TaxTMI 
TaxTMI 
2023 (2) TMI 711
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....d for AY-2014-15 was rejected. Further, the petition challenges the impugned letter dated 22nd July, 2022 whereby the Respondent no.1 sought payment of outstanding income tax dues of Rs.9.63 crores for A.Y. 2014-15; and also challenges the inaction of the CIT(A) in disposing of the Petitioner's application filed on 16th November 2022 against the recovery of demand by the Respondent. 3. It is the case of the Petitioner that the demand raised by Respondent no.3 in the sum of Rs.9,62,39,316/- on account of the addition made u/s 69 of the Act, ought not to have been made as the conditions laid down in Section 69 of the Act have not been fulfilled. Brief facts : 4. On 9th March, 1981 the Petitioner trust was formed for the benefit of the employees of the erstwhile Bajaj Auto Ltd. The Petitioner formerly known as "Bajaj Auto Employees Welfare Fund No.4" was allotted a permanent account number (PAN) AABFB9453F with a status of a firm. 5. As per the scheme of demerger of Bajaj Auto Limited approved by this Court, by its order dated 18th December 2007, the automobile business was transferred to Bajaj Auto Limited, and finance was transferred to Bajaj Finserv Limited with effect ....
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....gs u/s 147 is reason to believe which has been recorded above (refer paragraph 3)." 8. On 20th July, 2021 the Respondent no.1 issued a notice u/s 142 (1) of the Act under the old name and PAN of the Petitioner, asking them to furnish details of various information stated therein by 4th August, 2021. 9. On 16th December, 2021 the Respondent no.3 issued a notice u/s 142(1) of the Act under the old name and PAN of the Petitioner, asking them to file a return of income in response to the notice u/s 148(1) of the Act and to furnish various details pertaining to the 10 items mentioned in the Annexure to the notice by 27th December, 2021. 10. On 21st December, 2021 the Petitioner addressed a letter to Respondent nos.1 and 3 and pointed out that the earlier notice was missed since most employees of the Petitioners were working from home during the second wave of covid pandemic and their tax personnel Mr. Eugene Waradkar had quit the organization in September 2021 and the new personnel joined only in November 2021 in addition to the technical difficulties faced by them on account of the change of name and status of the PAN from firm to trust. The letter also pointed out that the In....
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....by the CIT(A). 14. On 5th May 2022, the Respondent no.1 granted the stay application of the Petitioner subject to fulfilment of certain conditions viz. (a) the Petitioner pays 20% of the demand i.e. Rs.19247864/- within 15 days of receipt of the order (b) cooperate in early disposal of the appeal (c) Respondent no.1 reserves the right to review the order passed after expiry of a reasonable period and (d) Respondent no.1 reserves the right to adjust refund, if any, against the demand to the extent of the amount required from granting stay subject to the provisions of Section 245 of the Act. The Respondent no.1 also held that in the case the Petitioner fails to fulfil the conditions it will be treated as an assessee in default and recovery proceedings shall be initiated as per the Act. 15. The Petitioner filed an application for stay of demand on 18th May 2022 with Respondent no.2 and pointed out the factual position. The Petitioner contended that no addition could be made u/s 69 of the Act and that the assessment had been done on the basis that the Petitioner was a firm instead of an individual. The Petitioner also contended undue financial ....
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....ion of the parameters laid down by this court in the case of KEC International v B R Balakrishnan (2001) 251 ITR 158, which are required to be mandatorily followed by the appellate authorities whilst deciding the stay applications. The learned counsel failed to deal with the stay application and incorrectly passed an order granting a conditional stay requiring the Petitioner to pay 20 % of the demand within 15 days without appreciating the facts and circumstances of the case and without considering the merits of the addition made in the assessment order. 20. The learned counsel further submitted that the Respondent no. 2 passed an order by simply relying on the CBDT Instruction no. 1914 dated 2nd December 1993 and wrongly held that demand will be stayed only if there are valid reasons and mere filing an appeal against the assessment order will not be a sufficient reason to stay recovery of the demand. He submitted that the Respondent no. 2 ought to have considered the stay application and thereby considered the factual position that the income tax return could not be filed since the old PAN no. was in the name of the firm and consequently the utility computes tax at the rate of ....
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....support of his contentions: (i) Humuza Consultants versus Assistant Commissioner of Income Tax, passed in WP (L) 38423 of 2022 dated 16th December 2022; (ii) UTI Mutual Fund vs Income-tax Officer, 19(3)(2) reported in [2012] 345 ITR 71; (iii) UTI Mutual Fund vs Income-tax Officer, 19(3)(2), Mumbai reported in [2013] 31 taxmann.com 222 (Bombay). 27. The learned counsel for the Respondent relied upon the assessment order and more particularly paragraph 5.2 at page 234 and page 268 and submitted that the AO has considered all the contentions of the Petitioner. Conclusion: 28. We have heard the counsels. 29. We are unable to accept the contentions of the respondents that they have considered all the contentions of the petitioner inasmuch as the revert relied upon at page no.234 and page no.269 clearly evince that the respondents have not considered the various letters addressed by the petitioner from time to time and their request to change their status from a Firm to a Trust. 30. Apropos the judgement in the case of UPI Mutual Fund v/s. Income Tax Officer reported in [2012] 345 ITR 71 (Bombay) wherein it followed the judgement of the division ....