ISKCON Charities Hare Krishna Hill V. Additional Commissioner of Income Tax Exemptions and Commissioner of Income Tax-14

WP/9302/2015

AI Insights

The case involves ISKCON Charities, represented by trustee Sri Ramakrishna, challenging an order by the Additional Commissioner of Income Tax, which treated the assessee as 'an assessee in default' due to non-compliance with a stay order on an assessment demand. The assessment order disallowed a claim of Rs. 20 Crores related to a compromise with M/s. Harini Properties, treating it as income. The petitioner appealed against the stay application rejection and the default order, seeking relief under Article 226 of the Constitution. The court, considering the ongoing appellate proceedings, directed a partial compliance (deposit of Rs. 50 lakhs) to facilitate a timely hearing of the appeal.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 670992 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-03-2015
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: M V SESHACHALA; VANI
• Keywords: Appeal; Assessment Order; Default; Income Tax; Stay of demand
• Section: 226

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19th DAY OF MARCH, 2015 BEFORE THE HON’BLE MR.JUSTICE ARAVIND KUMAR WRIT PETITION NO.9302/2015 (T-IT) BETWEEN: M/S ISKCON CHARITIES HARE KRISHNA HILL WEST OF CHORD ROAD RAJAJINAGAR BENGALURU-560 010 REPRESENTED BY THE TRUSTEE SRI RAMAKRISHNA K S/O SRI KANNAIAH C AGED ABOUT 43 YEARS. ... PETITIONER (BY SRI M.V. SESHACHALA, SR. COUNSEL A/W SMT. VANI H, ADVOCATE) AND: 1. ADDITIONAL COMMISSIONER OF INCOME TAX EXEMPTIONS RANGE, 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU-560 001. 2. COMMISSIONER OF INCOME TAX-14 LARGE TAX PAYERS UNIT JSS TOWERS, 100 FEET RING ROAD BANASHANKARI III STAGE BENGALURU-560 085. ...RESPONDENTS (BY SRI JEEVAN NEERALGI, ADVOCATE) 2 WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 18.02.2015 ISSUED BY THE R-1 VIDE ANNEXURE-N. THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: O R D E R Heard Sri M V Seshachala, learned Senior Counsel appearing on behalf of Smt.Vani H appearing for petitioner and Sri Jeevan Neeralgi, learned Standing Counsel for respondents. 2. Petitioner being aggrieved by assessment order dated 28.03.2014 (Annexure-B) filed an appeal before Commissioner of Income Tax (Appeals)-V, Bangalore vide Annexure-D and an application for stay of the demand notice also came to be filed. After considering the contentions raised by the appellant, appellate authority has stayed assessment order subject to assessee depositing Rs.6 Crores in five instalments as 3 per order dated 17.06.2014 (Annexure-G). Same was not deposited by the assessee. However, a sum of Rs.3 Crores came to be deposited. On account of non- compliance of the order of stay, assessee was treated as “an assessee in default’ by order dated 18.02.2015 (Annexure-N) passed by first respondent. Being aggrieved by said order dated 18.02.2015, appeal came to be filed by petitioner and application for stay also came to be filed before Commissioner of Income Tax (Appeals)-14, Bangalore. Said authority by order dated 03.03.2015 (Annexure-P) rejected the stay application which is also impugned in the present writ petition along with order dated 18.02.2015 passed by first respondent. 3. It is not in dispute that appellate authority is seized of the matter and contentions raised by petitioner is under adjudication by it. Perusal of the assessment order would indicate that assessing officer has 4 disallowed the claim of Rs.20 Crores which is said to have been paid by the assessee by virtue of a compromise entered into with M/s.Harini Properties before Civil Court in pending O.S.No.6040/2009 and has treated said amount as income of the assessee. In view of the fact that said amount has been paid by the assessee on account of compromise entered into with M/s.Harini Properties, issue which requires to be examined, as to whether it should be treated as income of the assessee or otherwise, by the appellate authority. Hence, this Court is of the considered view that ends of justice would be met if petitioner – assessee is directed to deposit further sum of Rs.50 lakhs on or before 31.03.2015 and on such amount being deposited, first appellate authority shall hear the appeal No.ITA No.439/Trust/CIT(A)14/14-15 (Annexure – D) on merits and in accordance with law expeditiously. In the event of petitioner failing to deposit amount of Rs.50 lakhs on 5 or before 31.03.2015, respondent-authorities would be at liberty to proceed further for enforcing the order at Annexure-N. Ordered accordingly. Writ petition stands disposed of. No opinion is expressed on the merits of the case. Sd/- JUDGE *sp "