Taxman 294 (Mad.) (para 10), Dy. CIT v. Nirma Ltd.[Special Civil Application Nos. 14644, 14648 and 14649 of 2008] (para 12), Lucknow Development Authority v. CIT [Writ Petition No. 2382 (M/B) of 2009] (para 13), Abbas Waxir (P.) Ltd. v. ITAT [1994] 205 ITR 457/[1993] 71 Taxman 439 (All.) (para 15) and Debasish Moulzk v. Dy. CIT [1998] 231 ITR 737 (Cal.) (para 16).P.K. Thakur, CA and P.K. Kapoor, CA for the Appellant. Manoj Kumar Gupta, CIT DR for the Respondent.THIRD MEMBER ORDER OPINION UNDER SECTION 255(4) OF THE INCOME-TAX ACT, 1961U.B.S. Bedi, Judicial Member (As a Third Member) - There being difference of opinion between the members constituting the Bench, following four questions were formulated by the members of the bench on 31.07.2009 and reference was made to the Hon'ble President u/s 255(4) for nomination of the third member."(1) Whether the CIT(A) has jurisdiction to decide the assessee's petition for stay or recovery of demand during the pendency of assessee's appeal furnished u/s 246A of the Act. ?(2) If the CIT(A) has jurisdiction to decide the assessee's petition for stay of recovery of demand, then under which provisions of law the CIT(A) will pass such an order i.e. what will be the nature or status of such order passed by he CIT(A)?(3) Whether such order (supra) passed by the CIT(A) is appealable before the Tribunal or not i.e. can such an order be appealed against before the Tribunal by way of an appeal under section 253 of the Act, or can be challenged only before the Hon'ble High Court by way of writ petition?(4) If such an order (supra) is found to be appealable before the Tribunal, then can the Tribunal entertain such an appeal against such order without there being appeal before it against the order of the CIT(A) in appeal against the order of the A.O. or other orders appealable under section 246A of the Act, as the case may be, for the reason that the CIT(A) has not preferred to decide the assessee's appeal pending before him? "2. Hon'ble President nominated me to give my opinion u/s 255(4) on the above noted questions.3. As per the questions formulated by both the members, the main crux of issue relates to, whether in the absence of any appeal, the Tribunal has any jurisdiction to entertain the appeal of the assessee against the order passed by Ld. CIT(A) on the application of the assessee for stay of recovery of demand when the appeal was pending before the first appellate authority but no appeal was pending before the Tribunal. The other questions will get answer from the main issue.4. Before adverting to the main issue it is found apt to discuss facts first, which indicate that the assessee filed return of income in response to notice issued u/s 148 of the I.T. Act, 1961 for the assessment year 2001-2002 and 2002-2003. In the said returns the assessee claimed that its income was exempt by virtue of it being a local authority u/s 10(20) of the IT. Act while for the assessment years 2003-2004 and 2006-2007 the assessee filed the returns of income claiming that it should be granted exemption u/s 11 of the IT. Act as it had complied with all the requirements e.g., filing of audited statement of accounts, the audit report in Form No. 10B and other requisite information. However, the assessment was completed by the Assessing Officer at the income of Rs.69,85,01, 110/- for AY. 2001-02, Rs.53,92,06,660/- for AY. 2002-03, Rs.41 ,63,05,910/- for AY: 2003-04 and Rs.35,27,73, 11 0/- for A.Y. 2006-07, and the Assessing Officer raised demand of Rs.51,60,27,002/- for AY. 2001-02, Rs.31,75,68,629/- for AY 2002-03, Rs.23,00,96,402/- for AY. 2003-04 and Rs.15, 78,54,146/- for A Y. 2006-07. The claim of the 'local authority' in assessment years 2001-02 and 2002-03 and the claim of exemption u/s 11 of the I.T. Act in A.Yrs 2003-04 and 2006-07 has been denied by the Assessing Officer.5. Aggrieved by the assessment orders each dated 29/12/2008 for all the aforesaid assessment years, the assessee filed appeals u/s 246-A before the Learned CIT(A). The assessee also filed application for stay of demand and requested to keep the demand in abeyance till the disposal of the appeals. The assessee also filed application for stay of demand before the Assessing Officer who issued a letter dated 30/01/2009 intimating the assessee that 50% of the demand had been stayed till 15/03/2009 or disposal of first appeal, whichever is earlier. The Assessing Officer also required the assessee to pay the remaining 50% of the demand within the time allowed u/s 156 of the Act. It was also ordered by the Assessing Officer that in case of failure the order of stay would stand vacated automatically. Against the directions of the Assessing Officer, the assessee filed Writ Petitions before the Lucknow Bench of the Hon'ble Allahabad High Court and the Hon'ble Court vide order dated 17/02/2009 in the said Writ Petitions numbered as 1659, 1660 &amp; 1662 of 2009 for the assessment year 2001-2002, 2002-2003 and 2003-2004 gave the following directions:"Accordingly, we dispose of the writ petition directing the Commissioner of Income Tax (Appeals) to decide the application for interim relief within a period of two weeks from the date of receipt of certified copy of this order without prejudiced with the order passed by this court. For a period of two weeks or till disposal of the application for interim relief whichever is earlier, further proceedings shall be kept in