Wp/28228/2025 Of Darul Uloom Rahmania v. The Commissioner Of Income Tax (Exemption)

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD(Special Original Jurisdiction) FRIDAY, THE NINETEENTH DAY OF SEPTEMBERTWO IHOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE THE CHIEF JUSTICE APARESH KUMAR SINGHANDTHE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WRIT PETITION NO: 28228 OF 2025 Between: Darul Uloom Rahmania, 23-1-43313, Range l, KhadikiTalab Katta, tt/lirjumlaYakutpura, Hyderabad, Telangana - 500023, lndia,PAN. AACAD2902PRepresented by the General Secretary lVlohammedGayasuddin Ansari,S/o.Itr'lohammed Shamsuddin Ansari aged about 66 years ...PETITIONER AND 1The Commissioner of lncome Tax (Exemption), Aayakar Bhavan, Opp. L.B.Stadium, Basheerbagh, Hyderabad - 500004.Stadium, Basheerbagh, Hyderabad - 500004. 2Centralized Processing Center, 1st Floor, Prestige Alpha No 4Bl1 and 4812,Beratenaagrahara Begur, Hosur Road, Uttarahalli Hobli, Bengaluru,Karnataka - 560100Beratenaagrahara Begur, Hosur Road, Uttarahalli Hobli, Bengaluru,Karnataka - 560100 3 The lncome Tax Officer, (Exemption), Ward 1(1), Aayakar Bhawan, OppositeLB Stadium, Basheer Bagh, Hyderabad - 500004.LB Stadium, Basheer Bagh, Hyderabad - 500004. ...RESPONDENTS Petition under Article 226 of lhe Constrtution of lndia praying that in thecircumstances stated in the affidavit filed therewith, the High Court may becircumstances stated in the affidavit filed therewith, the High Court may bepleased to issue a Writ, order or direction more particularly one in the nature of awrit of Mandamus declarinE. (i) The lmpugned Order dated 2310812025 rejectingwrit of Mandamus declarinE. (i) The lmpugned Order dated 2310812025 rejectingthe stay application of the Petitioner bearing DIN No. ITBA/COM/F/'1 7 /2025-2611079515941 (1) by Respondent No. 1 for the Assessment Year 2014-15,asarbitrary, illegal, unsustainable in law, without application of mind, against the2611079515941 (1) by Respondent No. 1 for the Assessment Year 2014-15,asarbitrary, illegal, unsustainable in law, without application of mind, against theprovisions of the lncome Tax Act, 1961 and in violation of principles of naturaljustice and (ii) consequently, quash the same and (iii) grant stay of recovery ofjustice and (ii) consequently, quash the same and (iii) grant stay of recovery ofdemand till the disposal of the appeal e-filed by the Petitioner on 2411012024 with acknowledgement No. 6381667 30241024pend ing before lhe learned (A)/National Faceless Appeal Center (NFAC) lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circ,tmstances stated [in] the affidavit filed in sLrpport of the [petition, ]the High Court may be [pleased]pleased to stay the recovery of all taxes pursuant to the orde:r dated 2310812025bearing DIN No. ITBA/COIV/F/1712025-2611079915941(1) [passr:d ]by RespondentNo. 1 for the Assessment Year 2014-15. Counsel for the Petitioner : SRI DT.C.P.RAMASWAMI Counsel for the Respondents: SRI VIJHAY K PUNNA, (SENIOR SC FOR ITD)The Court made the following: ORDER THE HON'BLE THE CHIEF JUSTICE SRI APARBSH [KI'MAR ] ANDTHE HON'BLE SRI JUSTICE G,M.MOHII'DDIN WRIT PETITION No.28228 of 2025 ORDER: Learned counsel Dr. C.P.Ramaswami appears for [the]pe titioner Sri VShay K. Punna, learned Senior [Standing] Counsel for Income Tax Department, appears for [the]re sponden ts. 2. The application for stay on the recovery of [the]demand of Rs.98,62,830/- pending the appeal [preferred ][by]the petitioner on 24.10.2024 in respect of the [assessment]year 2074-2015 has been rejected by the Commissioner ofIncome Tax [(Exemption)]respondent No.1, by thefollowing order dated 23.O8.2025 impugned [herein](Annexure P- 1) "GOVERNMENT MINISTRY OF FINANCEINCOME TAX DEPARTMENTcrr [(EXEMPTION), ][tryD]ToDarul Uloom Rahmania23-l-133/3, Rangcli [I( ]had [ik ][i]Tala b