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M/s Devi Karumariamman Educational Trust Versus Deputy Commissioner of Income Tax (Exemptions) -I, Commissioner of Income Tax (Appeals) -17

2015 (7) TMI 573 - MADRAS HIGH COURT

Disallowance of depreciation - Absolute stay on the recovery proceedings - Held that:- Keeping in mind the ratio of case of Commissioner of Income Tax v. Rao Bahadur Calawala Cunnan Chetty Charities [1979 (8) TMI 17 - MADRAS High Court] read with the aforesaid circular of the Central Board of Direct Taxes in F.No.404/10/2009-ITC dated 1.12.2009 affirming Instruction No.1914 dated 2.12.1993, is of the considered view that when the issue whether the assessee is entitled to the depreciation claim f .....

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gh Courts of other States are taking a different view, thus no other option except to set aside the impugned order, for the simple reason that the appeal is pending for consideration.

Accordingly, the impugned order is set aside. It is open to the second respondent-Commissioner of Income Tax (Appeals)-17, Chennai, the appellate authority to expedite the hearing of the pending appeal and dispose of the same on merits and in accordance with law at the earliest possible time. - W. P. No .....

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f absolute stay on the recovery proceedings initiated by him. 2. Attacking the conclusions reached by the assessing officer in the impugned order, Dr.Anita Sumanth, learned counsel for the petitioner submitted that the petitioner, being a charitable trust engaged in various charitable activities, has filed the return for the assessment year 2009-10 on 30.9.2009 claiming 'Nil' income. After processing the same under Section 143(3) of the Income Tax Act by making various additions or disal .....

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udication. Again the assessing officer has concluded the case rejecting the claim of corpus donations under Section 11(1)(d) of the Income Tax Act, resultantly, he further proceeded to disallow the claim of depreciation on fixed assets. Having been aggrieved by the assessment order, the petitioner preferred an appeal before the Commissioner of Income Tax (Appeals), Chennai. In the meanwhile, subsequent to the order of assessment, recovery proceedings were initiated, therefore, the petitioner was .....

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9 affirming Instruction No.1914 dated 2.12.1993, but the first respondent-assessing officer, by his order dated 19.6.2015, declined to consider the request. Hence, the matter has been brought to this Court. 3. Although various submissions have been placed before this Court, Dr.Anita Sumanth, learned counsel for the petitioner brought to the notice of this Court the Instruction No.1914 dated 2.12.1993 issued by the Central Board of Direct Taxes to impress upon this Court that the guidelines for s .....

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e petitioner, in the light of the ratio laid down by this Court in the case of Commissioner of Income Tax v. Rao Bahadur Calawala Cunnan Chetty Charities reported in 135 ITR 485. But ignoring the ratio laid down by the jurisdictional High Court along with the decisions of the jurisdictional Tribunal in G.K.R.Charities v. Deputy Director of Income Tax (Exemptions) reported in 51 SOT 538 and in Joint Commissioner of Income Tax v. Bhaktavatsalam Memorial Trust reported in 30 ITR 264, referring to t .....

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rom June, 2015 at the rate of ₹ 1,84,800/- per month and submit the copy of challan thereof to the office on or before 30th of that month for stay of the balance demand of ₹ 18,47,190/-, the petitioner is put to great hardship, for the reason that when this Court has decided the matter giving a quietus to the issue that the assessee is entitled to claim depreciation for the assessment year 2009-10, the conditional order passed by the assessing officer is liable to go. 4. Per contra, .....

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nce of the said condition, it was also indicated in the order that the balance demand of ₹ 18,47,190/- would be stayed till the disposal of the appeal before the Commissioner of Income Tax (Appeals), therefore, the petitioner cannot maintain the writ petition. He has also further submitted that when the petitioner has taken support of the decision of this Court in the case of Commissioner of Income Tax v. Rao Bahadur Calawala Cunnan Chetty Charities reported in 135 ITR 485 along with the d .....

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ound with the assessing officer. 5. The circular issued by the Central Board of Direct Taxes in File No.404/10/2009-ITCC dated 1.12.2009 affirming Instruction No.1914 dated 2.12.93 clearly enlightens the duty, responsibility and the guidelines cast on the assessing officer for staying demand. In this context, it is appropriate to extract the relevant portions of the Instruction No.1914 dated 2.12.93, as follows:- ''A. Responsibility (i) It shall be the responsibility of the Assessing Off .....

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see must be intimated of the decision without delay. (ii) Where stay petitions are made to the authorities higher than the Assessing Officer (DC/CIT/CC), it is the responsibility of the higher authorities to dispose of the petitions without any delay, and in any event within two weeks of the receipt of the petition. Such a decision should be communicated to the assessee and the Assessing Officer immediately. (iii) The decision in the matter of stay of demand should normally be taken by Assessing .....

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ing demand (i) A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be sufficient reason to stay the recovery of demand. A few illustrative situations where stay could be granted are- (a) If the demand in dispute relates to issues that have been decided in assessee's favour by an appellate authority or Court earlier; or (b) if the demand in dispute has arisen because the Assessing Officer had adopted an interpretati .....

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