abeyance. The Appellate Authority is directed to decide the appeal expeditiously in terms of the above."6. In pursuance of the aforesaid directions of the Hon'ble High Court, the assessee furnished the petitions for interim relief to the Learned CIT(A). The assessee submitted before the Learned CIT(A) that it is a local authority and its income is exempt by virtue of section 10(20) of the IT. Act for the assessment years 2001-2002 and 2002-2003 while in respect of assessment years 2003-2004 and 2006-2007 it was claimed that the income was exempt u/s 11 of the Act since it was engaged in charitable activities. The assessee relied on the judgment of Hon'ble Allahabad High Court in the case of Prem Prakash Tripathi v. CIT [1994] 208 ITR 461/75 Taxman 107 wherein it had been held that appellate authority is competent to grant the stay order.6.1 The Learned CIT(A) after considering the submissions of the assessee, observed that the first appeals filed by the assessee were pending before him for the assessment years in question wherein the issues such as Jurisdiction of the Assessing Officer passing the assessment order and denial of benefit of exemption u/s 10(20) and 11 of the I. T. Act were not challenged. In respect of the assessment years 2001-2002 and 2002-2003, the Learned CIT(A) observed that the Assessing Officer had decided in the assessment year 1999-2000 that the assessee was not entitled to claim exemption under the said provision and that similar finding had been given for the assessment year 2001-2002 and 2002-2003. He also pointed out that his predecessor has held that the assessee was not a local authority but an Association of Persons for the assessment year 1999-2000, so its income could not be held to be exempt from tax either u/s 10(20) or u/s 10(29) of the I.T. Act, 1961. The Learned CIT(A) also referred to the judgments of the Hon'ble Jurisdictional High Court in the case of Krishi Utpadan Mandi Samiti v. Union of India [2004] 267 ITR 460/139 Taxman 258 (All.) wherein it was held that the Krishi Utapadan Mandi Samiti was not entitled to exemption u/s 10(20) of the Act. He also observed that a similar view had been taken by the Hon'ble Supreme Court in the case of Agrl. Produce Market Committee v. CIT [2008] 305 ITR 1/173 Taxman 115. As regards to the assessment year 2003-2004 and 2006-2007, the Learned CIT(A) pointed out that the assessee's application for registration u/s 12AA of the Act was rejected by the CIT-I, Lucknow vide order dated 29/09/2006, regarding the various case laws relied by the assessee, the Learned CIT(A) observed that those decisions were related to the computation of income u/s 11 to 13 of the Act in the case of registration having been granted u/s 12AA of the Act but the registration was not granted to the assessee for the aforesaid assessment years, therefore, those decisions were in no way relevant for granting interim relief to the assessee by way of stay of demand. The Learned CIT(A) pointed out that the Assessing Officer had given a finding that the entire receipts of the assessee were not routed through the income and expenditure account but were taken directly to the balance sheet, for that reason the Assessing Officer had made the additions while computing the income of the assessee for various years. The Learned CIT(A) was of the view that the Board's Circulars Nos. 530 and 589 relied upon by the assessee did not advance its case for stay of demand as the issue relating to the eligibility of exemption u/s 10(20) and u/s 11 of the Act had not so for been decided in favour of the assessee in any earlier assessment years, therefore, the assessee was not supported by the above cited circulars. The Learned CIT(A) held that 50% of the demand raised by the Assessing Officer for the assessment year under consideration deserves to be stayed. He accordingly stayed 50% of the demand till the disposal of appeals filed before him by the assessee provided that the balance 50% demand to be paid on or before 18/03/2009, in the failure of the above directions the order shall stand vacated automatically.7. Against the said order of the Learned CIT(A) the assessee preferred appeal before the ITAT. Now the issue to be decided is as to whether the order passed by the Learned CIT(A) on the application moved by the assessee for stay of demand is an appellate order u/s 250 against which appeal can be filed before the Tribunal u/s 253 of the I. T. Act and as to whether the ITAT can stay the demand when no appeal has been filed before it on quantum.8. Arguments of both the sides have been heard and respective orders of both the members have been considered in the light of the relevant provisions of law and precedents relied upon by rival sides before the Bench as incorporated in their respective orders. The Department in these cases has strongly relied upon the order passed by Ld. Accountant Member with the plea to agree with the opinion of Ld. Accountant Member whereas; Ld. A.R. of the assessee has strongly relied upon the order of Ld. Judicial member to plead for agreeing with the opinion of Ld. Judicial Member and both the sides have also filed their respective written submissions which are almost in line with the views taken by Ld. Accountant and Judicial Members respectively.9. After having considered rival submissions in the light of various case law cited by rival sides made before the Bench and reiterated before me in