Tribunal has the power to stay proceedings to give effect to s. 263 revision order. Plea as to jurisdiction of AO/CIT, even if given up, can always be raised

CIT vs. ITAT (Delhi High Court)

The CIT passed an order u/s 263 by which he set-aside the assessment order and directed the AO to frame a fresh assessment. The assessee challenged the s. 263 order in a Writ Petition. The Court directed the CIT to pass a fresh order u/s 263. The assessee challenged the High Court’s verdict in the Supreme Court. In the meanwhile, the CIT passed the s. 263 order and so the assessee withdrew the SLP before the Supreme Court and filed an appeal before the Tribunal. The assessee also filed a stay application that a stay may be granted to prevent the AO from giving effect to the revision order as there would be multiplicity of proceedings if the AO passed a fresh assessment order which would be futile if the appeal was allowed. The Tribunal granted stay of the assessment proceedings pending before the AO and also directed production of papers relating to initiation of the s. 263 proceedings. The department filed a Writ Petition to challenge the order of the Tribunal on the ground that (a) as the assessee had challenged the initiation of the s. 263 proceedings before the High Court & Supreme Court and then withdrawn the challenge (SLP), it was estopped from arguing the point before the Tribunal and (b) the Tribunal has no power to stay the assessment proceedings. HELD dismissing the Petition: