(a) Income Tax Ordinance (XXXI of.1979)---

----Ss. 134(1)(6) & 66-A---Appeal to the Appellate Tribunal---Appeal against order passed under S.66-A of the Income Tax Ordinance, 1979-- Stay of proceedings by the Appellate Tribunal---Assessment after expiry of stay period---Recovery---Request for stay of such recovery since the matter in main appeal was sub-judice before Appellate Tribunal-- Validity---In absence of formal appeal, Appellate Tribunal was not in a position to give a finding on the issue---Stay application was against an order which was not a subject-matter of appeal---Appellate Tribunal did not have any extraordinary jurisdiction to embark upon a subject which was not directly pending before it---Order passed consequent upon the order under S.66-A of the Income Tax Ordinance, 1979 unless reached Appellate Tribunal by itself could not be considered as contiguous or ancillary or auxiliary to an order under S.66-A of the Income Tax Ordinance, 1979 so as to invoke the power of granting stay by the Appellate Tribunal---Stay application being devoid of any legal sanction was dismissed by the Appellate Tribunal.

M. A. (Stay) No.597/LB of 2001 rel.

(b) Income-tax---

----Temporary injunction, grant of---One who has the power to give a decision can also grant temporary injunction.

Naveed A. Andrabi for Appellant.

Muhammad Asif, D.R. for Respondent.

Date of hearing: 24th April, 2003.

ORDER

Miscellaneous applications for stay of demand have been filed on behalf of the assessee.

The brief facts leading to above applications are that the assessee filed an appeal against, an order under section 66A which is pending adjudication before the ITAT. The assessee also filed an application vide M.A. (Stay) No.571 to 573/LB of 2002 through which request was made for stay of proceedings consequent to order under section 66A. The Tribunal allowed the stay and directed the Department for not proceeding in the matter till 17th February, 2003. After the expiry of the said stay order the Department initiated proceedings under section 61 in compliance whereof the assessee requested for adjournment till decision of the appeal filed before the ITAT. The Department has statedly ignored this request and have made an assessment and created demand. The order has not yet been served and a notice for payment of tax has been issued and passed on to the assessee. It is on the basis of this demand letter that the petitioner has filed miscellaneous applications for stay before us. It has been argued that since the matter in main appeal i.e. order under section 66A is sub-judice before the honourable ITAT all consequent proceedings are limbs of the main order hence the Tribunal is empowered to grant a stay for demand.

We do appreciate the circumstances obtaining on record. We have no hesitation in our displeasure on the method adopted by the Department. As stated in the absence of service of the order as well as of the demand notice how can the Department ask for payment of tax. However, in the absence of a formal appeal before us against the said order we are not in a position to give a finding on the issue. This stay application is against an order which is not a subject-matter of appeal pending before us. Furthermore, the assessee have a long line of remedies under Income Tax. Ordinance as well as the Constitution or Pakistan. We do not have any extra ordinary jurisdiction to embark upon a subject which -is not directly pending before us. In this regard section 134(6) can be referred. The same speaks as follows:--

"Notwithstanding that an appeal has been filed under, this section, tax shall, unless recovery thereof has been stayed by the Appellate Tribunal, be payable in accordance with the assessment made in the case:--

[Provided that where, recovery of tax has been stayed by the Appellate Tribunal by an order, such order shall cease to have effect on the expiration of a period of three months following the day on which it is made, unless the appeal is decided, or such order is withdrawn, by the Appellate Tribunal earlier:

Provided further that the Appellate Tribunal shall not make an order which has the effect of staying the recovery of tax beyond the period of (six) months in the aggregate.]

Above provision is to be read with section 134(1):--

"(134) Appeal to the Appellate Tribunal.--(1) An assessee objecting to an order passed by an Appellate (Additional Commissioner) under section 111 or 132, or subsection (2) of section 148, or an order made by the Appellate (Additional Commissioner) under section 156, having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee (or an order made. by an Inspecting. Additional Commissioner under section 66A) may appeal to the Appellate Tribunal against such order".

Above provision of law is self-explanatory. The Income Tax Appellate Tribunal comes into picture after an appeal has been filed by the assessee or by the Department under section 134(1). It is now within its power to modify, cancel, reject or set aside the order impugned. The Tribunal do have inherent power to grant stay of demand or of proceedings. It is a trite law that one who have the power to give a decision can also grant temporary injunction. It is for the same reason that the legislature has not provided any specific provision to that respect. It has in respect only created an embargo on the power of stay of demand by restricting it to six months in. aggregate. The Income Tax Appellate Tribunal, therefore, cannot extend its arms so as to include what is not intended by the legislation. So a combined reading of the two subsection of section 134 leads to the conclusion that an order passed consequent to the order under section 66A unless reaches ITAT by itself cannot be considered as contiguous or ancillary or auxiliary to an order under section 66A so as to invoke the power of granting stay by the Tribunal. In this regard the judgment referred by A.R. registered as M.A. (Stay) No.597/LB/2001, is distinguishable in the manner that the Assessing Officer had issued order and the same had been-served on the assessee. Furthermore, the language produced above is very clear. These miscellaneous applications therefore, are considered devoid of any legal sanction and the same are dismissed.

C.M.A./774/Tax (Trib.) Stay application dismissed.