DEVI KARUMARIAMMAN EDUCATIONAL TRUST Vs. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS)-I, CHENNAI CIRCLE AND ORS.

JUDGEMENT

(1.) This writ petition has been filed challenging the correctness of the order dated 19.6.2015 passed by the Deputy Commissioner of Income Tax (Exemptions)-I, Chennai Circle, the first respondent herein in PAN No. AABTS7096K/2015-16, in and by which the assessing officer has turned down the request for grant of 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 disallowances, an assessment order was passed against the petitioner. The same was contested before the Commissioner of Income Tax (Appeals) and subsequently before the Income Tax Appellate Tribunal on the issue of claim of corpus donations received during the previous years i.e., pertaining to assessment years 1999-2000 to 2002-2003 and on the claim of depreciation on fixed assets. Finally the Income Tax Appellate Tribunal remanded the appeal back to the file of the assessing officer for de novo adjudication. 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 constrained to move a stay application under Section 220(6) of the Income Tax Act for grant of absolute stay of the demand, taking a stand that the claim of depreciation is squarely covered by the judgments of various High Courts including the jurisdictional High Court in the case of Commissioner of Income Tax v. Rao Bahadur Calawala Cunnan Chetty Charities, 1982 135 ITR 485 along with the strength of the 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, 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 staying demand have been completely overlooked by the assessing officer. She has also further pleaded with this Court that when the guidelines are very clear and explicit that a demand will be stayed only if there are valid reasons for doing so, more particularly, if the demand in dispute relates to issues that have been decided in assessee's favour by an appellate authority or Court earlier, the assessing officer, in all fairness, ought to have considered the stay application in favour of the 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, 1982 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), 51 SOT 538 and in Joint Commissioner of Income Tax v. Bhaktavatsalam Memorial Trust reported in : 30 ITR 264, referring to the decisions of the Kerala High Court in the case of Lissie Medical Institutions v. Commissioner of Income Tax, 2012 348 ITR 344; of the Delhi High Court in the case of Director of Income Tax (Exemptions) v. Charanjiv Charitable Trust, : 43 Taxman.com 300 and in Deputy Director of Income Tax (Exemptions) v. Adi Sankara Trust, : 46 SOT 230 (Cochin), erroneously refused to grant absolute stay. Although the assessing officer has directed the petitioner to pay 50% of the demand in ten installments starting from June, 2015 at the rate of Rs. 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 Rs. 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.