The Amritsar Improvement Trust, Amritsar V. Assistant Commissioner of Income Tax, Amritsar and another

CWP/28766/2013

AI Insights

The case involves The Amritsar Improvement Trust challenging the orders of the Income Tax Appellate Tribunal, Amritsar, which mandated the Trust to deposit 25% of the disputed tax demands while staying 75% during the appeal process. The Trust argued that as a Charitable Trust under the Income Tax Act, 1961, it was not liable to pay the assessed taxes. The court considered previous rulings and the financial capacity of the Trust, ultimately deciding not to interfere with the Tribunal's decision and directing a swift resolution of the pending appeals.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 820551 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 26-12-2013
• Assessment Year: misc
• Other Referred Cases: Taneja Developers and Infrastructure Ltd. vs. Assistant Commissioner of Income Tax and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: ROHIT SUD
• Keywords: Assessment; Charitable Trust; Income Tax; Stay of demand
• Section: 2(15); 260-A

Judgement Text

"CWP No. 28766 of 2013 and connected cases 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : December 26, 2013 CWP No. 28766 of 2013 The Amritsar Improvement Trust, Amritsar ....PETITIONER Vs. Assistant Commissioner of Income Tax, Amritsar and another .... RESPONDENTS CWP No. 28767 of 2013 The Amritsar Improvement Trust, Amritsar ....PETITIONER Vs. Assistant Commissioner of Income Tax, Amritsar and another .... RESPONDENTS CORAM : HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH HON'BLE MR. JUSTICE SURINDER GUPTA Present : Mr. Rohit Sud, Advocate, for the petitioner. AUGUSTINE GEORGE MASIH, J. By this order we propose to decide two writ petitions i.e. CWP Nos. 28766 and 28767 of 2013 preferred by the petitioner-The Amritsar Improvement Trust, Amritsar (hereinafter referred to as 'Trust') impugning the order dated 17.12.2013 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar-respondent No. 2, vide which 75% payment of outstanding demands in dispute stands stayed during the pendency of appeal and the petitioner-Trust has Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No. 28766 of 2013 and connected cases 2 been directed to deposit the remaining 25% of the outstanding demand in dispute on or before 31.12.2013 for the assessment years 2004-05 and 2005-06, failing which the stay shall automatically stands vacated. It is the contention of the counsel for the petitioner that the petitioner is to be assessed as a Charitable Trust under the Income Tax Act, 1961 (hereinafter referred to as 'the Act') and, therefore, there can be no liability to pay the tax. He has referred to the order dated 31.10.2008 (Annexure P-3) passed by this Court, vide which the appeal preferred by the department under Section 260-A of the Act against the order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar vide which registration was granted as a Trust, stands dismissed. He asserts that as per the provisions of Section 2(15) of the Act, petitioner-Trust is entitled to the benefit under the said Act and, therefore, the assessment, as made by the respondents for the assessment years 2004-05 and 2005-06, is unsustainable. He has also referred to the order passed by this Court dated 22.09.2008 (Annexure P-5) in CWP No. 13569 of 2008 preferred by the petitioner where a direction was issued to the Appellate Authority i.e. Commissioner of Income Tax (Appeals) for considering prayer for stay within one month of the receipt of the order for the assessment in question for the above referred two years. Thereafter, the notice dated 25.08.2009 for recovery of tax assessed from the petitioner was made, which was challenged by filing CWP No. 13613 of 2009 by the petitioner, which was disposed of vide order dated 08.02.2010 (Annexure P-8) by directing the Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No. 28766 of 2013 and connected cases 3 Commissioner of Income Tax (Appeals) to take a decision on the stay application and the appeal of the petitioner in accordance with law. The matter with regard to the assessment is still pending. Thereafter, another notice dated 07.11.2013 directing the petitioner to deposit ` 42,18,50,393/- was received, which was challenged in CWP No. 25233 of 2013 by the petitioner. The writ petition was disposed of with directions to the Income Tax Appellate Tribunal to decide the application of the petitioner for stay on 29.11.2013 i.e. the date already fixed before the Tribunal or within a week thereafter. The impugned notice dated 07.11.2013 (Annexure P-12) was ordered to be kept in abeyance for a period of 15 days w.e.f. 27.11.2013, the date of decision. It is in pursuance thereto that the present impugned order has been passed by the Tribunal, which is assailed by the petitioner. Counsel for the petitioner contends that even the 25% of the assessed liability, which has been directed to be deposited by the petitioner, is not sustainable as the petitioner is running in losses. He has referred to the Division Bench judgment of the Delhi High Court in the case of Taneja Developers and Infrastructure Ltd. vs. Assistant Commissioner of Income Tax and others, (2010) 324 ITR 247 to contend that the assessment being a very high figure than the returned income, the recovery needs to be stayed in view of the CBDT Instruction of the year 1969. We have considered the submissions made by the counsel for the petitioner and have gone through the records of the case. Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No. 28766 of 2013 and connected cases 4 Admittedly, a demand of ` 3,43,23,801/- has been raised for the assessment year 2004-05 and ` 42,18,50,393/- for the assessment year 2005-06. The petitioner-Trust is admittedly having ` 120 Crores in its account and, therefore, is in a position to make the payment. As per the CBDT Instruction, which is prevalent as of now is that in the normal course, the payment will not be stayed but can only be done for valid reasons and merely because an appeal has been preferred against the assessment order would not entitle a party to the stay. The Tribunal has, while taking into consideration the liquidity position of the petitioner-Trust and also keeping in view the interest of revenue, proceeded to stay 75% of the outstanding demands in dispute and has only required the petitioner to make payment of 25% of the outstanding demand. The total comes to ` 45,61,74,194/- for the assessment years 2004-05 and 2005-06 and the petitioner has only been asked to deposit ` 11,40,43,550/- on or before 31.12.2013. Not only this, on such deposit and production of the original receipt before the Registry, the main appeals of the petitioner have been directed to be fixed in the month of January, 2014. We do not find any irregularity or illegality in the order passed by the Tribunal which would call for interference by this Court. The judgment in the case of Taneja Developers and Infrastructure Ltd. (supra) would not be applicable to the facts of these cases as it did not relate to the dispute whether the assessee was a Charitable Trust or not. However, keeping in view the long pending dispute, a direction is issued to the Tribunal to decide the appeals of the petitioner within a period of two months from today. Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No. 28766 of 2013 and connected cases 5 Copy of the order be sent to the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar-respondent No. 2 by the Registry for compliance. The writ petitions are disposed of in the above terms. (AUGUSTINE GEORGE MASIH) JUDGE (SURINDER GUPTA) JUDGE December 26, 2013 pj Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No. 28766 of 2013 and connected cases 6 Datta Prerna 2013.12.27 12:07 I attest to the accuracy and integrity of this document High Court, Chandigarh "