l(arta500023, Telangar)aIndia I \ Sir, Madam/M/s, Subjcct: Online senrice of Orders - Letter ORDER: Learned counsel Dr. C.P.Ramaswami appears for [the]pe titioner Sri VShay K. Punna, learned Senior [Standing] Counsel for Income Tax Department, appears for [the]re sponden ts. 2. The application for stay on the recovery of [the]demand of Rs.98,62,830/- pending the appeal [preferred ][by]the petitioner on 24.10.2024 in respect of the [assessment]year 2074-2015 has been rejected by the Commissioner ofIncome Tax [(Exemption)]respondent No.1, by thefollowing order dated 23.O8.2025 impugned [herein](Annexure P- 1) "GOVERNMENT MINISTRY OF FINANCEINCOME TAX DEPARTMENTcrr [(EXEMPTION), ][tryD]ToDarul Uloom Rahmania23-l-133/3, Rangcli [I( ]had [ik ][i]Tala b l(arta500023, Telangar)aIndia I \ Sir, Madam/M/s, Subjcct: Online senrice of Orders - Letter Sub: Decision on Stay Application - Request for PartialPayment - Reg. This is with reicrence to ]'our application for sta_r' of coli,r t ion ofta-\cs. sL bmittcd belore the Commissioner oI Inco:rc ['l'ax](Exernpticns), ilyclerabad. ns per lhis the dcr,rand pa.,r. I c arcas u nder: After carefully cxamining all relevant facts and circumstanccsof your case, and also considering the recent order of theHon'ble Andhra Pradesh Hlgh Court in the case of \t':: TheGeneral and T<zchntcal Education Soclety (IA No.1_ of 2025 i;t WPof your case, and also considering the recent order of theHon'ble Andhra Pradesh Hlgh Court in the case of \t':: TheGeneral and T<zchntcal Education Soclety (IA No.1_ of 2025 i;t WPNo.12728 of ['2025) ]and also considering the Hon'ble Flish i)ourtof ['lelangilna ]crrder in the case of Zoos and Parks Auih)t tA ofTelangano u. {:lT (E) (2024) 467 ITR 235 (Telar,gana) /,1(:1, }.ourstay appli:atiorl has bcen consldered.It is, therefore, decided that your stay petitior is conr,ideredprovlded you pay an amount of RS.2OOOOOO/- on or beforeO1.O9.2O25 and produce copies of challans befo:'e theAssessing Offrcer of your case and marked a copy to theunderslgned.of ['lelangilna ]crrder in the case of Zoos and Parks Auih)t tA ofTelangano u. {:lT (E) (2024) 467 ITR 235 (Telar,gana) /,1(:1, }.ourstay appli:atiorl has bcen consldered.It is, therefore, decided that your stay petitior is conr,ideredprovlded you pay an amount of RS.2OOOOOO/- on or beforeO1.O9.2O25 and produce copies of challans befo:'e theAssessing Offrcer of your case and marked a copy to theunderslgned. Please no e thzrt if ,\ ou fall to comply with this directi\': t i thedue date, thc Assesslng Officer will be at liberty to injtiatecoercive recovery proceedings uncler scctlon 226(-:l o: theI.T.Act, 1961 without any further communication.Further r',ru arc informed to treat this matter \vith urger,-l andensure compliance ulthin the stipulated timelrame to a\'ol, anYfurther action try the Department. BALA KRISHNA E]A IULA crT(ExtrMPIrOt l. HYD --fl , Copy to 1 Assessing Oflicer.2. Additional Commissioner [oI Income Tax (Exmp), Hyderabad] BALA KRISHNA BAT'TULACIT(EXEMPTION), [HYD"] Please no e thzrt if ,\ ou fall to comply with this directi\': t i thedue date, thc Assesslng Officer will be at liberty to injtiatecoercive recovery proceedings uncler scctlon 226(-:l o: theI.T.Act, 1961 without any further communication.Further r',ru arc informed to treat this matter \vith urger,-l andensure compliance ulthin the stipulated timelrame to a\'ol, anYfurther action try the Department. BALA KRISHNA E]A IULA crT(ExtrMPIrOt l. HYD --fl , Copy to 1 Assessing Oflicer.2. Additional Commissioner [oI Income Tax (Exmp), Hyderabad] BALA KRISHNA BAT'TULACIT(EXEMPTION), [HYD"] 3. The petitioner had [claimed ][an ][exemption ][of]Rs.1,88,69,321 l- under Section [1 ][1 ][of ][the ][Income Tax ][Act,]196 1 (hereinafter referred [to ][as, ]"the [Act"), ][and ][declared]"NIL" income in its return [for the ][assessment ][year 