The Commissioner of Income-tax (Appeals) has the power to grant a stay of recovery of tax as incidental or ancillary to its appellate jurisdiction.

Om Prakash, J.

1. THIS petition filed under Article 226 of the Constitution raises an important question whether the Commissioner of Income-tax (Appeals) possesses power to grant stay against recovery of tax.

2. WHEREAS the petitioner's returned income was Rs. 12,840 and Rs. 16,430 for the assessment years 1989-90 and 1991-92, he was assessed in the status of an individual at Rs. 12,97,130 and Rs. 26,18,190, respectively. Aggrieved, the petitioner filed appeals before the Commissioner of Income-tax (Appeals), Kanpur, for both the years, which are said to be still pending.

The petitioner approached the assessing authority to get the stay order, then the assessing authority stayed the demand till November 30, 1993, or till the disposal of appeals before the Commissioner of Income-tax (Appeals), whichever was earlier. The stay order stood terminated on November 30, 1993, as the appeals could not be decided till then. Thereafter, the petitioner went up to the Commissioner of Income-tax, Kanpur, seeking extension of the stay order till the decision of the appeals pending before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax rejected the prayer of the petitioner and such rejection was communicated to the petitioner by order dated March 2, 1994 (annexure 6' to the writ petition). From such communication, it appears that the Commissioner of Income-tax rejected the prayer of the petitioner "due to non-cooperative attitude" shown by the petitioner "before assessing authorities".

3. THIS is how the petitioner has come up to this court. It is submitted by learned counsel for the petitioner that no power is vested in the Commissioner of Income-tax (Appeals) to grant stay order under the Income-tax Act, 1961 (briefly, "the Act"), and, therefore, the petitioner has resorted to Article 226 of the Constitution. It is, no doubt, true that there is no specific provision in the Act or the Rules framed thereunder conferring power to grant stay on the Commissioner of Income-tax (Appeals). Ordinarily, such power should be vested in an appellate authority. The appeal is nothing but a continuation of assessment proceedings. If in the absence of power to grant stay the recovery is made during the pendency of the appeal and if the appeal is allowed in course of time, then that would cause avoidable inconvenience to the assessee. For effective adjudication of the matters and to obviate unnecessary inconvenience to the assessees, it is nothing but appropriate to confer power of granting stay on the appellate authorities. Not only in the case of Commissioner of Income-tax (Appeals), power to grant stay was not conferred even on the Appellate Tribunal prior to February 12, 1970. However, Sub-section (6) of Section 220 of the Act states that where an assessee has presented an appeal under Section 246, the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to impose in the circumstances of the case, treat the assessee as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired as long as such appeal remains undisposed of. The rationale of this provision is that an assessee should not be unnecessarily inconvenienced during the pendency of the appeal and, therefore, Sub-section (6) says that the assessee will not be treated as in default while the appeal is pending against the assessment orders. 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 clearly provides that the assessee against whom an assessment is made should not be treated as 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 necess