Syed Chagan Zuleikha Memorial Trust vs The Income Tax Officer

V. Ramasubramanian, J.—The petitioner has come up with the above writ petition challenging a condition imposed by the second respondent for the grant of stay pending disposal of an appeal.

Heard Mr. B. Sivaraman, learned counsel for the petitioner. Mr. T. Pramod Kumar Chopda, learned Standing Counsel takes notice for the respondents.

The petitioner sold a property, on which, capital gains were assessed. This led to an order of assessment, in which, the Department raised a demand for a sum of Rs. 2,89,04,250/-. The petitioner filed a stay petition before the Assessing Officer in the first instance. However, the Assessing Officer rejected the stay petition. The petitioner again filed an application before the Assessing Officer for reconsideration. On the application for reconsideration, the Assessing Officer imposed a condition that the petitioner should pay 50% of the demand.

Thereafter, the petitioner moved an appeal along with a stay petition, before the second respondent. Upon considering the financial crunch of the petitioner, while granting stay, the second respondent modified the condition imposed by the Assessing Officer, directing the petitioner to pay 25% of the demand. Not satisfied with the deduction made by the second respondent, the petitioner is before this Court.

Citing the decisions of the Delhi High Court in Soul Vs. Deputy Commissioner of Income Tax, and the Bombay High Court in Nishith Madanlal Desai Vs. Commissioner of Income Tax-11 and Others, , the learned counsel for the petitioner contended that once the financial crunch of the petitioner is accepted, there is no justification for imposing a condition. Drawing my attention to the bank statement as on 16.7.2014, the learned counsel for the petitioner contended that the petitioner cannot pay the said sum.

I have carefully considered the above submissions. The case cannot come under the category of an unreasonably high pitched assessment. But, the financial hardship of the petitioner has been taken into consideration. Therefore, strictly speaking, the impugned order does not warrant any interference.

However, if we have a look at the fact that the petitioner is a public charitable trust and also if we have a look at the bank statement, I do not think that the petitioner will be able to make payment of 25% of the demand.

Therefore, the writ petition is disposed of modifying the impugned order to the following effect:

(i) The petitioner shall deposit 10% of the demand on or before 30.9.2014; and

(ii) in respect of the balance of 15% of the demand, the petitioner shall furnish bank guarantee.

Upon the petitioner complying with these two conditions, there will be an interim stay pending disposal of the appeal before the second respondent. No costs. Consequently, the above MP is closed.