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TMI Blog2014 (11) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... sue is not concluded one way or the other by a decision of a higher forum, then the Authority considering the stay application would have to prima facie consider on the face of the impugned order, the likelihood of the applicant succeeding in appeal - This need not be detailed examination but a first look examination and on that basis it is for the authority to exercise his discretion in law and grant such stay depending upon likelihood of success in appeal - At this stage various other factors such as financial hardship, balance of convenience etc. would enter into consideration to decide the terms of the stay of demand, if any – assessee is directed to deposit 10% of the amount of ₹ 53.71 Crores as pre-deposit, there would be a complete stay of recovery of balance demand raised u/s 156 of the Act for the Assessment Year 2011-12, till the disposal of the case – Partial stay granted. - Writ Petition No. 2542 of 2014 - - - Dated:- 29-10-2014 - M. S. Sanklecha And M. S. Sonak,JJ. For the Appellants : Mr S E Dastoor, Sr. Adv. Nishant Thakkar Mint Confreres For the Respondent : Mr Suresh Kumar ORDER Per: M S Sanklecha,J. At the request of the Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of trade, commerce or business. However, for the Assessment Years 2009-10 and 2010-11, the Assessing Officer during the assessment proceeding did raise the issue of the Petitioner not being entitled to exemption in view of amendment of Section 2(15) of the Act but finally granted the benefit of Section 2(15) of the Act. However, the Assessment Orders for both the Assessment Years 2009-10 and 2011-11 have been reviewed by the Commissioner of Income Tax under Section 263 of the Act and the Petitioner's appeal to the Tribunal from the same are pending. 6. For the subject Assessment Year i.e. Assessment Year 2011-12, the Petitioner filed its Return of Income claiming benefit of exemption under Section 11 of the Act and offered 'nil income' to tax. On 19th February, 2014 the Assessing Officer passed an Assessment Order for Assessment Year 2011-12 denying the benefit of exemption under Section 11 of the Act on the ground that the Petitioner's activity of slum rehabilitation was hit by the newly added proviso to Section 2(15) of the Act. 7. Being aggrieved by the Assessment Order dated 19th February, 2014, Petitioner filed an appeal as on 19th March, 2014 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the proviso to Section 2(15) of the Act would have no application to the present facts as it is applicable only with regard to the activities of advancement of any other object of general public utility. Without prejudice, it is submitted that even if the proviso to Section 2(15) of the Act is sought to be invoked it would not apply as the Petitioner's activity is absent of any profit motive. Therefore, its activities is not in the nature of trade, commerce and business. In fact, the Tribunal in its order dated 30th September 2011 for Assessment Year 2007-08 has held that the activities carried out by the Petitioner is charitable in nature and is absent of any profit motive. Thereafter, the order of the Tribunal for Assessment Years 2005-06, 2007-08 and 2008-09 has been upheld by this Court in Income Tax Appeal No. 655 of 2012 rendered on 8th March, 2013 when the Appeal of the Revenue was dismissed. Thus, prima facie, exemption is available under Section 11 of the Act and in view of the binding decision, a complete stay of the demand till the disposal of the appeal by the CIT(A) ought to have been granted. It is also submitted in Instruction No.1949 dated 2nd Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the order. (e) We clarify that if the authority concerned complies with the above parameters while passing orders on the stay application, then the authorities on the administrative side of the Department like respondent No.2 herein need not once again give reasoned order. The above parameters are not exhaustive. They are only recommendatory in nature. The aforesaid directions were reiterated by this Court in UTI Mutual Funds v/s. ITO 345 ITR 71 while laying additional parameters in respect of disposal of stay applications, are as under: 1. . . . . 2. . . . . 3. If the Assessing Officer has taken a view contrary to what has been held in the preceding previous years without there being a material change in facts or law, that is a relevant consideration in deciding the application for stay. 4. . . . . 5. In exercising the powers of stay, the Income Tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. However, we find that the Director of Income Tax(Exemption) has by the impugned order dated 25th July, 2014 disposed of the application for stay on consideration of relevant grounds unlike the Assessing Officer. Therefore, we decided to examine the impugned orders and dispose of the petition on merits. 14. We find that the orders of the Tribunal for the Assessment Years 2005-06, 2007-08 and 2008-09 as well as the order of the this Court disposing of the Revenue's appeal from the above orders of the Tribunal on which much reliance was placed upon by the Petitioner were all rendered in the context of Section 2(15) of the Act as then existing i.e. prior to the introduction of the proviso. Thus, there is admittedly a change in the law and above decisions may not apply without considering the impact of the amendment i.e. the proviso. This aspect has also been provided in the guidelines laid down in UTI Mutual Fund (345 ITR 71) (supra). The introduction of the proviso would be a matter requiring a detailed examination with regard to its effect/ impact on the Petitioner's activity claimed to be carried out for a charitable purpose. The Assessing Officer has reached the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or the other by a decision of a higher forum, then the Authority considering the stay application would have to prima facie consider on the face of the impugned order, the likelihood of the applicant succeeding in appeal. This need not be detailed examination but a first look examination and on that basis it is for the authority to exercise his discretion in law and grant such stay depending upon likelihood of success in appeal. At this stage various other factors such as financial hardship, balance of convenience etc would enter into consideration to decide the terms of the stay of demand, if any. These are general principles for guidance, illustrative in nature and the Authorities must exercise their discretion in law depending upon the facts before them. 17. Therefore on the application of the above tests bearing in mind that the Petitioner is working towards the rehabilitation of slum dwellers, it is very likely that the Appellate Authority may hold its activity to be for Charitable purposes. Therefore the interest of justice would be met if the Petitioner is directed to deposit 10% of the amount of ₹ 53.71 Crores within six weeks from today and on the Petitioner mak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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