THE SHRI SAIBABA SANSTHAN TRUST (SHIRDI) VS. UOI (BOMBAY HIGH COURT), W P NO: 939 OF 2018
DATE:
27-03-2018
Summarised Judgement (Scroll for Complete Judgement)
Tax Recovery: CBDT
should investigate arm twisting measures, dehors application of the law,
adopted by the Revenue for recovery of tax and take corrective measures to
ensure AOs are not overzealous in recovering maximum revenue before 31st March.
Once the CIT(A) concludes hearing the appeal, the stay application becomes infructuous.
The exercise by CIT(A) of taking up the stay application, after the appeal was
heard, was only done so as to collect some revenue before 31st March, 2018.
This is certainly not expected of an Appellate Authority who adjudicates
disputes between the Revenue and the Assessee on a regular basis. The CIT(A)
must not only be fair but appear to be so, in a country governed by Rule of
law.
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Complete Judgement
Supreme
Court
The
Shri Saibaba Sansthan ... vs The Union Of India Ministry Of ... on 18 January,
2019
IN
THE SUPREME COURT OF INDIA
CIVIL
APPELLATE JURISDICTION
CIVIL
APPEAL NO(S).1070/2019
(Arising
out of Special Leave Petition(C) No(s). 30475/2018)
THE
SHRI SAIBABA SANSTHAN TRUST(SHIRDI)................ APPELLANT(s)
VERSUS
THE
UNION OF INDIA & ORS............... RESPONDENT(s)
O R D E R
Leave granted.
The appeal arises from
a judgment of the High Court of Judicature at Bombay dated 24 October 2018. The
High Court disposed of a writ petition instituted by the appellant for
challenging the notice dated 23 March 2018 issued by the Deputy Commissioner of
Income Tax (Exemption) (2) (1) Mumbai under Section 148 of the Income Tax Act 1961
for reopening the assessment for Assessment Year 2013-14.
Signature Not Verified
Digitally signed by ASHWANI KUMAR The issue pertaining to the taxability of
anonymous Date: 2019.01.24 17:08:53 IST Reason:
Donations received in
Hundies maintained by the temple trust under Section 115BBC of Income Tax Act,
1961 is pending determination before the Commissioner of Income Tax (Appeals)
for Assessment Year 2015-16.
When the High Court was
moved in the writ proceedings for challenging the reopening of the assessment
for Assessment Year 2013-14, the Court observed that the objections to the
reopening of the assessment are the same as those before the Commissioner of
Income Tax (Appeals) for Assessment Year 2015-16. Observing that any expression
of opinion on the reopening of the assessment will affect the pending appeal
before the Commissioner of Tax (Appeals), the High Court disposed of the writ
petition, keeping open the challenge to be raised in appropriate legal
proceedings.
Mr. S. Ganesh, learned
senior counsel appearing on behalf of the appellant submits that the issue
which is raised falls in a narrow frame. According to the appellant, Sections
19 and 21 of the Shri Saibaba Sansthan Trust (Shirdi) Act, 2004 indicates that
the appellant is both a religious as well as a charitable trust and is,
therefore, trust of a mixed character. Hence, it has been submitted that having
regard to the provisions of Clause (b) of sub-Section (2) of Section 115BBC
read with the Circular of the CBDT dated 20 December 2006, anonymous donations
which are received in Hundies without any specific directions for use for
medical-and educational purposes do not fall within the ambit of the statutory
provisions.
On the other hand, Mr.
Vikramjit Banerjee, learned Additional Solicitor General appearing on the
behalf of the Union of India has supported the judgment of the High Court. Mr.
Banerjee urged that any determination on the issue whether there was a reason
to believe that the appellant's income for Assessment Year 2013-14 had escaped
assessment would inevitably lead to a final determination of the issue which is
pending before the Commissioner of Income Tax (Appeals). Hence, it is urged
that the appellant should be left to pursue its remedies after the assessment
is completed for Assessment Year 2013-14.
