Stay request over cancelled charity registration u/s12A rejected, as no outstanding tax demand existed; application dismissed infructuous

The dominant issue was whether the ITAT had jurisdiction to grant a stay. The Tribunal held that a stay application is maintainable only to stay recovery of an outstanding tax demand; since no demand was outstanding and the disputed amount was stated as zero, no stay of demand could be granted. It further held that it lacks jurisdiction to stay the operation of an order passed by the CIT(E) cancelling registration under s. 12A(1)(ac)(i), as the Tribunal can only adjudicate the appeal and not suspend the impugned order's operation through a stay application. Consequently, the stay application was treated as infructuous and dismissed.

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The assessee society sought a stay pending appeal against an order cancelling its registration under section 12A(1)(ac)(i), which had been granted earlier. The cancellation order invoked section 12AB(4) clause (ii) on allegations of "fraudulent use of the registration" based on information from the investigation wing. The society contended that retrospective cancellation would impair its ability to mobilise donations (including during Ramadan), disrupt funding, and create financial hardship in running its orphanage and schools. The Tribunal noted that "as on date there is no tax demand outstanding against the assessee institution," and the disputed amount was shown as "zero" in the stay application. It held that, in the absence of any outstanding demand, "no order can be passed by this tribunal for stay of outstanding demand." It further held that the request to "stay the operation of the order" cancelling registration could not be granted because the Tribunal "has no jurisdiction to stay the operation of an order." Consequently, the stay application was treated as infructuous and dismissed.

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