Section 255

Section 255 — the law in short

What the courts have decided on section 255, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• ITO v M.K. Mohammed Kunhi Supreme CourtHelps taxpayer
  My appeal is pending before the Tribunal and recovery of the demand is going on. Can the Tribunal stay recovery when no section gives it that power?
  Yes. The Supreme Court held that the Tribunal has the power to stay recovery as incidental or ancillary to its appellate jurisdiction. No provision confers it expressly, and the statutory stay in section 220(6) is available only while an appeal is pending before the first appellate authority, not the Tribunal. But an express grant of statutory power carries by necessary implication the authority to use all reasonable means to make the grant effective, and the wide powers in section 254(1) carry with them everything incidental and necessary to make their exercise fully effective - including, in proper cases, orders preventing a successful appeal from being rendered nugatory.
• Statutory position — rule 24 of the ITAT Rules, 1963: the Tribunal may dispose of the appeal on merits when the appellant does not appear, it may not dismiss it for default, and the proviso gives it the power to recall CBDT Circulars & InstructionsCuts both ways
  My appeal was called on a day my counsel was in another court and the Tribunal passed an order against me without hearing anybody on my side. Can that order be recalled, and under what?
  Under the proviso to rule 24, and it is expressed as a duty rather than a discretion. Rule 24 of the Income-tax (Appellate Tribunal) Rules, 1963, headed 'Hearing of appeal ex parte for default by the appellant', provides that where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent. The proviso then provides that where an appeal has been disposed of as provided above and the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called on for hearing, the Tribunal shall make an order setting aside the ex parte order and restoring the appeal. Rule 25 is the mirror image for a default by the respondent. What the rule does not permit is a dismissal for want of prosecution: the only course open on non-appearance is disposal on merits after hearing the other side.

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.