M/S P. R. ROLLING MILLS P. LTD., JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, JAIPUR

SA 22/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3711 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 24-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Keywords: Application of stay; Retrospective amendment

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM S.A NO. 22/JP/2018 (ARISING OUT OF ITA NO. 529/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 M/S P.R. ROLLING MILLS P. LTD. C-5, SAWAI MANSINGH HIGHWAY, BANIPARK, JAIPUR. CUKE VS. THE DCIT, CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCP 4072 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 11/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 11/05/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS STAY APPLICATION IS FILED BY THE ASSESSEE FOR SEEKING STAY AGAINST THE OUTSTANDING DEMAND OF RS. 64,07,760/- A RISING FROM THE ASSESSMENT FOR THE ASSESSMENT YEAR 2014-15. 2. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE DEMAND IN QUESTION HAS ARISEN DUE TO THE ADDITION MADE BY THE AO BY WAY OF DISALLOWANCE OF DEDUCTION U/S S.A. NO. 22/JP/2018 M/S P.R. ROLLING MILLS P. LTD VS. DCIT 2 35 OF THE INCOME TAX ACT OF RS. 1,75,00,000/- ON TH E GROUND THAT THE DONATION GIVEN BY THE ASSESSEE TO THE INSTITUTION SCHOOL OF HUMAN GENETICS & POPULATION HEALTH IS NOT ELIGIBLE FOR D EDUCTION U/S 35 OF THE I.T. ACT IN VIEW OF THE SUBSEQUENT WITHDRAWAL OF NO TIFICATION U/S 35(1)(II) OF THE ACT. THE LD. AR OF THE ASSESSEE HA S SUBMITTED THAT WHEN THE ASSESSEE MADE THIS DONATION TO THE SAID INSTITU TION, THE INSTITUTION WAS ACCORDED THE STATUS OF SCIENTIFIC AND INDUSTRIA L RESEARCH ORGANIZATION BY THE DEPARTMENT OF SCIENTIFIC AND IN DUSTRIAL RESEARCH AND FURTHER CBDT VIDE NOTIFICATION NO. 4/2010 DATED 28.01.2010 HAS NOTIFIED THIS INSTITUTION AS ELIGIBLE INSTITUTION I N THE CATEGORY OF OTHER INSTITUTIONS ENGAGED IN THE RESEARCH ACTIVITY. THUS , THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE SUBSEQUENT WITHDRAW AL OF THE NOTIFICATION BY THE CBDT WITH RETROSPECTIVE EFFECT CANNOT RENDER THE CLAIM OF THE ASSESSEE IMPERMISSIBLE FOR DEDUCTION U /S 35 OF THE I.T. ACT. THUS, HE HAS SUBMITTED THAT THE ASSESSEE IS HAVING A GOOD PRIMA FACIE CASE ON MERITS AND THEREFORE, THE OUTSTANDING DEMAN D MAY BE STAYED TILL THE DISPOSAL OF THE APPEAL OF THE ASSESSEE. 3. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T THE BOARD HAS WITHDRAWN THE NOTIFICATION ISSUED U/S 35(1)(II) OF THE I.T. ACT WHEN IT WAS FOUND THAT THE SAID INSTITUTION WAS NOT CARRYIN G THE GENUINE ACTIVITY S.A. NO. 22/JP/2018 M/S P.R. ROLLING MILLS P. LTD VS. DCIT 3 OF RESEARCH AND DEVELOPMENT BUT INDULGED IN DUBIOUS TRANSACTIONS OF RECEIVING THE DONATION AND REPAYING THE SUM TO THE DONOR. HE HAS THUS STRONGLY OBJECTED TO THE GRANT OF STAY DEMAND. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD WE NOTE THAT THE AO DISALLOWED T HE CLAIM OF DEDUCTION U/S 35 OF THE ACT OF RS. 1,75,00,000/- BE ING THE DONATION GIVEN TO SCHOOL OF HUMAN GENETICS & POPULATION HEA LTH. THERE IS NO DISPUTE THAT AT THE TIME OF DONATION GIVEN BY THE A SSESSEE THE SAID INSTITUTION WAS DULY NOTIFIED BY THE CBDT U/S 35 OF THE ACT. THOUGH SUBSEQUENTLY THE NOTIFICATION WAS WITHDRAWN VIDE OR DER DATED 15.09.2016 WITH RETROSPECTIVE EFFECT AND CONSEQUENT LY THE AO HAS MADE THIS ADDITION OF RS. 1,75,00,000/-. THE INITIAL DEM AND WAS RAISED BY THE AO OF RS. 1,16,60,450/- BUT SUBSEQUENTLY THE SAID D EMAND WAS RECTIFIED TO RS. 76,57,760/-. OUT OF THE SAID TOTAL OF RS. 76 ,57,760/- THE ASSESSEE HAS ALREADY PAID A SUM OF RS. 12,50,000/-. THE PAYM ENT OF RS. 12,50,000/- HAS NOT BEEN DISPUTED BY THE REVENUE. T HE ISSUE INVOLVED IN THE ASSESSEES APPEAL IS COMPLEX IN NATURE AND T HEREFORE, THE SAME HAS TO BE DECIDED ONLY AFTER CONSIDERING ALL THE RE LEVANT FACTS WELL AS LAW ON THE POINT WHILE DISPOSING THE APPEAL OF THE ASSESSEE. HENCE, NO VIEW CAN BE EXPRESSED AT THE STAGE OF STAY APPLICAT ION ON THE MERITS OF S.A. NO. 22/JP/2018 M/S P.R. ROLLING MILLS P. LTD VS. DCIT 4 THE ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE. T HEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESSEE HAS MADE OUT A PRIMA FACIE GOOD ARGUABLE CASE ON MERITS WE ARE OF TH E VIEW THAT SUBJECT TO A FURTHER PAYMENT OF RS. 7,50,000/- WHICH MAKES THE TOTAL PAYMENT OF RS. 20,00,000/- MORE THAN 25% OF THE TOTAL DEMAND T HE BALANCE DEMAND IS TO BE STAYED. ACCORDINGLY, SUBJECT TO THE PAYMENT OF RS. 7,50,000/- ON OR BEFORE 31.05.2018 THE OUTSTANDING BALANCE DEMAND IS STAYED FOR A PERIOD OF 180 DAYS OR TILL DISPOSAL OF THE APPEAL OF THE ASSESSEE WHICHEVER IS EARLIER. THE APPEAL OF THE A SSESSEE ALREADY IS FIXED FOR HEARING ON 18.06.2018. THE REGISTRY IS DI RECTED TO LIST THE APPEAL OF THE ASSESSEE IN THE CATEGORY OF STAY GRAN TED MATTER. WE MAKE IT CLEAR THAT IN CASE THE ASSESSEE SEEKS UNNECESSAR Y ADJOURNMENT, THE STAY GRANTED BY US WOULD STAND VACATED. IN THE RESULT, THE STAY APPLICATION IS ALLOWED TO PART PAYMENT. ORDER PRONOUNCED IN THE OPEN COURT ON 11/05/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/05/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: S.A. NO. 22/JP/2018 M/S P.R. ROLLING MILLS P. LTD VS. DCIT 5 1. VIHYKFKHZ@ THE APPELLANT- M/S P.R. ROLLING MILLS P. LTD., JAIP UR. 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-3, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {S.A. NO. 22/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR