TMI Blog2014 (3) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... mutual fund and long terms capital gain would not be assessed to tax as it is not includable in income chargeable to tax - Section 10 and 11 of the Act are not mutually exclusive - It is the character/ nature of income that is to be excluded from total income u/s 10 of the Act - at this stage a complete stay on the tax attributable to income excluded u/s 10 of the Act is unexceptionable. The Tribunal has not followed the parameter laid down KEC International Limited vs. B.R. Balkrishana [2001 (3) TMI 32 - BOMBAY High Court] - A prima facie case does not mean mere disputing the liability to pay the tax - It would necessarily mean a strong arguable case - This could only be established by respondent assessee if it is pointed out why and ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal has been fixed by the Tribunal on 10 March 2014. 3) Briefly, the facts leading to this petition are as under: a) The respondent assessee is a public charitable trust duly registered under the Bombay Public Trust Act, 1950 and also under Section 12 of the Act. For assessment year 201011 the respondent assessee filed its return of income on 30 September 2010 declaring its income as Nil and claiming exemption under Section 11 of the Act. The petitioner's sources of income for assessment year 201011 were as under:- i) Dividend ii) Mutual fund Rs.444.12 Crores iii) Long term capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order or till the hearing of the appeal whichever is earlier. This was on the basis that for a major amount of outstanding tax the respondent assessee had made out a prima facie case. 4) Mr. Suresh Kumar, learned Counsel for the revenue being aggrieved by the order of the Tribunal submits as under:- a) The impugned order ought to have directed the respondent assesee to deposit at least 50% of the entire tax demand and furnish a bank guarantee for the balance amount. This is particularly so as there was no financial hardship pleaded by the respondent-assessee; and b) The respondent-assessee being a trust claiming exemption under Section 11 of the Act and once it is found that it is not entitled to exemption thereunder then it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against that Section 11 of the Act grants exemption to income earned by a person holding property in trust wholly for charitable purposes i.e. upon the status of the recipient of the income. Therefore, the denial of benefit under Section-11 of the Act would not deprive the respondent assessee of the benefit of Section 10 of the Act; and c) So far as the income other than income to be excluded by virtue of Section 10 of the Act is concerned at the highest the impugned order holds that the tax payable would be Rs. 44 Crores which is also disputed by the respondent assessee. In any case an amount of Rs.10 Crores i.e. about 25% of the demand of Rs.44 Crores had already been paid. Therefore, the order is most reasonable and calls for no inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rores approximately would be exempted under Section 10(34) 10(37) and 10(38) of the Act i.e. income earned on account of dividend , Mutual funds and long term capital gains while exemption under Section 11 of the Act is dependent upon the status of the respondent i.e. property being held under trust. Therefore, at this stage a complete stay on the tax attributable to income excluded under Section 10 of the Act is unexceptionable. 8) However, so far the tax payable of Rs.44 Crores on the disputable income of Rs.270 Crores is concerned, we find that the Tribunal has not followed the parameter laid down in KEC (supra) i.e. not considered the stand of the assessee with regard to its dispute to pay the tax of Rs.44 Crores. A prima facie case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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