Rajasthan Cricket Association, Jaipur & Anr v. Income Tax Officer & Ors

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. ORDER S.B. CIVIL WRIT PETITION No.17423/2013. Rajasthan Cricket Association, Jaipur & Anr. Vs.Income Tax Officer & Ors. Date of Order :- November 8, 2013. HON'BLE MR.JUSTICE MOHAMMAD RAFIQ Shri Prakul Sharma & Shri Manish Singh Lakhawat for the petitioners. Shri Anuroop Singhi and Shri Kushagra Sharma for the respondents. ****** BY THE COURT:- The writ petition is directed against the order dated03/09/2013 (Ann.5), whereby the attachment order dated29/08/2013 has been vacated and the Income-tax Departmentis going to make recovery of the tax demand from thepetitioner. An interim prayer has been made for stayingrecovery of the tax demand till the pendency of the appealbefore the Income Tax Appellate Tribunal. Though the matter islisted for deciding the stay petition seeking interim relief butarguments would suffice decision of the writ petition itself.Therefore, the matter is heard finally. Contention of the learned counsel for the petitioneris that petitioner filed appeal against the order passed by therespondents withdrawing the exemption granted to it and sincepresently, the Income Tax Appellate Tribunal is not functioning for want of quorum, it has approached this Court for appropriateinterim relief. Additionally, his argument is that rectificationapplication filed by the petitioner is pending before theassessing officer, which is sought on the ground that petitioneris entitled to depreciation claim, which has already been grantedto it in respect of the assessment-years 2008-09 and 2009-10by the Commissioner of Income Tax. Yet, the income-tax officerwhile framing fresh assessment-order in the subsequent order,has not given any benefit of that year to the petitioner. Learnedcounsel for the petitioner has submitted that Circular No.530issued by the C.B.D.T. dated 06/03/1989 under Section 220(6)of the Income-tax Act, 1961 (for short, the “Act of 1961”) hasprovided that if in respect of previous assessment year, anyinterpretation of law has been taken by the appellate authority,the demand in that respect for the subsequent year shall beliable to be stayed by the assessing officer if the issues arecovered by such interpretation in respect of the previous year.The assessing officer shall exercise its jurisdiction thereaboutunder Section 220(6) of the Act of 1961. Contention of the learned counsel for the petitioneris that on one hand the income tax officer is not deciding therectification application and on the other, the respondents arepressing for recovery and not even staying recovery of that partof the demand, which is covered by the interpretation taken bythe Commissioner of Income-tax allowing benefit of depreciationto the petitioner in respect of the previous years. Contention of the learned counsel for the petitioneris that on one hand the income tax officer is not deciding therectification application and on the other, the respondents arepressing for recovery and not even staying recovery of that partof the demand, which is covered by the interpretation taken bythe Commissioner of Income-tax allowing benefit of depreciationto the petitioner in respect of the previous years. Learned counsel for the respondents has opposedthe writ petition and argued that the exemption was withdrawnbecause Rajasthan Cricket Association cannot by any stretch ofimagination be considered as a charitable institution, hence itwas not entitled to any exemption. In any case, this issue has tobe decided by the Income Tax Appellate Tribunal. It is arguedthat similar writ petition was filed in respect of the previousassessment-years 2008-09 and 2009-10, being S.B. Civil WritPetition No.872/2012 even when the appeal was pending beforethe Income Tax Appellate Tribunal and at that time, the IncomeTax Appellate Tribunal was functioning. The Income TaxAppellate Tribunal has remanded the matter to theCommissioner of Income Tax, which again rejected claim forememption. Now, the appeal thereagainst is pending before theIncome Tax Appellate Tribunal. Learned counsel for therespondents has contended that the order of the Commissionerof Income-tax on the question of depreciation for previousyears, may have been appealed against by the Income-taxDepartment before the Income Tax Appellate Tribunal andtherefore on that ground also, the petitioner may not be entitledto any benefit. In any case, whenever the income-tax officer decidethis rectification application and whatever amount becomes dueto the petitioner as a consequence of rectification applicationbeing allowed, the same would be liable to be refunded to thepetitioner. In case, appeal filed by the petitioner against the withdrawal of exemption/cancellation of registration is allowed,consequential refund would be made together with statutoryrate of interest. This Court is not inclined to entertain this writpetition on merit particularly when the dispute is pending beforethe Income Tax Appellate Tribunal. This court however deems itappropriate to direct the Income-tax officer to decide therectification application filed by the petitioner within one monthit approaches him along with copy of this order. The petitionerwould also be entitled to file the application for appropriateinterim relief before the Income-tax officer along with copy ofCircular No.530 issued by the C.B.D.T. dated 06/03/1989, whomay on verification of the fact that the earlier order passed bythe Commissioner of Income Tax allowing benefit ofdepreciation to the petitioner has not been stayed by anyinterim order passed by the Income Tax Appellate Tribunal inappeal of the department, may pass appropriate order on thesaid application within one week from the date of making suchapplication. The recovery in addition to the above if any made,shall remain subject to final outcome of the appeal before theIncome Tax Appellate Tribunal. With that direction, the writ petition is disposed of. (MOHAMMAD RAFIQ), J. All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailedAnil Kumar GoyalSr.P.A. Cum JW