the light of relevant provisions of law, I find that Section 250 of the I. T. Act, 1961 provides for procedure in appeal which envisages that the order of CIT(A) disposing of the appeal shall be in writing and shall state the point for determination, the decision thereon and the reasons for the decision. But at the time of disposal of stay application, neither the appeal of assessee was considered by Ld. CIT(A) nor disposed of as envisaged in the relevant provisions of law. It was only the first appellate authority having passed the order, on the stay application moved by the assessee, on 05.03.2009, against which assessee has preferred appeals. It is not in dispute that powers to grant ancillary and incidental relief is there but there should be appeal. So far as right to file appeal before the Tribunal is concerned, the Hon'ble Supreme Court in the case of Vijay Prakash D. Mehta v. Collector of Customs [1989] 175 ITR 540 held as under:"the right to appeal is neither an absolute right nor an ingredient of natural justice the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant. If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of those conditions that the right becomes vested in and exercisable by the appellant."9.1 As per Section 253, it has not specifically been provided that appeal lies against the order passed by CIT(A) in a stay petition of the assessee because ancillary and incidental power is exercisable by the Tribunal only if appeal is pending. Useful reference can be made to the jurisdictional High Court decision in the case of Prem Prakash Tripathi (supra) in which it was held as under:"Law does not require that once the assessment is made, recovery of tax should be made immediately, notwithstanding the remedy of appeal having been provided in the Act. Rather, sub-section (6) of section 220 of the Income-tax Act, 1961, clearly provides that the assessee against whom an assessment is made, should not be treated as being in default so long as his appeal remains undisposed of if such is the intention of law, then it can hardly be said that the Commissioner of Income-tax (Appeals) is not vested with the powers of granting stay order, which is not only necessary but expedient for effective adjudication of the appeal. Unless there is an exclusionary provision, power to grant stay will ordinarily be deemed to have been conferred on the appellate authorities. Before rule 35A was inserted in the Income-tax (Appellate Tribunal) Rules, 1963, the Supreme Court stated that the Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. The same legal position would follow in the case of the Commissioner of Income-tax (Appeals), who is also an appellate authority like the Tribunal. Hence the Commissioner of Income-tax (Appeals) must be held to have the power to grant stay, which is incidental or ancillary to its appellate jurisdiction. "10. In the aforesaid case, the Hon'ble court has held that the CIT(A) has the power to grant stay which is incidental or ancillary to its appellate Jurisdiction. In the instant case, there is no dispute as regards to the aforesaid proposition because the Learned CIT(A) has already granted the partial stay to the assessee but nowhere Hon'ble court has held that the Tribunal can interfere in the order of the CIT(A) for granting the stay. The ITAT can grant the stay only in its appellate Jurisdiction i.e. when the appeal is pending before it. Similarly in the case of Paulsons Litho Works v. ITO[1994] 208 ITR 676/76 Taxman 294, the Hon'ble Madras High Court has held as under:"The Supreme Court in ITO v. M. K. Mohd. Kunhi [1969] 71 ITR 815 held that the Appellate Tribunal had powers to stay collection of tax even though there was no specific provision conferring such power on the Tribunal. This power of the Tribunal was considered to enure to the Tribunal even during the pendency of a reference made to the High Court under section 256 of the Income-tax Act, 1961. This decision has remained undisturbed either on account of any subsequent decision to the contrary or a statutory amendment to the Act. The Supreme Court had approved the principle that the power of the appellate authority to grant stay was a necessary corollary to the very power to entertain and dispose of appeals. This lends credence to the general principle that wherever the appellate authority has been invested with power to render justice and prevent injustice, it impliedly empowers such authority also to stay the proceedings, in order to avoid causing further mischief or injustice, during the pendency of the appeal. The powers of the appellate authority exercising powers under section 251 are as wide in their content and amplitude when compared to that of the Tribunal under section 254. Consequently, the ratio of the decision of the Supreme Court in ITO v. M. K. Mohd. Kunhi[1969] 71 ITR 815 would squarely apply. The appellate jurisdiction conferred under section 251 impliedly grants the power of doing all such acts or employing such means as are essentially necessary to its effective exercise and the statutory conferment of the appellate power carries with it the duty and obligation as well, in proper cases, to make or grant such orders for stay of the order under Challenge in appeal or staying of any or all further proceedings pursuant to the said order, pending disposal of the appeal before the appellate authority. The fact that provisions have been