Rajasthan Cricket Association and Another vs Income Tax Officer and Others

Mohammad Rafiq, J.—The writ petition is directed against the order dt. 3rd Sept., 2013 (Ann. 5), whereby the attachment order dt. 29th Aug., 2013 has been vacated and the IT Department is going to make recovery of the tax demand from the petitioner. An interim prayer has been made for staying recovery of the tax demand till the pendency of the appeal before the Tribunal. Though the matter is listed for deciding the stay petition seeking interim relief but arguments would suffice decision of the writ petition itself. Therefore, the matter is heard finally. Contention of the learned counsel for the petitioner is that petitioner filed appeal against the order passed by the respondents withdrawing the exemption granted to it and since presently, the Tribunal is not functioning for want of quorum, it has approached this Court for appropriate interim relief. Additionally, his argument is that rectification application filed by the petitioner is pending before the AO, which is sought on the ground that petitioner is entitled to depreciation claim, which has already been granted to it in respect of the asst. yrs. 2008-09 and 2009-10 by the CIT. Yet, the ITO while framing fresh assessment order in the subsequent order, has not given any benefit of that year to the petitioner. Learned counsel for the petitioner has submitted that Circular No. 530 issued by the CBDT dt. 6th March, 1989 [ (1989) 76 CTR (St) 102] under s. 220(6) of the IT Act, 1961 (for short, the "Act of 1961") has provided that if in respect of previous assessment year, any interpretation of law has been taken by the appellate authority, the demand in that respect for the subsequent year shall be liable to be stayed by the AO if the issues are covered by such interpretation in respect of the previous year. The AO shall exercise its jurisdiction thereabout under s. 220(6) of the Act of 1961.

Contention of the learned counsel for the petitioner is that on one hand the ITO is not deciding the rectification application and on the other, the respondents are pressing for recovery and not even staying recovery of that part of the demand, which is covered by the interpretation taken by the CIT allowing benefit of depreciation to the petitioner in respect of the previous years.

Learned counsel for the respondents has opposed the writ petition and argued that the exemption was withdrawn because Rajasthan Cricket Association cannot by any stretch of imagination be considered as a charitable institution, hence it was not entitled to any exemption. In any case, this issue has to be decided by the Tribunal. It is argued that similar writ petition was filed in respect of the previous asst. yrs. 2008-09 and 2009-10, being S.B. Civil Writ Petn. No. 872 of 2012 even when the appeal was pending before the Tribunal and at that time, the Tribunal was functioning. The Tribunal has remanded the matter to the CIT, which again rejected claim for exemption. Now, the appeal there against is pending before the Tribunal. Learned counsel for the respondents has contended that the order of the CIT on the question of depreciation for previous years may have been appealed against by the IT Department before the Tribunal and therefore, on that ground also, the petitioner may not be entitled to any benefit.

In any case, whenever the ITO decides this rectification application and whatever amount becomes due to the petitioner as a consequence of rectification application being allowed, the same would be liable to be refunded to the petitioner. In case, appeal filed by the petitioner against the withdrawal of exemption/cancellation of registration is allowed, consequential refund would be made together with statutory rate of interest. This Court is not inclined to entertain this writ petition on merit particularly when the dispute is pending before the Tribunal. This Court however deems it appropriate to direct the ITO to decide the rectification application filed by the petitioner within one month it approaches him along with copy of this order. The petitioner would also be entitled to file the application for appropriate interim relief before the ITO along with copy of Circular No. 530 issued by the CBDT dt. 6th March, 1989, who may on verification of the fact that the earlier order passed by the CIT allowing benefit of depreciation to the petitioner has not been stayed by any interim order passed by the Tribunal in appeal of the Department, may pass appropriate order on the said application within one week from the date of making such application. The recovery in addition to the above, if any made, shall remain subject to final outcome of the appeal before the Tribunal.

With that direction, the writ petition is disposed of.