INCOME TAX OFFICER vs M.K. MOHAMMED KUNHI

The Supreme Court held that the Appellate Tribunal has the power to stay the recovery of penalties imposed under Sections 271(1)(c) and 274(2) of the Income-tax Act, 1961, as an incidental power to its appellate jurisdiction. The Court clarified that while the Income-tax Officer lacks the authority to stay recovery during an appeal, the Tribunal can exercise this power in appropriate cases to prevent the appeal from being rendered ineffective. The judgment of the Kerala High Court was upheld, affirming the Tribunal's ability to grant stays under its judicial powers.