2024 (1) TMI 615 - HC - Income Tax

Stay of recovery - Validity of tax liability imposed on the petitioner - undisputed between the parties that the petitioner is a Development Authority enjoying the status of the charitable institution within the meaning of that term as defined under Section 2(15) - petitioner claims no recovery and/or adjustment of refund may have been made in excess of 20% of the disputed demand. Yet, much higher amounts have been adjusted - HELD THAT - While learned counsel for the petitioner initially prayed for stay of recovery for the A.Y.s 2017-18, 2018-19 and 2020-21 which has been opposed with equal vehemence by learned counsel for the revenue, on the suggestion of the Court, both parties agree that the cause of action giving rise to the present petition may stand better addressed, if the appeals filed by the petitioner being are dealt with and decided on their own merits, expeditiously. Accordingly, in the interest of justice, writ petition is disposed of with the direction, let the Appeal be heard and decided by the Appeal Authority within a period of three months from today.

Summary

Issues Involved:
The judgment addresses the tax liability of a Development Authority categorized as a charitable institution under Section 2(15) of the Income Tax Act, 1961 for various assessment years. The issues include the disputed tax liability, adjustments of refund, excess recovery, and the request for stay of recovery for specific assessment years.

Summary:

Issue 1: Tax Liability and Assessment Appeals
The petitioner, a Development Authority recognized as a charitable institution, challenges the tax liability imposed for multiple assessment years. Citing a recent Supreme Court decision, the petitioner contests the high-pitched assessment orders for the years 2013-14, 2015-16, 2016-17, 2017-18, 2018-19, and 2020-21. The petitioner has filed first appeals under Section 246A of the Act, with some appeals at different stages and varying stay orders granted. Adjustments of refund have been made by the revenue for certain years despite the petitioner's claim that no recovery or refund adjustment should exceed 20% of the disputed demand.

Issue 2: Resolution and Direction
Upon hearing arguments from both parties, the Court suggests addressing the cause of action by expeditiously deciding the pending appeals filed by the petitioner. The Court directs that Appeal Nos. CIT(A), Ghaziabad/10660/2016-17, CIT(A), Meerut/10399/2017-18, CIT(A), Meerut/10337/2018-19, NFAC/2016-17/1020668, NFAC/2016-17/1020669, NFAC/2017-18/10039960, and NFAC/2019-20/10193992 be heard and decided by the Appeal Authority within three months. During this period or until the disposal of the appeals, no coercive measures shall be taken against the petitioner for the assessment years 2017-18, 2018-19, and 2020-21.

This judgment provides clarity on the tax liability of a Development Authority as a charitable institution and emphasizes the need for a timely resolution of assessment appeals to ensure justice and fairness in tax matters.