Parmatma Sharan Shikshan Sansthan V. The Commissioner - Income Tax (Exemptions) and Commissioner of Income Tax and Joint Commissioner of Income Tax (Exemptions) Range- Jodhpur and Asstt. Commissioner of Income Tax (Exemptions), Circle- Jodhpur and Income Tax Officer (Exemptions) and Commissioner of Income Tax \\u2013 I (Appeals), Udaipur

CW/9509/2016

AI Insights

The case involves Parmatma Sharan Shikshan Sansthan, an educational society, which challenged the orders related to the cancellation of its registration under Section 12AA of the Income Tax Act and subsequent reassessment demands for the Assessment Years 2008-09, 2009-10, and 2010-11. Initially, the society's registration was cancelled, leading to reassessment notices and orders that raised significant tax demands. The society appealed these decisions, and while the Income Tax Appellate Tribunal (I.T.A.T.) quashed the cancellation of registration, the appeals against the reassessment orders remained pending. The High Court's decision to stay the recovery of the reassessment demands was based on the pending appeals and the lack of a stay on the I.T.A.T.'s decision by the court.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 796491 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 17-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: SHARAD KOTHARI; LALIT PAREEK
• Keywords: Income tax appeal; Income Tax Exemptions; Permanent Account Number; Reassessment; Stay of demand
• Section: 147; 148; 12AA

