MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER.---In the instant case the appeal against stay order of the learned CIR(A-III), Karachi has been filed whereby the learned CIR(A) granted conditional stay till 7.2.2014 vide order bearing C.No,CIR(A-II)2014/75 dated 27.1.2014 subject to payment of 25% of the tax demands
2. Further the applicant has also filed miscellaneous application for stay of demand before this Tribunal praying for grant of unconditional stay. The contents of the Application are reproduced as under:-
1. The taxation office has issued a notice dated 21-11-2013 for compliance on 25-11-2013 for monitoring of with-holding taxes for the tax year 2012 to the applicant. This notice was received by our above applicant on 19-12-2013 and we had applied for an adjournment of this hearing on same day. Subsequently, upon visit of the taxation officer we were informed that an order has been passed against the applicants on 30-11-2013 with a demand of Rs, 41,660,980/-
2. The order passed by the assessing officer was in haste and have not even considered the reply filed by the applicant explaining its legal position.
3. The order passed by the assessing officer was in haste and have not even considered the reply filed by the applicant explaining its legal position.
4. The appellant being aggrieved is filing an appeal against the aforesaid order with your good office.
5. That the aforesaid income tax demand is based on wrong interpretation of law and is against the fact of the case and the applicant is confident that the said impugned tax demand will be totally deleted yin appeal as the applicant has strong case of relief.
6 The assessing officer also has intended to initiate to recover the impugned tax demand of Rs,41,660,980/- and issued notice under section 138(1) of the Income Tax Ordinance, 2001 by issuance of notice of recovery vide notice No, DCIR/Unit05/WHT-Zone RTO- II/Khi/2012-13/240 dated 21.11.2013.
7. That if the tax demand is paid by the applicant at this stage it will create financial hardship for the applicant and will result in irreparable loss to the applicant that would not be recoverable in future.
8. That the applicant has prima facie an arguable case and the payment of impugned income tax demand may cause substantial loss to the applicant."
3. The learned counsel for the applicant submitted that the CIR(A) was not justified to grant the stay order against condition of 25% payment of the demand till 07.2.2014. As the main appeal is pending before the CIR(A) for disposal and it is every likelihood that the applicant would get relief from him. Learned counsel further submitted that demand may create hardship for the appellant.
He further submitted that applicant has not given any consent regarding payment of balance amount as ordered by the learned CIR(A) in his order. He further submitted that 25% payment would aggravate the company's position and the Department is taking proceedings for recovery of the 25% demand by issuing Notice under sections 137 and 138 of the Ordinance for recovery of the said demand and pressing hard to recover the same.' Lastly the learned counsel argued that on the facts and circumstances of the case, the Hon'ble Tribunal would appreciate that the impugned order needs to be recalled as the payment of 25% would cause undue and severe hardship to the appellant. He also argued that pending adjudication of the appeal before the CIR(A), the appellant submits that the Hon'ble Tribunal may graciously grant stay of demand and issue directions to the concerned tax authorities in this regard. He further submitted that he has a good prima facie case for grant of stay till the main issues are decided by the learned CIR(A).
4. None appeared on behalf of the department despite service of notice. Therefore, the matter is taken up for order on merits.
5. We have heard the learned counsel for the applicant and carefully perused the relevant record.
The relevant extract from the order of the learned CIR(A) granting conditional stay is reproduced hereunder:-- "The comparative study of impugned order vis-a-viz the grounds/ written submission filed by you reveal issues in the impugned order are debatable. Therefore the undersigned is inclined to opine to direct you to pay at least 25% of the tax demand then balance tax will be stayed till 07.02.2014."
6. We are of the considered view that powers to grant interim relief is a judicial or at least quasi- judicial in nature and the matter of stay is purely of discretion in nature of the authority. At this moment we may observe that the powers of the CIR(A) are of the widest amplitude in dealing with appeals before It. It is trite law that the CIR(A) has the powers of granting stay as well as during the pendency of the appeal before it. As per provisions of law, the stay may be granted for a limited and specified period as in-built in the provisions of law. However, considering the fact that the Department is initiating proceedings against the taxpayer, therefore, we direct the taxpayer to file fresh application of stay within a week before the CIR(A) and the CIR(A) is also directed to consider the application judicially, judiciously and after application of conscious mind in accordance with the provision of law under section 128(1A) and facts, circumstances and grounds of main appeal. It is also directed to the CIR(A) to take up the main appeal within a week and to decide and dispose of the appeal and issue the appellate order within (30) thirty days from the receipt of this order.
The stay Application for grant of stay to be disposed of within three days from filing thereof However, the applicant / appellant would not seek any adjournment and the appeal may be decided strictly in accordance with the provisions of law after providing reasonable opportunity of being heard. It may be pointed out that there is no provision in the Income Tax Ordinance, 2001 to grant conditional stay, if the applicant fulfills all the ingredients as envisaged under section 128(1A) the stay may be granted by the CIR(A). The learned CIR (A) is directed to comply with the above directions in letter and spirit. The ATIR (Tribunal) has ruled in 1996 PTD (Trib.) 388 that its judgments are binding on the appellate authorities subordinate to the Tribunal under hierarchy of judiciary.
7. Consequently, appeal as well as miscellaneous application for stay of demand stand disposed of as above.