2012-13, 2013-14, 2014-15, 2015-16 & 2016-17
Therefore, at the end ITAT approved to stay the outstanding demand for a period of six months from the date of this order or till disposal of the appeals, whichever is earlier, provided the assessee deposits the above noted amounts within the prescribed period.
FULL TEXT OF THE ITAT JUDGEMENT
These Stay Petitions have been filed by the assessee with a request to stay the recovery of demand of Rs.4,54,65,690/- for assessment year 2012-13, Rs.52,52,74,380/- for assessment year 2013-14, Rs.1,26,35,77,950/- for assessment year 2014-15, Rs.1,21,14,26,680/- for assessment year 2015-16 and Rs.93,58, 17,342/- for assessment year 2016-17, totaling to Rs. 3,98, 15,62,042/-, till disposal of the appeal.
2. The demand has risen due to additions made by the Assessing Officer by rejecting the exemption under section 11 of the Act by holding that the assessee had given benefit to its employees by giving them priority in allotments as well as concessions in the prices of plots and, therefore, was hit by the provisions of section 13(3) of the Act.
3. In pursuance to our directions dated 4/2/2020, the ld. R. filed the details of employees regarding the benefit to them in the form of concessions in the allotment of plots, and argued that since the assessee has allotted plots to its employees on concessional basis therefore, there is violation of section 13(3) of the Income Tax Act, and therefore, the stay application filed by the assessee is liable to be dismissed.
4. The ld. Counsel for the assessee, on the other hand, has stated that the employees of the assessee Pradikaran are not Managers of the Pradikaran, as they are doing routine work assigned to them and they are not involved in the management of the assessee Pradikaran. He further submitted that they are also not entrusted with taking managerial/strategic decisions. Moreover, the benefit to the employees has been given as a declared policy as notified in the Pradikaran Rules. The ld. Counsel for the assessee further submitted that the assessee is not a trust but an Institution and therefore, the provisions of section 13(3) of the Act will be attracted only if the benefit has been given to Manager. For the proposition that the employees are not Managers, the ld. Counsel for the assessee relied on the following case law:
1. CIT vs. Tata Steel Charitable Trust, 203 ITR 764 (Patna)
5. Accordingly, the ld. Counsel for the assessee prayed that since the assessee has already deposited 20% of the disputed tax and the assessee has been able to make out a prima facie case, due to which, the balance of convenience is in favour of the assessee, the demand sought by the Department may kindly be stayed.
6. The ld. D.R., however, objected to the contentions of the ld. Counsel for the assessee that the employees of the assessee Parishad are not covered by the provisions of section 13(3) of the Income Tax Act. The ld. D.R. heavily placed reliance on the following case laws for the proposition that the employees are covered for the purpose of violation of section 13(3) of the Act:
1. CIT vs. Awadh Educational Society, dated 13/9/2011 (Alld)
2. DIT vs. Maruti Center for Excellence, 208 Taxman 236 (Delhi)
3. Noida Entrepreneurs Association vs. NOIDA & Ors. (SC), WP (Civil) No.150 of 1997, dated 9th May, 2011
7. We find from the details certified by the Assessing Officer, vide letter dated 14/2/2020 (copy placed on record), that none of the core persons of the assessee Pradikaran got any preferential or concessional allotment of plots. Further, it is the Department’s own case that the allotments purportedly in violation of section 13(3) of the Act have been made to the employees of the assessee Pradikaran. There is no rebuttal, however, to the assertion on behalf of the assessee that these employees are not acting in any Managerial capacity, so far as regards the discharge of their duties under the Pradikaran; and that the specific requirement of the section is concerning Managers and not employees. Therefore, the assessee has a prima facie case in its favour and as such the balance of convenience is also in its favour. However, keeping in view the interest of justice to both the parties, we direct the assessee to deposit an amount of Rs.20 crores, out of total outstanding demand of Rs.3,98, 15,62,042/-, in two installments of Rs. 10 crores each and the first installment is to be paid latest by 29th February, 2020 and the second installment is to be paid latest by 15th March, 2020. The appeals of the assessee are accordingly adjourned for hearing to 23rd March 2020. With these directions, we stay the outstanding demand for a period of six months from the date of this order or till disposal of the appeals, whichever is earlier, provided the assessee deposits the above noted amounts within the prescribed period.
8. In the result, the stay applications of the assessee are allowed as indicated above.