2018 (12) TMI 1076 - AT - Income Tax

Stay petition - power of tribunal - recovery proceedings - Held that - Tribunal has no power to review or revisit the issues already decided on same facts especially where the Hon ble High Court has dismissed the Writ Petition against earlier stay order of Tribunal, where the Hon ble High Court had noted the conduct of applicant in Writ Petition challenging the stay order passed by Tribunal and even suo motu initiated civil and criminal contempt proceedings held that the conduct of the petitioner during the pendency of the petition disentitles it to any relief under Article 226 of the Constitution of India. Therefore we dismiss the petition. Hon ble Supreme Court has also not allowed the petition of applicant for early hearing. Hence we find no justification in the present stay applications moved by applicant and the same are dismissed. In our considered view, since the applicant has not complied with earlier directions of the Tribunal to deposit part of tax amount within time frame fixed, then earlier order of Tribunal would stand that, in case of breach of any of the said conditions, the stay granted would automatically get vacated and the matter would be heard in ordinary course. Hence, we dismiss the stay applications moved by applicant.

Issues Involved:
1. Stay of demand totaling ?142.76 crores for assessment years 2008-09 to 2014-15.
2. Denial of exemption under sections 11 and 12 of the Income Tax Act due to acceptance of capitation fees.
3. Violation under section 13 of the Act due to siphoning of funds.
4. Financial difficulty and inability to deposit the directed amount.
5. Conduct of the applicant and related contempt proceedings.

Issue-wise Detailed Analysis:

1. Stay of Demand:
The applicant sought a stay on the demand of ?142.76 crores for assessment years 2008-09 to 2014-15. The Tribunal had previously directed the applicant to deposit ?18 crores in three installments by specific dates as a condition for granting the stay. Failure to meet these conditions would result in the stay being vacated and the case being heard in the ordinary course. The Tribunal emphasized the importance of the applicant proving financial difficulty and the balance of convenience.

2. Denial of Exemption under Sections 11 and 12:
The core issue was the denial of exemption under sections 11 and 12 of the Act due to the applicant accepting capitation fees for admissions. The Revenue's stance was that accepting capitation fees disqualified the applicant from claiming exemptions under these sections. The Tribunal noted that the applicant had a prima facie case for regular receipts but not for capitation fees, which had been settled against the applicant by the Tribunal.

3. Violation under Section 13:
The Tribunal examined the violation under section 13 due to siphoning of funds by Mr. M.N. Navale. The addition of ?24 crores was made substantively in Mr. Navale's hands. The Tribunal found that the balance of convenience favored the applicant for the amount already added in Mr. Navale’s hands but not for the capitation fees, resulting in a recoverable demand of ?17.58 crores.

4. Financial Difficulty and Inability to Deposit Directed Amount:
The applicant claimed financial difficulty, stating no funds were available. However, the Tribunal found inconsistencies in these claims, noting advances to different trusts, available bank balances, and donations made. The Tribunal concluded that the applicant had sufficient funds and directed the deposit of ?18 crores in installments.

5. Conduct of the Applicant and Related Contempt Proceedings:
The applicant's conduct led to contempt proceedings initiated by the Hon’ble High Court due to wrongful withdrawal of funds from an attached bank account. The High Court dismissed the Writ Petition filed by the applicant, citing the applicant's objectionable conduct and lack of clean hands. The Hon’ble Supreme Court also dismissed the applicant's Special Leave Petition, reinforcing the Tribunal's stance.

Conclusion:
The Tribunal dismissed the stay applications, reiterating that the applicant had not complied with previous directions and that there were no substantial changes in facts to warrant a re-examination. The Tribunal emphasized that the applicant's conduct and financial position did not justify a stay on the outstanding demand. The balance outstanding demand was stayed only partially, subject to specific conditions, and the stay applications were ultimately dismissed due to non-compliance.

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