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2017 (5) TMI 261

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..... e 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 circumstance .....

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..... s pending before the respondent No.2. The respondents issued letter dated 03.02.2016 asking the petitioner to deposit the outstanding demand failing which recovery proceedings were to be initiated. The petitioner was also put on notice by the respondents letter dated 14.03.2016 for an outstanding amount for the assessment years 2006-07 to 2010-11 which was replied by the petitioner on 23.03.2016 (Annexure P-9 Colly.). The matter is stated to be pending before the CIT (Exemptions). Thereafter, assessment for the assessment year 2013-14 was also framed by the letter dated 30.03.2016 and further demand was created. The respondents sought the payment of outstanding amount vide order dated 04.05.2016 (Annexure P-12). The petitioner is stated to have preferred appeal against the additional demand for the assessment year 2013-14 which is pending before the CIT. In the meantime, the petitioner preferred application for stay of the demand of ₹ 65,13,78,090/- for the assessment year 2013-14. This application was dismissed by the impugned order dated 25.11.2016 (Annexure P-1) by referring to office memorandum issued by Central Board of Direct Taxes (hereinafter referred to as CBDT ) on .....

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..... (Annexure P-16) issued by the CBDT wherein Instructions No.1914 dated 21.03.1996 providing guidelines for stay of demand at the appellate stage have been modified. 4. In order to streamline the process of grant of stay and standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition for stay of demand disputed before CIT (A), the following modified guidelines are being issued in partial modification of Instruction No.1914: (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder. (B) In a situation where, (a) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collecte .....

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..... amount in excess of 15% of the demand would be required to be paid before staying the demand as well as eventualities wherein deposit of amount less than 15% of the demand would be warranted. Certain situations have been set out by way of illustration wherein amounts in excess and less than 15% of the demand could be accepted for staying the demand during the pendency of the appeal. They are of course illustrative and not exhaustive. 6. In the case of Kec International Ltd. Versus B.R. Balakrishnan and others (supra), the parameters for deciding the stay applications during the pendency of the appeal before the appellate authority have been set out as under:- 6. At the outset, it may be mentioned that the impugned order is passed by respondent No.2 on the administrative side. It does not give any reason. However, it is important to bear in mind that in this case even the Assessing Officer has not given any reasons for rejecting the stay application. As a result of the impugned order, a garnishee notice has been issued under section 226 (3) to the Central Bank of India, J.B. Nagar Branch, Andheri (East), Mumbai. About 500 workers have not been paid salary because of the .....

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..... d 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. 9. Ordinarily, we would have remanded the matter back to the Appellate Authority for a fresh decision but having heard the learned counsel for the parties at some length, we are inclined to finally decide the matter in relation to stay of pre-deposit during the pendency of the appeal. 10. 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. .....

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..... me Tax Appellate Tribunal and others (supra), it was held that grant of stay of recovery of demand is essentially a discretionary matter and invoking extraordinary jurisdiction of the High Court under Article 226/227 of the Constitution of India in such matters is neither proper nor desirable. We have already noticed the judgment of the Supreme Court in the case of Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Ltd., and others (supra), wherein, it has been held that in exceptional circumstances, the writ Court can grant stay of the demand during the pendency of the appeal. 14. For these reasons, we are of the view that the petitioner has been able to set out a case for stay of demand during the pendency of the appeal. We hasten to add that nothing whatsoever observed in this order shall be construed as an expression on merits of the case. The observations made by us are only for the purpose of deciding whether the petitioner has a case for stay of demand during the pendency of the appeal before the CIT. 15. In the result, the petition is allowed and the impugned order dated 25.11.2016 (Annexure P-1) is set aside. There shall be stay of demand duri .....

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