Judgement Text

"[2023:RJ-JD:39509-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 9509/2016 Parmatma Sharan Shikshan Sansthan, 123, Central School Scheme, Officers Mess, Air Force, Jodhpur ----Petitioner Versus 1. The Commissioner - Income Tax (Exemptions), Kailash Heights, III Floor, Lal Kothi, Tonk Road, Jaipur. 2. Commissioner of Income Tax, 16, Moomal Tower, Udaipur. 3. Joint Commissioner of Income Tax (Exemptions) Range- Jodhpur, Aaykar Bhawan, Paota C Road, Jodhpur. 4. Asstt. Commissioner of Income Tax (Exemptions), Circle- Jodhpur, Aaykar Bhawan, Paota C Road, Jodhpur. 5. Income Tax Officer (Exemptions), 6, New Fatehpura, Udaipur. 6. Commissioner of Income Tax – I (Appeals), Udaipur ----Respondent For Petitioner(s) : Mr Sharad Kothari Mr Lalit Pareek For Respondent(s) : Mr K.K.Bissa HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Judgment 17/11/2023 1. This writ petition is filed by the petitioner-society being aggrieved with the order dated 18.07.2016, whereby the respondent No.1 disposed of the applications filed by the petitioner-society and instead of staying the entire outstanding [2023:RJ-JD:39509-DB] (2 of 5) [CW-9509/2016] demand has ordered for deposit of 15% of the outstanding demand in a phased manner. 2. Brief facts of the case are that the petitioner-society is engaged in imparting education in the field of Engineering and Technical Education and registered under the Rajasthan Societies Registration Act. The petitioner-society is a regular assessee under the Income Tax Act, 1961 (hereinafter referred to as ‘the Income Tax Act’) possessing Permanent Account Number. The petitioner- society is also registered under Section 12AA of the Income Tax Act and in relation to that a certificate has also been issued by the respondent on 13.09.2006. The petitioner-society filed its income tax return for the Assessment Years 2006-07 and 2007-08 while claiming income exemption in view of the certificate of registration under Section 12AA of the Income Tax Act. The petitioner-society has further filed its income tax return for the Assessment Years 2008-09, 2009-10 and 2010-11 claiming income exemption from income tax in view of the registration under Section 12AA of the Income Tax Act. 3. The respondent No.1 cancelled the registration of the petitioner-society under Section 12AA of the Income Tax Act vide order dated 12.11.2014 with immediate effect. The petitioner- society filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as ‘I.T.A.T.’) while challenging the order dated 12.11.2014, whereby the registration of it under Section 12AA of the Income Tax Act has been cancelled. 4. After cancellation of the registration of the petitioner-society under Section 12AA of the Income Tax Act, the respondent No.3 assessing authority reopened the assessment for the Assessment [2023:RJ-JD:39509-DB] (3 of 5) [CW-9509/2016] Years 2008-09, 2009-10 and 2010-11 by issuing notices under Section 147/148 of the Income Tax Act. The petitioner-society has failed to submit its response to the said notices and the respondent No.5 has finalized the reassessment proceedings ex parte by passing reassessment order dated 28.03.2016 for the Assessment Years 2008-09, 2009-10 and 2010-11, whereby huge demand is raised. 5. Being aggrieved with the reassessment orders, the petitioner-society preferred appeals before the Commissioner of Income Tax (Appeals) and the said appeals are pending consideration till date. However, in the meantime, the petitioner- society approached the respondent No.5 by way of filing applications seeking stay of demand generated vide reassessment orders dated 28.03.2016 but the respondent No.5 dismissed the said applications and the petitioner-society was directed to deposit entire outstanding demand along with interest for Assessment Years 2008-09, 2009-10 and 2010-11. Being aggrieved with the same, the petitioner-society approached the respondent No.1 by way of filing applications, however, the said applications came to be disposed of by the respondent No.1 by passing the impugned order dated 18.07.2016. 6. As noted earlier, against the order dated 12.11.2014, whereby the registration of the petitioner-society under Section 12AA of the Income Tax Act has been cancelled, the petitioner- society has already preferred an appeal before the I.T.A.T. and the I.T.A.T. has quashed and set aside the order dated 12.11.2014. 7. This fact has also been confirmed by the learned counsel for the respondents. Learned counsel for the respondents has further [2023:RJ-JD:39509-DB] (4 of 5) [CW-9509/2016] informed that against the order of the I.T.A.T., whereby it has quashed the order dated 12.11.2014, the respondent preferred D.B. Income Tax Appeal No.44/2017 before this Court, wherein this Court after formulating substantial question of law has admitted the appeal and the same is pending consideration till date. Mr Bissa, learned counsel for the respondents has fairly conceded that no stay is granted by this Court in D.B. Income Tax Appeal No.44/2017. 8. It is also to be noticed that from the tenor of the reply filed on behalf of the respondents, it appears that the reassessment proceedings for the Assessment Years 2008-09, 2009-10 and 2010-11 have been initiated against the petitioner-society for the reason that its registration under Section 12AA of the Income Tax Act has been cancelled. However, now when the order dated 12.11.2014, whereby the registration of the petitioner-society under Section 12AA of the Income Tax Act has been quashed by the I.T.A.T. and the appeal against the order of the I.T.A.T. is subject to challenge before this Court in the Income Tax Appeal, wherein no stay is granted, we are of the view that the entire outstanding demand created against the petitioner-society pursuant to the reassessment orders is liable to be stayed till the disposal of the appeals filed by the petitioner-society against the reassessment orders for the Assessment Years 2008-09, 2009-10 and 2010-11 before the Commissioner of Income Tax (Appeals). However, at the same time, the Commissioner of Income Tax (Appeals) is also expected to decide the appeals filed by the petitioner-society against the reassessment orders dated [2023:RJ-JD:39509-DB] (5 of 5) [CW-9509/2016] 28.03.2016 for the Assessment Years 2008-09, 2009-10 and 2010-11 expeditiously. 9. Taking into consideration the above facts and circumstances of the case, we dispose of this writ petition restraining the respondents from initiating any coercive measure against the petitioner-society for recovery of the outstanding demand created pursuant to the reassessment orders dated 28.03.2016 till the disposal of the appeals preferred by the petitioner-society against the said reassessment orders before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) is also directed to dispose of the said appeals expeditiously, preferably within a period of six months from the date of production of certified copy of this order. 10. Stay petition also stands disposed of. (PRAVEER BHATNAGAR),J (VIJAY BISHNOI),J masif/-D.R. "