made under the Act to confer power upon the Income-tax Officer under section 220(6) to treat the assessee concerned as not in default, during the pendency of an appeal under section 246 or upon the Tax Recovery Officer under section 225(1) to grant further time or postpone the payment of the tax to be recovered, is no substitute to the power of stay, which was considered by the Supreme Court to be a necessary adjunct to the very powers of the appellate authority. The powers conferred on the Income-tax Officer and the Tax Recovery Officer cannot be equated to the powers of the appellate authorities, either in their nature, quality or extent or vis-a-vis the hierarchy. "11. In the above noted case, it has been held that power of appellate authority to grant stay was a necessary corollary to the very power to authority to dispose of appeals. So, the same tends credence to the general principle that wherever the appellate authority has been invested with power to render justice and prevent injustice, it impliedly empowers such authority also to stay the proceedings, in order to avoid causing further mischief or injustice, during the pendency of the appeal. So, the emphasis is on the pendency of appeal which means, when the appeal is pending, the proceedings and other ancillary relief can be granted. No doubt that no appeal is pending before the Tribunal, so the Tribunal is not empowered to entertain an appeal in exercising of its ancillary and incidental powers to dispose of the appeal.12. Similarly the Hon'ble Gujarat High Court in the case of Dy. CIT v. Nirma Ltd., while deciding the Special Civil Application No. 14644, 14648 and 14649 of 2008 wherein the preliminary objection was raised on behalf of the respondent assessee to the effect that instead of challenging orders of the Tribunal by way of Writ Petitions, the petitioners (Revenue department) was required to prefer tax appeals as provided by section 260A of the I.T. Act, 1961. The Hon'ble High Court, vide order dated 26/12/2008 while rejecting the petitions, has held as under:"3. On going through Provisions of Section 260A of the Act, it is apparent that an Appeal shall lie against an order made by the Tribunal in Appeal. The orders under challenge have been made in respective Stay Applications filed in related Appeals filed by the respondent - assessee before the Tribunal. Therefore, on a plain reading the preliminary objection deserves acceptance.4. Accordingly, without entering into merits of the controversy, the petitions are rejected on the limited count, leaving it open to the petitioners to avail the statutory remedy of Appeal, if the petitioners so desire. The petitions are accordingly rejected. Registry to place copy of this order in all connected matters. "12.1 From the above it would be clear that the appeal shall lie against an order made by the Tribunal in appeal. Similarly in the present case also, the appeal shall lie to the Tribunal against the order made by the CIT(A) in appeal and since the orders under challenge have been made in the stay applications filed in related appeals pending before Ld. CIT(A) at the relevant time, the appeal shall not lie against the said orders because the disposal of stay application is not a final order passed by the Learned CIT(A) in appeal filed before him u/s 246A of the Act. So this judgment of the Hon'ble Gujarat High Court is against the assessee and does not favour it.13. Another judgment dated 06/03/2009 passed by the Hon'ble Jurisdictional High Court in the case of Lucknow Development Authority v. CIT in Writ Petition No. 2382 (M/B) of 2009 placed at page No. 95 to 97 of the assessee's compilation was also relied by the learned counsel for the assessee. In the said order the Hon'ble Jurisdiction High Court has held as under:"The appellate Authority has exercised statutory jurisdiction by passing appropriate order and it is not open for this Court to interfere under Article 226 of the Constitution of India. More so, when the appeal is pending for disposal. So far as petitioner's submission with regard to the allegation that the appellate authority has not provided opportunity of hearing is concerned, we are of the view that the Appellate Authority should decide the application dated 02.3.2009 expeditiously preferably within period of one week after providing due opportunity of hearing. The appellate authority is also directed to decide the appeal itself expeditiously within two months. "14. In the aforesaid judgment also it has been held that it was not open for the Hon'ble High Court to interfere with the Article 226 of the Constitution of India when the appeal is pending for disposal before the appellate authority. In the present case also the appeal is pending before the Learned CIT(A) so the Tribunal cannot entertain the appeal against the order passed on the stay application moved by the assessee because there cannot be two appeals on the same issue pending before the appellate authority i.e. the CIT(A). So considering the totality of the facts as discussed herein above, the decisions relied by the learned counsel for the assessee are of no help to the assessee.15. On a similar issue the Hon'ble Jurisdictional High Court in the case of Abbas Wazir (P.) Ltd. v.ITAT [1994] 205 ITR 457/[1993] 71 Taxman 439 (All.) has held as under:"A perusal of sections 256 and 260 of the Income-tax Act, 1961, shows that, while applications under