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HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT SRINAGAR

Case No. WP(C) No. 2118/2025

CM No. 5604/2025

Reserved on: 15.09.2025

Pronounced on: 30.12.2025

Uploaded on: 30.12.2025

Whether the operative part or full

judgment is pronounced: Full

J&K Yateem Foundation,

Central Office: Bait-ul-Hilal

42-Al-Farooq Colony,

Jawahar Nagar, Srinagar

Through its Chairman,

Mohd. Ahsan Rather, Age 65 years

S/o M. Rustum Rather,

R/o Sir Syed Abad Bemina, Srinagar

…. Petitioner(s)/Appellant(s)

Through: Mr. Z.A. Qureshi, Sr. Advocate with

Mr. Robinder Singh, Advocate.

Vs.

1. Income Tax Appellate Tribunal,

Amritsar Branch, Amritsar

2. Income Tax Officer,

Exemption, Ward Jammu

....Respondent(s)

Through: Mr. Umar Rashid Wani, Advocate

CORAM: HON’BLE MRS. JUSTICE SINDHU SHARMA, JUDGE

HON’BLE MR. JUSTICE SHAHZAD AZEEM, JUDGE

JUDGMENT

Per: Sindhu Sharma-J

1. The petitioner claims to be a society known as “J&K Yateem

Foundation”, registered under the Societies Registration Act vide

Registration No. 3758-S of 2001 dated 12.10.2001. The petitioner was

granted registration under section 12A(1)(ac)(i) of the Income-tax Act,

1961 (hereinafter referred to as ‘the Act’) on 12.10.2021. The said

registration came to be cancelled by the Commissioner of Income-tax

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(Exemptions), Chandigarh, vide order dated 19.01.2024, purportedly in

exercise of powers under section 12AB(4)(ii) of the Act.

2. Aggrieved by the order of cancellation, the petitioner preferred an

appeal before the Income-tax Appellate Tribunal, Amritsar Bench,

registered as I.T.A. No. 56/Asr/2025. A stay application being SA No.

3/Asr/2025 was filed along with the appeal, seeking, inter alia, stay of

the operation of the cancellation order during pendency of the appeal.

3. The Tribunal, vide order dated 24.04.2025, dismissed the application

for stay on the grounds that there was no outstanding tax demand against

the petitioner and that, in the absence of any subsisting tax demand as on

date of consideration, the Tribunal had no jurisdiction to stay the operation

of the order passed by the Commissioner.

4. The contention of the petitioner is that the Tribunal has erred in

holding that it lacks jurisdiction to stay the operation of the order

appealed against, which, according to the petitioner, is contrary to the

scheme of sections 253 and 254 of the Income-tax Act, 1961.

Consequently, the petitioner seeks directions to the Tribunal to decide SA

No. 3/Asr/2025 arising out of I.T.A. No. 56/Asr/2025 afresh, along with

appropriate interim relief.

5. We have heard learned counsel for the parties.

6. The primary question that arises for consideration is whether the

Income-tax Appellate Tribunal has jurisdiction to stay the operation of an

order appealed against, even in the absence of any subsisting tax demand.

7. The power of the Income-tax Appellate Tribunal to grant stay as an

incidence of its appellate jurisdiction is no longer res integra. In “M.K.

Mohammed Kunhi v. Income-tax Officer”, [1966] 59 ITR 171 (Ker)

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the Kerala High Court examined the power of the Tribunal to stay the

order appealed against, albeit in the context of stay of demand at a time

when such power was not expressly provided for under the Act. The

Court held that even in the absence of an express statutory provision, an

appellate authority possesses the power to stay proceedings pending

appeal, such power being incidental or ancillary to the effective exercise

of its appellate jurisdiction. The Court observed as under:

“We think that the petitioner is entitled to succeed on

the first ground, and that it is unnecessary to consider

the validity of the second ground. That the power to

stay is a necessary corollary and is incidental to the

appellate power has been ruled by Rajagopala Ayyangar

J., as a judge of the Madras High Court, in

Swarnambikai Motor Service v. Wahita Motor Service

W. Ps. Nos. 427 and 438 of 1956. The short report of

the case sets out the relevant passage as follows:

"It is no doubt true that there is a distinction

between courts in the strict sense a