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2023 (2) TMI 711 - HC - Income TaxStay of rececovery of demand - Capacity/status of a Assessee as Trust OR status of a Firm - Petitioner contended that no addition could be made u/s 69 of the Act and that the assessment had been done on the basis that the Petitioner was a firm instead of an individual - HELD THAT:- We are unable to accept the contentions of the respondents that they have considered all the contentions of the petitioner inasmuch as the revert relied upon at page no.234 and page no.269 clearly evince that the respondents have not considered the various letters addressed by the petitioner from time to time and their request to change their status from a Firm to a Trust. Apropos the judgement in the case of UTI Mutual Fund [2012 (3) TMI 333 - BOMBAY HIGH COURT] laying down the parameters for disposing of the application for stay, none of parameters have not been considered by the respondents in true letter and spirit as is evident from the orders passed that are based on the petitioner’s status as a Firm instead of as a Trust. Apropos the judgment in the case of UTI MUTUAL FUND [2012 (3) TMI 333 - BOMBAY HIGH COURT] held that in considering whether a stay of demand granted, the Court is duty bound to consider not merely the issue of financial hardship if any, but also whether a strong prima facie case is made out and serious triable issues are raised that would warrant a dispensation of deposit. It was further held that calling upon petitioner to deposit, would itself occasion undue hardship where a strong prima facie case has been made out. We are of the opinion that the respondents have failed to consider the ratio of the judgment in its true letter and spirit inasmuch as respondents called upon the petitioner to deposit 10% of the demand when the petitioner had a strong prima facie case. In our view, the deposit would itself occasion undue hardship to the petitioner who are Trust created for the purpose of benefiting the employees. In the case UMUZA CONSULTANTS [2022 (12) TMI 804 - BOMBAY HIGH COURT] his Court has held that where a prima facie case in favour of the petitioner was found and it appeared that the assessment was high pitched, a stay was granted with regard to the impugned demand notices. In this case too it appears that the petitioner would have a strong prima facie case and they would not be liable to pay such a high demand if their assessment was considered in their capacity/status of a Trust as against the status of a Firm. We are in agreement with the legal propositions enunciated in the aforesaid three judgments of this Court and are bound by it and do not propose to take a different view. Accordingly, we are of the opinion that both the matters deserve to be remanded back with a direction that the Respondents to consider the Petitioner’s application under their status as a Trust and try to dispose of the matter preferably within a period of 4 months from the date of this order.
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