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TMI Blog2013 (2) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... n whatsoever to proceed hastily with the enforcement of the recovery of the demand without disposing of the application for stay. Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. It would be appropriate for the Court to ensure that sufficient funds are restored to the bank account of the Petitioner with a view to allow it to carry on its activities for a period of 45 days within which recourse can be taken to the pending stay application before CIT(A) and if an adverse order is passed, thereafter to such remedies as may be available in law. Considering that the total demand is of Rs.11.72 crores, it would meet the ends of justice if the Revenue at this stage is permitted to retain an amount of Rs.3.76 crores and to put back an amount of Rs. One Crore in the account of the assessee. - WRIT PETITION (LODGING) NO.155 OF 2013 - - - Dated:- 23-1-2013 - DR. D.Y. CHANDRACHUD AND A.A. SAYED, JJ. Mr. Jehangir D. Mistri, Sr.Advocate with Mr. Vipul Joshi /by Mr.Aditya N. Bhatt for Petitioner. Mr. A.R. Malhotra for Respondents. JUDGMENT: (PER: DR.D.Y.CHANDRACHUD, J.): 1. The Peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the withdrawal of the registration under section 12AA. Though the Petitioner has filed its objections on 23 September 2011, proceedings in pursuance of the notice for withdrawal are still pending. For A.Y.2009- 10, an order of assessment was passed on 7 December 2012 under section 143(3) denying exemption under section 11 on the ground that the objects clause had been amended. On 29 December 2011, orders were passed under section 143(7) read with Section 147 for A.Ys.2004- 05 and 2006-07 withdrawing the exemption which had been granted earlier. 3. The Petitioner has filed appeals before the Commissioner of Income Tax (Appeals) for A.Ys.2004-05, 2006-07 and 2009-10. Those appeals are pending. 4. On 2 March 2012, the First Respondent issued a communication for recovery of demands for A.Ys.2004-05 and 2006-07. By a communication dated 15 March 2012, the Petitioner requested that the demands be kept in abeyance pending the disposal of the appeal. On 12 October 2012, the Petitioner filed written submissions for A.Ys.2004-05, 2006-07 and 2009-10 before the CIT (A). 5. On 9 January 2013, the Petitioner received a notice dated 28 December 2012 for the recovery of outstanding dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withstanding the change in the objects clause, each of the institutions of the Petitioner is open to all communities irrespective of religious affiliation; (iii) The notices under Section 226(3) have been executed in complete disregard of the law. The Assessing Officer informed the branch manager of the bank not to make any contact with the assessee. Though Section 226(3) requires that a copy of the notice should be forwarded to the assessee, a copy of the notice was received on 17 January 2013 after the monies had been withdrawn leaving no recourse to the Petitioner. As a result of the action of the Revenue, the Petitioner is left with virtually no funds to run the educational institutions, hospices and Balwadis. 8. Learned Senior Counsel submitted that since the action is completely without the authority of law, this Court would be within jurisdiction in directing that the monies should be refunded. At the present stage, however, a reasonable amount is required to carry on the day to day operations of the trust and unless some funds are provided back, it would be impossible to run the institutions. Relief to such an extent should, it was urged, be granted. 9. On the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice on the assessee if there is an apprehension that the monies would be spirited away to the detriment of the Revenue. This was not that kind of a case at all. The Petitioner was granted a registration under Section 12A on 14 July 1975 and the benefit of an exemption under Section 11 right since 1975 until it came to be denied in respect of the assessment years in question. A uniform formula cannot be applied to all cases. In a situation such as the present where the appeals filed by the assessee are pending before the CIT (A) and the assessee had sought an opportunity of being heard and filed applications for stay, there was no justification whatsoever to proceed hastily with the enforcement of the recovery of the demand without disposing of the application for stay. 11. Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. Quasi-judicial authorities have to apply their mind in an objective and dispassionate manner to the merits of each application for stay. While the interest of the Revenue has to be protected, it is necessary for assessing officers to realize that fairness to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot, the Court is informed by learned Senior Counsel, been left with virtually any funds to carry on their day to day welfare activities. The appeals for A.Ys. 2004-05, 2006-07 and 2009-10 are pending. The applications for stay of demand are yet to be heard. 13. We accordingly proceed to dispose of the petition in terms of the following order: (i) The Commissioner of Income Tax (Appeals)-I before whom the appeals are pending for A.Ys. 2004-05, 2006-07 and 2009-10, shall dispose of the applications for stay of demand within a period of three weeks from the receipt of an authenticated copy of this order; (ii) Out of the amount of Rs.4.76 crores that was withdrawn by the First Respondent in pursuance of the notices under Section 226(3) dated 10 January 2013 and 11 January 2013, an amount of Rupees One crore shall be repatriated to the bank account of the Petitioner held in Bank of India, Bandra (West), Mumbai-400 050 forthwith upon receipt of an authenticated copy of this order; (iii) The balance of the amount which has been recovered in pursuance of the notice under Section 226(3) shall abide by the orders that may be passed by the CIT(A)-I subject to such further remedies as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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