AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 852
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....development) Act, 1971(Slum Act 1971). The Petitioner has been set up to formulate, implement and execute schemes to achieve the rehabilitation of slum areas and its inhabitants. 4. The Petitioner from the Assessment Year 200304 onwards has been claiming exemption from payment of Income Tax under Section 11 of the Act. For the Assessment Years 2003-04 to 2008-09 the Assessing Officer had denied the exemption to the Petitioner. On appeal, the CIT(A) upheld the Petitioner's claim for exemption under Section 11 of the Act for Assessment Years 2003-04 to 2008-09. The RespondentRevenue being aggrieved by the orders of the CIT(A) appealed to the Income Tax Appellate Tribunal (Tribunal). By orders dated 30th September, 2011 and 18th July, 2012, the Tribunal dismissed the Revenue's appeal for Assessment Years 2005-06, 2007-08 and 2008-09 holding that the Petitioner is entitled to exemption under Section 11 of the Act, as its activity stands covered by the definition of 'charitable purpose' under Section 2(15) of the Act. Moreover, the Tribunal in its order dated 30th September, 2011 for the Assessment Year 2007-08, inter alia, also observes that the primary purpose and pre....
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....ng an Assessment Order dated 19th February, 2014; and (iv) The Petitioner's registration under Section 12A of the Act, enabling the availing of exemption under Section 11 of the Act was canceled by the Commissioner of Income Tax by order dated 27th March, 2014. (We are informed that appeal for the order dated 27th March 2014 is pending before the Tribunal). 9. Being aggrieved by the order dated 30th May, 2014, the Petitioner filed an application before the Director of Income Tax(Exemption). On 25th July, 2014, the Director of Income Tax(Exemption) rejected the Petitioner's application for stay on the ground that proviso to Section 2(15) of the Act which is newly added would take the Petitioner's activity outside the scope of charitable purpose. The Director of Income Tax(Exemption) varied the order of the Assessing Officer and directed the Petitioner to pay the entire amount demanded and at least Rs. 25 Crores within a period of 15 days from the receipt of the order dated 25th July, 2014. 10. Mr. Dastur, learned Senior Counsel appearing for the Petitioner submits that in the present facts, an unconditional stay of the demand raised consequent to the order dated 19th ....
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....trospective effect covering the subject Assessment Year 2011-12. Therefore, the Petitioner will not in any event be entitled to the benefit of Section 11 of the Act. 12. The parameters for disposing of an application for stay pending disposal of Appeal before the Appellate Authority under the Act are fairly settled. This Court in KEC International Limited v/s. B. R. Balakrishnan 251 ITR 158 - laid down following parameters for disposing of the stay applications: "(a) While considering the stay application, the authority concerned will at least briefly set out the case of the assessee. (b) In cases where the assessed income under the impugned order far exceeds returned income, the authority will consider whether the assesssee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given by the authority in its order. (c) In cases where the assessee relies upon financial difficulties, the authority concerned can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the authority ....
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....ue was a subject matter of consideration by the Court in UTI Mutual Fund v/s. ITO in W. P. (L) No.523 of 2013 rendered on 6th March 2013 (Dr. D. Y. Chandrachud & A. A. Sayed, JJ.) and it was held that it is not the law that in the absence of financial hardship, no stay of recovery can be granted. The Court held that where a strong prima facie case is made out, a direction to deposit would itself cause financial hardship. Therefore, in our view, the Assessing Officer must deal with the prima facie merits of the Petitioner's case in appeal and if the same is covered against the revenue in view of a decision of a superior forum then the question of considering the issue of financial hardship may not arise. Financial hardship is relevant only when the assessee is unable to make out a case on merits for an unconditional stay of the demand. In this case, the Assessing Officer has not dealt with the prima facie case. Moreover, in the impugned order dated 30th May, 2014, the Assessing Officer has not dealt with the issue as it has already been dealt with in the Assessment Order. If this justification is to be accepted there is no reason for the Act to provide for a stay of demand by th....
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....im of Charitable purposes, keeping in view the fact that the Petitioner's registration under Section 12A of the Act has been canceled even for subject Assessment Year by the order dated 27th March 2014 and though appeal from the same is pending before the Tribunal, no stay is obtained at least, as of today, the Petitioner is not entitled to the benefit of exemption under Section 11 of the Act for the subject Assessment Year 2011-12. Therefore, in the above facts, unconditional grant of stay of the demand till the disposal of the appeal by the CIT(A) would not be warranted. 16. However it was urged on behalf of the petitioner that a prima facie case by itself would warrant an unconditional stay till the disposal of the appeal by the first appellate authority. A prima facie case would mean an an arguable case on first look/appearance. There are varying shades/degrees of a prima facie case. An issue which stands concluded by a decision of a higher forum in favour of the applicant, if not distinguishable on the face of it, would warrant an unconditional stay. Conversely, if the issue is covered against the applicant by a decision of an higher forum then complete deposit of amounts....