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2017 (5) TMI 261

t 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 ITATí of withdrawal of the registration of the petitioner .....

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Amritsar allowed the same on 29.09.2015. This order is stated to have attained finality. For the assessment year 2006-07, the total demand of ₹ 20,77,10,765/- on account of tax, penalty and interest had been raised by the Department whereagainst appeals ITA Nos.271 and 274 of 2014 preferred by the petitioner, are pending adjudication before this Court. After the cancellation of the registration of the petitioner under Section 12AA of the Act, the assessments of the petitioner for the assessment year 2007-08 to 2010-11 were re-opened and total demand of ₹ 72,19,07,560/- was raised. The appeals are stated to be pending before the CIT (Appeal). For the assessment year 2013-14, a demand of ₹ 65,13,78,090/- was raised and the appeal preferred thereagainst by the petitioner is 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 (An .....

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re, in terms of office memorandum dated 29.02.2016 issued by the CBDT, the demand could not be stayed without the deposit of 15%. In support of his submissions, he has relied upon the judgment of the Supreme Court in the case of Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Ltd., and others reported as (1985) 154 ITR 172 (SC), the Division Bench of this Court in the case of Kanav Khanna v. Commissioner of Income-Tax and Others reported as (2014) 366 ITR 386 (P&H) and Madhya Pradesh High Court in the case of Air Transport Co. (Regd.) v. Income Tax Appellate Tribunal and others reported as 1994 (207) ITR 487 (MP). 4. At the outset we deem it appropriate to reproduce the relevant paragraphs of office memorandum dated 29.02.2016 (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 modificati .....

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he order passed after expiry of reasonable period (say 6 months) or if the assessee has not cooperated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section 245. 5. From the reading of the modified guidelines, it is clear that in normal circumstances, the appellate authority would grant stay of demand during the pendency of the appeal upon payment of 15%. It has been envisaged in 4 (B) that there could be situations where an 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 oth .....

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n give reasoned order. 7. The above parameters are not exhaustive. They are only recommendatory in nature. 7. We are in agreement with these parameters and are of the considered view that the assessing/appellate authorities in the States of Punjab, Haryana and the Union Territory of Chandigarh should also follow these guidelines while deciding cases for stay of demand during the pendency of the appeal. 8. 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. 9. Ordinarily, we would have remanded the matter back to the Appellate Authority fo .....

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ers (supra) is clearly distinguishable as it pertains to an assessee who had claimed exemption from capital gains tax on the ground that acquired land was agricultural seeking stay of demand during pendency of appeal. It has been noted therein that the agricultural income for the land in question before the acquisition was shown as nil in the income tax return. It was in such circumstances that the Division Bench of this Court had declined to interfere with the order rejecting application for stay of demand during the pendency of the appeal. 13. In the case of Air Transport Co. (Regd.) v. Income 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 appea .....

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