Section 254(2A)

Section 254(2A) — the law in short

What the courts have decided on section 254(2A), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• DCIT v Pepsi Foods Ltd Supreme CourtHelps taxpayer
  Your Tribunal stay lapsed at 365 days through no fault of yours. Is that constitutional?
  No. The third proviso to s.254(2A), which vacated a stay after 365 days even where the delay was not attributable to the assessee, violates Article 14. A stay now vacates only where the delay is attributable to you.
• CIT v Tata Teleservices (Maharashtra) Ltd High CourtHelps taxpayerNo later treatment found
  My ITAT stay has crossed 365 days and the appeal is still not decided. Can the Tribunal extend it?
  Yes, where the delay is not attributable to you. The Bombay High Court held that the Tribunal retains the power to extend a stay beyond 365 days despite the substituted third proviso to s.254(2A), because the power to grant interim relief must be read as coextensive with the power to grant final relief under s.254(1).
• Hindustan Unilever Ltd v DCIT ITATCuts both ways
  Every issue in my Tribunal appeal is covered in my favour. Can the Tribunal grant an unconditional stay without my paying 20%?
  Not an unconditional one. After the Finance Act 2020 amended the first proviso to s.254(2A), the Tribunal may grant stay only on the condition that the assessee deposits not less than twenty per cent of the tax, interest, fee, penalty or other sum payable, or furnishes security of equal amount. But the deposit is not a condition precedent: the assessee may instead furnish security, and what constitutes reasonable security is for the Tribunal to decide. Stay was granted on security of Rs.35 crores against a demand of about Rs.172.48 crores.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.