section 256(1) or 256(2) are pending, the Tribunal retains the appellate power and it does not become functus officio as, after the decision by the High Court or the Supreme Court, it has to pass necessary orders in conformity with those judgments. Once it is held that the Tribunal retains its appellate power during the pendency of an application under section 256(1) or (2), the necessary consequence is that it possesses all the incidental or ancillary powers of appellate jurisdiction. It is a well-established view of law that the power to grant stay orders is incidental and ancillary to the appellate jurisdiction. In view of this, where an application has been moved under section 256(1) of the Act or an application is pending under section 256(2), the Tribunal has power to grant stay in appropriate cases. Where an application under section 256(2) is pending before the High Court, the High Court has no power to grant stay in that proceeding, but the Tribunal still retains the power to grant an interim order."16. Similarly, the Hon'ble Calcutta High Court in the case of Debasish Moulik v. Dy. CIT [1998] 231 ITR 737 has held as under:'That the appellate authority before whom the appeal was pending had the power to grant stay of the demand in the appeal pending before him. Therefore, the petitioner should be relegated to avail of the said remedy before invoking the Jurisdiction of the High Court under article 226 of the Constitution of India."17. From the above decision it would be clear that the power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the Learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to grant stay. However, no appeal is pending before the Tribunal and there is no specific express power with the Tribunal to entertain and dispose of such appeals, so the Tribunal cannot grant the stay of collection of tax by entertaining the appeals against orders of Ld. CIT(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the Learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction.18. Therefore, in my considered view, the appeal filed by the assessee against the order of Ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable. Therefore, appeals against such orders cannot be admitted and as such, are liable to be dismissed, which view has been expressed by Ld. Accountant Member with which I agree. Now, the file shall go before the regular bench for passing of consequential orders.ORDER UNDER SECTION 255(4) OF THE INCOME TAX ACT, 1961 1. Pursuant to the order of the Third Member appointed by the Hon'ble President, Income Tax Appellate Tribunal to adjudicate certain questions formulated by the Members on difference of opinion on certain points and as per the majority view we hold that the appeals of the assessee against the order of the Ld. CIT(A) passed on application of the assessee for grant of stay of tax demand, are not maintainable, therefore, the appeals against such orders cannot be admitted and as such are liable to be dismissed. Accordingly appeals of the assessee stand dismissed.2. Since the appeals are not maintainable, the cross objections filed by the Revenue are also not maintainable and hence the same are dismissed.2.1 In the result, appeals of the assessee and cross objections of the Revenue are dismissed.

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1. The assessee filed its return claiming income as exempt by virtue of it being a local authority under section 10(20).2. The AO rejected the assessee's claim and raised certain amount of tax.3. The assessee filed appeal before the Commissioner (Appeals). During pendency of appeal, assessee filed an application for stay of demand.4. The Commissioner (Appeals) rejected assessee's application.5. In view of difference of opinion between the Members of the Tribunal on question as to whether order passed dismissing assessee's application for stay of demand was an appealable order or not, matter was referred to the Third Member.6. The ITAT held as under:From the above decision it would be clear that the power to grant stay of collection of tax is an inherent and incidental power of the appellate authority for the effective exercise of appellate powers. Since in the instant case the regular appeal of the assessee is pending before the Learned CIT(A) i.e. the first appellate authority at the time of passing of order on stay petitions so, he has the power to grant stay. However, no appeal is pending before the Tribunal and there is no specific express power with the Tribunal to entertain and dispose of such appeals, so the Tribunal cannot grant the stay of collection of tax by entertaining the appeals against orders of Ld. CIT(A) for stay of recovery . In other words, the Tribunal cannot interfere with the order passed by the Learned CIT(A) in his inherent and incidental power of its appellate Jurisdiction.Therefore, in my considered view, the appeal filed by the assessee against the order of Ld. CIT(A) passed on applications of the assessee for grant of stay of tax demand, are not maintainable. Therefore, appeals against such orders cannot be admitted and as such, are liable to be dismissed, which view has been expressed by Ld. Accountant Member with which I agree. Now, the file shall go before the regular bench for passing of consequential orders.

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CIT(A)'s order for stay of demand not appealable before ITAT