TaxTMI 
TaxTMI 
2017 (11) TMI 1614
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....,000 students taking education in all the institutions run by the applicant. The applicant claims to have employed more than 7900 personnel in its institutions. All these facts are mentioned in the Stay Applications moved by the applicant. 3. Search and seizure operations were carried out at the premises of applicant on 06.08.2013. In response to notice issued under section 153A of the Act, the applicant furnished return of income and the assessments were completed under section 153A r.w.s. 143(3) of the Act for assessment years 2008-09 to 2013-14. For assessment year 2014-15 i.e. the year of search, assessment was completed under section 143(3) of the Act. After passing of the order of CIT(A), total tax demand which is outstanding is as under:- Assessment Year Tax Demand TDS & Prepaid Tax Balance of Tax Demand 234B Interest on balance tax Total tax demand 2009-10 71,561,829 41,026,403 30,535,426 57,569,757 88,105,183 2010-11 216,781,320 2,471,107 214,310,213 154,303,353 368,613,566 2011-12 30,321,342 1,806,880 28,514,462 17,108,677 45,623,139 2012-13 115,014,060 1,683,138 113,330,922 54,398,8....
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....ay the tax, against which the applicant is in appeal. He stressed that it was only the second item i.e. salary to Mr. Y.U. Pawar of Rs. 6,15,888/- which would attract tax. According to him, thus, there would be Nil tax payable against all these demands created in the case of applicant. He stressed that the entire demand raised by the Assessing Officer should be stayed. The learned Authorized Representative for the applicant has filed written submissions to this effect. He also stressed that despite violation under section 13(1)(c) of the Act, there could not be wholesale denial of exemption under sections 11 and 12 of the Act. The next plea raised by the learned Authorized Representative for the applicant was that even if the donations amount is added, the applicant would be entitled to the benefit of exemption under section 11 of the Act, since the donations were paid towards specific purpose namely securing admission and hence, the donations are exempt under section 11 of the Act. He stressed that the first issue which arises in the case is exemption allowable on the receipts other than which are allegedly governed under section 13(1)(c) of the Act. He referred to the order of CI....
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....ed to pay the outstanding amount by installments, which unfortunately could not be paid. The applicant thereafter, again approached the Hon'ble High court, which modified this earlier order and the applicant claims that it complied with the conditions laid down in that regard. He thereafter, pointed out that in view of liabilities of applicant trust and the recovery proceedings from the bank instituted against the trust and also because of outstanding fees receivable, financial position of the applicant was not such that any part of demand could be paid. 7. The learned Departmental Representative for the Revenue on the other hand, also filed written note and pointed out that the demand which is outstanding against the applicant has been raised as a result of assessments completed consequent upon search action on 06.08.2013. It was further pointed out that on the basis of evidences gathered during search proceedings, it was held in the assessment order that the applicant trust was illegally accepting capitation fees / donations from the students admitted for various courses and the money so collected had been siphoned by the trustees for their personal enrichment. The Assessing O....
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....ility of income of Rs. 57.43 crores in the hands of applicant, the learned Departmental Representative for the Revenue pointed out that total tax on the same worked out to Rs. 17.23 crores and after interest under section 234B of the Act, the total demand was Rs. 24.13 crores. The applicant is entitled to TDS of Rs. 1.29 crores and the amount paid of Rs. 5.25 crores, against which the balance taxes due from the applicant was Rs. 17.58 crores. The learned Departmental Representative for the Revenue thereafter, referred to the financial position as per audited Balance Sheet as at 31.03.2017, as filed by the applicant and pointed out that total receipts were Rs. 670 crores, against which the establishment expenses were to the tune of Rs. 155 crores. Further, on other objects, sum of Rs. 460 crores has been spent. The applicant had claimed expenses on account of depreciation of Rs. 61 crores which does not involve cash outflow. However, approximate surplus which is available in the hands of applicant was Rs. 37 crores. He pointed out that if the position for assessment years 2009-10 to 2014-15 is considered, the surplus in the respective years is substantial. He further pointed out tha....
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....Authorized Representative for the applicant in rejoinder pointed out that the merits of case are not to be discussed at this juncture and he further pointed out that in any case Rs. 24 crores has to be excluded from the total sum of Rs. 57 crores. He stressed that the surplus available with the trust was for carrying on his activities i.e. maintenance of huge assets and running of various institutions. He also pointed out that wholesale denial theory could not be accepted. 11. We have heard the rival contentions and perused the record. In the present stay application, issue is in respect of demand created in the case of applicant which is on account of assessments framed under section 153A r.w.s. 143(3) of the Act for assessment years 2009-10 to 2013-14. For assessment year 2014-15, the assessment was completed under section 143(3) of the Act. The applicant trust was running various institutions and has been granted registration under section 12A of the Act. During the course of search, incriminating evidence was found that the assessee in various years has accepted capitation fees against the admissions granted to the students. Various documents have been referred to by both th....
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....ceipts, the applicant prima facie has case in his favour. However, the issue of claim of exemption under section 11 of the Act on capitation fees received by the applicant is settled against the applicant by the decision of this Bench. The third aspect of the demand is the violation under section 13 of the Act on account of siphoning of funds by Mr.M.N. Navale to the extent of Rs. 24 crores. In respect of said sum of Rs. 24 crores, the applicant has pointed out that the addition has been made on substantive basis in the hands of Mr.M.N. Navle. Thus, we find that balance of convenience is in favour of applicant where the amount has already been added in the hands of Mr. M.N. Navle. However, in respect of income which is on account of capitation fees totaled Rs. 57.43 crores, we find no merit in the claim of applicant for stay of recovery of outstanding demand against the same. The balance demand which is recoverable on account of said addition works out to Rs. 17.58 crores as per working given by the learned Departmental Representative for the Revenue, which is as under:- Tax on Income attracting violation u/s 13(1)(c) Tax + Interest + Surcharge TDS Regular Payment Ne....
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....he available bank balances are to the tune of Rs. 6.60 crores. 14. The next aspect which has to be seen is the liquid funds of Rs. 103 crores which is the amount from State Government given to the applicant, which undoubtedly goes for running of institution but also include the payment of taxes, if any. Further, the surplus before depreciation which is available with the applicant from year to year is also available with assessee. Another aspect to be noted from the financial accounts submitted by the applicant is that it has given donation of Rs. 20.02 crores as reflected in Schedule II of Profit and Loss Account ending 31.03.2017, placed at page 76 of the Paper Book. 15. In the totality of the above said facts and circumstances, we are of the view that the applicant has prima facie case and balance of convenience for granting only partial stay of recovery of outstanding demand. We therefore, grant the stay of outstanding tax demand subject to the following conditions:- a) The applicant is directed to deposit Rs. 18 crores in three installments i.e. Rs. 6 crores by 30.11.2017; Rs. 6 crores by 30.12.2017 and Rs. 6 crores by 15.01.2018. b) The applicant shall....