TMI Blog2003 (3) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act has disposed of the said application and has rejected the application seeking registration. The said order of the DIT (Ex.), dated 17-12-2002 is the subject matter of appeal by the assessee before the ITAT vide ITA. 175/Bang./03 filed on 6-2-2003. The said appeal is presently pending before the Tribunal. The petitioner in its appeal has assailed the order of the DIT (Ex) on various grounds including the period of limitation, as according to it, the said order had been passed beyond the period stipulated by law. Be that as it may, it will be sufficient for us at this stage to observe that the said appeal of the assessee is pending with the Tribunal. By way of the present petition it is sought to be canvassed by the assessee that the Assessing Officer by relying on the unjustified order of the DIT (Ex) was rushing to complete the assessment for the assessment year 2002-03 which is not getting time barred by limitation in the near-future, with the objective of fastening the assessee with heavy demand. Hence, the prayer in the said petition that the assessment proceedings for the assessment year 2002-03 being carried out by the Assessing Officer shall be stayed till the disposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med Kunhi was misplaced insomuch as that the subject-matter before the Apex Court therein was only in relation to the slay of recovery proceedings and not stay of the assessment proceedings as such. Therefore, it is argued by the learned DR that, notwithstanding the decisions cited by the counsel in Khalid Mehdi Khan's case; Puran Mal Kauntia's case and Ritz Ltd.'s case the Tribunal does not have any inherent powers to stay the assessment proceedings. 3.1 Our attention was drawn to section 153(3) prescribing time limit for completion of assessments and reassessments. Clause (ii) of Explanation 1 below section 153(3) provides that for the purposes of computing the period of limitation for the purposes of the said section, the period during which the assessment proceedings was stayed by any order of injunction of court was to be excluded. It is pointed out that the Tribunal is not a 'Court' in the sense it is used in the said section and, therefore, if the assessment proceedings was stayed by the Tribunal it may lead to a situation where no sufficient time be left with the Department to complete the assessment within the period of limitation as laid down in the Act. 3.2 It is fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Khalid Mehdi Khan were to the following effect. The assessee therein had filed a return including his 1/5th share of the lease amount received in respect of certain property and the said return was accepted and the assessment was completed. Subsequently, the CIT assuming jurisdiction under section 263 proceeded to revise the order of ITO holding that the entire lease amount received in respect of the property was liable to be assessed in the hands of the AOP comprising of the assessee and the other interested persons. Therefore, the CIT set aside the orders of the Assessing Officer and directed him to frame the assessment afresh. Against the order of CIT under section 263, the assessee preferred an appeal before the ITAT arid pending disposal of the said appeal, the Tribunal granted stay of all further proceedings including the assessment proceedings and also directed the appeals to be posted for out of turn hearing. The aforesaid order of the Tribunal came to be challenged in writ petition before the Hon'ble Andhra Pradesh High Court by the Department. Against the aforesaid facts, the Hon'ble Andhra Pradesh High Court held that the Tribunal was within its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercise its power having regard to them and in the light of the principles enunciated by the Supreme Court in CIT v. Mohammed Kunhi [1969] 71 ITR 815 (SC)." 5.2 The second decision is of the Hon'ble Patna High Court in the case of Puran Mal Kauntia. The facts therein were that the assessee approached the ITAT for stay of further proceedings before the Appellate Assistant Commissioner pending the disposal of the appeal by the Tribunal. The Tribunal rejected the application on the ground that it did not have the requisite power to grant stay of proceedings. On being approached by way of a writ petition, the Hon'ble High Court of Patna held that the view of the Tribunal was erroneous insomuch as that the Tribunal had the implied power to order stay in a proper case and directed the Tribunal to dispose of the case on merits. 5.3 The Hon'ble Bombay High Court in Ritz Ltd. 's case again held on the same lines as decided by the Hon'ble Patna High Court in Puran Mal Kauntia's case. The Hon'ble Bombay High Court by referring to the decision in M.K. Mohammed Kunhi's case as also in the case of CIT v. Bansi Dhar Sons [1986] 157 ITR 665 (SC) held that the Tribunal was empowered to stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects and genuineness of the activities of the institution and shall pass on order granting registration. If the CIT is not so satisfied, he may proceed to pass an order refusing registration in terms of section 12AA. The said order of the CIT passed under section 12AA is appealable before the ITAT in terms of section 253(1)(c) of the Act. 6. Now coming back to the instant case, the appeal of the assessee against the order passed by the DIT(Ex) denying registration is pending before the Tribunal in ITA. 175/Bang./03. We are convinced that the result in the above appeal pending before the Tribunal shall also have a bearing on the assessment proceedings insomuch as that if the assessee is held liable for registration, the Assessing Officer can only thereafter consider the efficacy of the exemption under sections 11 and 12 as the assessee would appear to have met the particular condition as laid down in section 12A. If the result is in the negative, the Assessing Officer while framing the assessment in the impugned proceedings would be justified in rejecting the claim of the assessee for exemption under sections 11/12. Therefore, in our considered view, the issue pending before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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