Mr. S.k. Pattnaik, Sr. Adv. Along Withmr. P.k. Pattnaik, Adv v. Commissioner Of Income Tax

W.P.(C). No. 37304 of 2023 ….. OFDC, Ltd. Employees Gratuity Trust, BBSR Petitioner Mr. S.K. Pattnaik, Sr. Adv. along withMr. P.K. Pattnaik, Adv. Vs. ….. Commissioner of Income Tax Opposite Parties Mr. A. Kedia, Jr. Standing Counsel,Income Tax Deptt. (Appeals) and others CORAM: ACTING CHIEF JUSTICE DR. B.R. SARANGI MR. JUSTICE MURAHARI SRI RAMAN ORDER17.11.2023 Order No.01. This matter is taken up by hybrid mode. 2. Heard Mr. S.K. Pattnaik, learned Senior Counsel appearing along with Mr. P.K. Pattnaik, learned counsel for the petitioner and Mr. A. Kedia, learned Jr. Standing Counsel appearing for Income Tax Department. 3. The petitioner has filed this writ petition seeking to quash the order dated 30.10.2023 passed by the C.I.T. (Exemption), Hyderabad under Annexure-15in DIN & Letter No.ITBA/COM/F/17/2023-24/ 1057517511(1) and further seeks to stay realization of demand in respect of M/s Orissa Forest Development Corporation (AAATO2151Q) for the assessment year 2018-19 till disposal of the appeal pending before the CIT (Appeals) NFAC, New Delhi. 4. Mr. S.K. Pattnaik, learned Senior Counsel appearing along with Mr. P.K. Pattnaik, learned counsel for the petitioner contended that in respect of Orissa Forest Development CorporationEmployee’s Gratuity Trust, assessment under Section 144 was completed for the assessment year 2018-19, which resulted in demand of Rs.10,08,57.291/-, which is subsequently modified under Section 154 of the Income Tax Act by deleting Rs.37,95,660/- which is interest under Section 234C. Aggrieved by the said order, the assessee preferred appeal before the CIT (A) of National Faceless Appeal Centre. Thereafter, the assessee filed a petition before the Assessing Officer for grant of stay, as it filed appeal before the CIT (A) of National Faceless Appeal Centre. But the Assessing Officer in terms of the CBDT office memorandum dated 29.02.2016 and 31.07.2017 directed the assessee to pay 20% of the outstanding demand, against which the petitioner has approached this Court by filing the present writ petition. It is contended that the petitioner-trust is exempted to pay any dues in view of Section 10 (25) of the Income Tax Act and, as such, when the demand which has been raised for the assessment year 2018-19 is not liable for payment bythe petitioner, question of direction to pay 20% of the demanded amount for grant of stay of recovery of remaining amount, does not arise and the same cannot be sustained in the eye of law. 5. Mr. A. Kedia, learned Jr. Standing Counsel appearing for Income Tax Department contended that against the order of demand, the petitioner has already filed appeal, which is pending for consideration. But for grant of interim order of stay realization of demand, the petitioner moved the Assessing Authority, but the Assessing Authority directed to pay 20% of the outstanding demand, in view of the CBDT office memorandum dated 29.02.2016 and 31.07.2017. It is further contended that the apex Court in Principal Commissioner of Income Tax v. M/s LG Electronics India Pvt. Ltd., (2018) 18 SCC 447, has clarified the position that it will be open to the authorities, on the facts of individual cases to allowdeposit of a lesser amount than 20%, pending appeal. Thus, it is contended that the apex Court has directed in conformity with the CBDT guidelines to pay certain amount for grant of stay of the demand raised by the authority. Thereby, the order impugned cannot be said to be illegal, arbitrary and contrary to the provisions of law so as to warrant interference of this Court. Commissioner of Income Tax v. M/s LG Electronics India Pvt. Ltd., (2018) 18 SCC 447, has clarified the position that it will be open to the authorities, on the facts of individual cases to allowdeposit of a lesser amount than 20%, pending appeal. Thus, it is contended that the apex Court has directed in conformity with the CBDT guidelines to pay certain amount for grant of stay of the demand raised by the authority. Thereby, the order impugned cannot be said to be illegal, arbitrary and contrary to the provisions of law so as to warrant interference of this Court. 6. Having heard learned counsel for the parties and after going through the records, this Court finds that contention has been raised by Mr. S.K. Pattnaik, learned Senior Counsel appearing along with Mr. P.K. Pattnaik, learned counsel for the petitioner that the petitioner-trust is exempted to pay any amount and, as such, the demand so raised by the authority cannot be sustained in the eye of law. But this Court is not inclined to enter into the controversy as towhether the petitioner is liable to pay any amount or not, and whether the petitioner is an exempted trust or not, as because the matter is pending before the CIT (A) National Faceless Appeal Centre. But fact remains, when demand has been raised and the petitioner preferred appeal, when the same is pending, at that point of time, the petitioner filed an application for grant of stay of demand, which has been considered. But as per the CBDT guidelines dated 29.02.2016 and 31.07.2017, the assessee has to pay 20% of the outstanding demand. Therefore, out of the total demand raised by the authority, in view of the CBDT guidelines, the petitioner has to pay 20% thereof, subject to final outcome of the appeal, which has been preferred by it. Therefore, if that amount of 20% is deposited, which is about Rs.1.50 crores for the assessment year 2018-19 by 15[th]November, 2023, then further balance demand shall be stayed subject to outcome of result of the appeal pending before the CIT (A). Furthermore, the CBDT guidelines have also been taken into consideration by the apex Court in Principal Commissioner of Income Tax (supra), where the apex Court clarified that the amount of deposit may be lesser than 20% in pending appeal, but has not exempted from payment of any amount in the pending appeal. 7. In the above view of the matter, since the order impugned has been passed in consonance with the CBDT guidelines, as well as the order passed by the apex Court directing the assessee to deposit 20% of the demanded amount subject to outcome of appeal pending before the appellate authority, this Court is not inclined to entertain this writ petition. However, the appellate authority is directed to decide appeal of the petitioner as expeditiously as possible, taking into consideration the status of the petitioner-Trust, as alleged in the writ petition. 8. Accordingly, the writ petition stands disposed of. (DR. B.R. SARANGI) ACTING CHIEF JUSTICE (M.S. RAMAN) JUDGE Ashok Signature Not Verified Digitally SignedSigned by: ASHOK KUMAR JAGADEB MOHAPATRADesignation: Personal AssistantReason: AuthenticationLocation: HIGH COURT OF ORISSADate: 20-Nov-2023 14:53:08