2020 (3) TMI 1246 - AT - Income Tax

Stay petition - petitioner is a charitable trust duly registered u/s.12A - HELD THAT - We are of the considered opinion that it is not a fit case for grant of absolute stay since it requires detailed examination of materials placed before the AO to come to conclussion as to whether the provisions of Section 13 (1) (c) of the Act is applicable or not. However, keeping in view that it is charitable trust, running educational school, we are inclined to grant stay of demand subject to payment of monthly installment of 2,00,000/-. The first installment shall be paid on or before 31st March, 2020 and the subsequent installment shall be paid on or before the last day of each calendar month. This stay petition shall stand vacated, in case the assessee seeks any adjournment from hearing of appeal without any just and reasonable cause. The appeal is posted for hearing on 31.03.2020. The stay petition filed by the assessee is allowed on the above lines.

Summary

Issues: Stay of demand for assessment year 2016-2017 under Section 13(1)(c) of the Income Tax Act for a charitable trust.

Analysis:
1. The assessee, a charitable trust registered under Section 12A of the Income Tax Act, filed a stay petition seeking a stay of demand amounting to B38,79,000 for the assessment year 2016-2017 due to the invocation of Section 13(1)(c) of the Act.

2. The assessee contended that there was no violation of conditions warranting the application of Section 13(1)(c) and requested the balance of demand to be stayed until the appeal's disposal.

3. The Senior DR vehemently opposed the stay petition.

4. The Tribunal, after considering the submissions, found it unsuitable for an absolute stay as a detailed examination of materials before the Assessing Officer was necessary to determine the applicability of Section 13(1)(c). However, considering the charitable nature of the trust operating an educational school, the Tribunal decided to grant a stay subject to the payment of monthly installments of 2,00,000. The first installment was to be paid by 31st March, 2020, and subsequent installments by the last day of each calendar month. The stay would be vacated if the assessee sought adjournment from the appeal hearing without a just cause. The appeal was scheduled for hearing on 31.03.2020, and the stay petition was allowed accordingly.

5. The order granting the stay petition was pronounced on 13th March 2020 in Chennai, allowing the assessee's request for a stay of demand under the specified conditions.