The grievance that the
High Court ought to have dealt with the challenge to the reopening of the
assessment on the ground that there was no reason to believe that income had
escaped assessment has to be appreciated in the context of the facts of the
present case. The applicability of Section 115BBC is the central issue which is
pending before the Commissioner of Income Tax (Appeals) for Assessment Year
2015-16. In this view of the matter, we are of the view that the High Court has
justifiably held that it would not be appropriate to exercise jurisdiction
under Article 226 when the same issue is already pending before the
Commissioner of Income Tax (Appeals) for Assessment Year 2015-16.
Mr. Ganesh urged that
if an order of assessment is passed in the present case, the appellant would
inevitably be relegated to pursue the remedies to seek a stay of recovery and
hence it would be appropriate if the High Court is directed to decide the issue
afresh. We are not inclined to accede to that submission. We find that the High
Court was justified in deciding not to enter upon a decision on an issue which
is pending before the Commissioner of Income Tax (Appeals). For Assessment Year
2015-16, a Division Bench of the High Court passed an order on 27 March, 2018
in Writ Petition No. 939 of 2018 in the following terms on the issue of stay of
recovery:
"In the above
view, we set aside the order dated 23rd March, 2018 passed by the CIT(A) on the
Petitioner's stay application. We direct the respondent-Revenue not to initiate
any recovery proceedings against the Petitioner till such time as the
CIT(A)-Respondent No. 3 disposes of the Petitioner's appeal from the order
dated 31st December, 2017 of the Assessing Officer-Respondent No. 2 ad for a
period of two weeks after the communication of the order of the CIT(A) to the
Petitioner."
The above order was
passed in a petition challenging the refusal of the Commissioner of Income Tax
(Appeals) to stay recovery during the pendency of the appellate proceedings.
The appellant would be sufficiently protected, if the same protection which was
granted by the High Court in the order dated 22 March 2018 for Assessment Year
2015-16, is granted in the event that an order of assessment is passed for
Assessment Year 2013-14.
Hence, we direct as
follows:
i). The Assessing
Officer shall complete the assessment for Assessment Year 2013-14 pursuant to
the notice for reassessment which has been issued on 23 March 2018, in
accordance with law;
ii). The issue as to
whether the notice under Section 148 for reopening the assessment for
Assessment Year 2013-14 is valid is kept open to be urged in appropriate
proceedings after the assessment order is passed;
iii). Upon the passing
of the order of assessment for Assessment Year 2013-14 and in order to enable
the assessee to pursue its remedies before the Commissioner of Income Tax
(Appeals) there shall be an interim protection in terms of the order dated 27
March 2018 that was passed by the Division Bench of the Bombay High Court in
Writ Petition No. 939 of 2018;
iv). Both the appeals
for the Assessment Years 2013-14 and 2015-16 shall be heard together by the
Commissioner of Income Tax (Appeals);
v). The appellant shall
be at liberty to pursue its remedies in accordance with law.
The appeal is disposed
of in the above terms. No costs.
.............................J.
[DR.DHANANJAYA Y. CHANDRACHUD] .... ........................J.
[M.R. SHAH] NEW DELHI;
JANUARY 18, 2019.
ITEM NO.56 COURT NO.11 SECTION IX
S U P R E M E C O U R T
O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special
Leave to Appeal (C) No(s). 30475/2018
(Arising out of
impugned final judgment and order dated 24-10-2018 in WPL No. 3278/2018 passed
by the High Court Of Judicature At Bombay) THE SHRI SAIBABA SANSTHAN
TRUST(SHIRDI) Petitioner(s) VERSUS THE UNION OF INDIA & ORS. Respondent(s)
Date : 18-01-2019 This petition was called on for hearing today. CORAM :
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD HON'BLE MR. JUSTICE M.R. SHAH For
Petitioner(s) Mr. S. Ganesh, Sr. Adv.
Mr. R. P. Gupta, AOR
For Respondent(s) Mr. Vikramjit Banerjee, ASG Mr. Shekhar Vyas, Adv.
Mr. S.A. Haseeb, Adv.
Ms. Swarupama
Chaturvedi, Adv.
Mrs. Anil Katiyar, AOR
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal is disposed
of in terms of the signed order. Pending application(s), if any, stands
disposed of accordingly.
(ASHWANI THAKUR) (SAROJ
KUMARI GAUR)
COURT MASTER (SH) BRANCH OFFICER
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