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2017 (5) TMI 261 - HC - Income TaxStay of demand - recovery proceedings u/s 226 - petitioner institute has been set up and is maintained by the State Government for advancement of scientific knowledge - Held that:- In the instant case, a bare perusal of the impugned order reveals that no reasons whatsoever have been mentioned while rejecting the case of the petitioner for stay of demand during the pendency of the appeal. It is enjoined upon the Appellate Authority to set out the reasons in support of the order passed. Giving reasons is one of the fundamentals of sound administration of justice. It is necessary to disclose the reasons which would indicate application of mind on the part of the authority and the aggrieved party would know as to why the decision has gone against it. It may not be necessary to set out reasons in detail but reasons at least in brief have to be stated by the Adjudicatory Authority. It is important to note that the petitioner institute has been set up and is maintained by the State Government. The object of the petitioner institute is advancement of scientific knowledge aimed at enhancing the quality of patient care. The case of the petitioner against the assessment for the year 2011-12 has already been decided in its favour and it is stated to be entitled to refund of ₹ 5.87 crores. The setting aside by ITAT’ of withdrawal of the registration of the petitioner institute under Section 12AA will have a bearing on the demand raised against the petitioner as well as the outcome of the appeal before the CIT. It deserves to be noticed that against the total demand of ₹ 171.14 crores raised from the petitioner an amount of ₹ 72.39 crores has already been recovered/received by the respondents. In the impugned order, the demand pertaining to assessment years 2006-07 to 2010-11 has already been stayed as the petitioner has deposited an amount of 15%. It is also not a case where the petitioner institute has been a wilful defaulter and it would be difficult to recover the amount in case, appeal is decided against it. The petitioner has also been able to make out a prima facie case. We are, therefore, of the view that the case of the petitioner falls in exceptional circumstances which would warrant stay of demand without any pre-deposit during pendency of appeal.
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