2Ol4-]2015. At the relevant [point of ][time, ][the ][petitioner, ][who]claims to be a religious [society ][constituted on ][07 ][.10. ][199 ][1]to provide educational facilities [without ][profit ][motive ][and]not to carry on any commerciai [activities ][in ][that ][regard, did]not have any registration [under ][Section ][l2Al ][72AA ][of ][the]Act, which was later [granted on ][30.ll.2ol7. ] [demand ][of]Rs.98,62,830/- was [raised ][upon ][processing ][its return ][and]an intimation under Section [1a3(1) ][of ][the Act was ][sent ][to]the petitioner. It [preferred ][rectification application under]Section 154 of the Act [in ][January ][2Ol7 ][and ][later ][again ][on]05.02.2018 upon grant [of registration ][under ][Section ][12AA]of the Act claiming the benefit [of ][exemption ][for ][three ][prior]years as per the proviso to [Section ][l2A(2\ ][of ][the ][Act' ][The]rectification application [was ][rejected ][on ][24.O9 ]'2024 ' [The] II petitioner thereafter filed an appeal against such rejection,which is pending. pending appeal, it filed the rapplicationfor stay before respondent No.l, inter alia, takiny; a numberof grounds such as, that it has more than a ,..trima faciecase in its favour and the baiance of convenie-r,::e is alsorveighed agerinst the revenue. According to the ;retitioner,the order of rejection of the rectification app1lr:ertion wasbarred by limitation by six years in terms of sub-sectlon (g)of Section 154 of the Act. The petitioner also r,jled uponthe Central Board of Direct Taxation (CBDT) CircularNo.320, dated 1 1.01. 1982. The petitioner cont€ n ded thatthe majority of income received during the relevantfinancial year comprised of voluntary conrributionsreceived in India and the foreign contributions. Thepetitioner also pleaded that it is eligible for exemption andthe surplus income, if any, shall be taxable r.rnder thenormal rates, As such, it was not liable to pay the tax andno demand shou]d have been raised.4 . LearneC counsel for the petitioner submits t.hat theimpugned orcler, however, in a cryptic ma.ner direr::ted thepetitioner to pay an amount of Rs.20,00,000/_ on or before -r -r Ol .Og.2025 [and failure to comph'thereu'ith ][u'ould ][lead ][to]initiation of coercive [recovery proceedings ][under ][Section]226(g\ of the [Act ][without ][any ][further communication' ][The]respondent [No.1 ][has, ][in ][the impugned order' not ][dealt ][with]of the [grounds ][urged ][for ][stay ][of ][the ][demand']any the [petitioner, ][being ][aggrieved' ][has ][approached]Therefore, this Court.5. Learned counsel [for ][the ][respondents ][has ][supported]the impugned [order. It ][is ][submitted ][that ][respondent ][No' ][1]has taken into [consideration ][the ][decisions rendered ][by ][the]jurisdictional High Court [and held ][to ][be applicable ][to ][the]factsandcircumstancesofthecaseofthepetitioner.Therefore, no [blanket ][stal' ][of ][the ][demand ][has ][been]granted. Instead, [15"/o ][of ][the ][total ][demand ][has ][been]directed to be [deposited. ][Learned ][counsel ][for ][the]respondent [has, ][hor'"'ever, ][not ][been ][able ][to ][dispute ][that ][the]specific grounds [urged ][by ][the ][petitioner ][in ][the ][stay]application [have ][not ][been ][dealt ][with ][by ][the ][respondent]No.1 in the [imPugned ][order.] II 6. We have considered the submissions ol [re ][learned]counsel for the [parties.] 7. The impugned order has been quoted [lrt:reinabove.]The grounds urged by the [petitioner ][in ][the ][stal ][I'Lpplication]are contained the writ affidavit and [also ][in ][AnrLexure ][P-14,]dated 14.1.2.2024. As noted [above, ][responde:rt No.1 ][has]failed to deal with the specific [grounds ][urg-'d ][by ][the]petitioner in the impugned order, except [relyirrl1 ][upon ][the]two decisions of this Court [which, ]in [his ][opinion, ][were]relevant to the facts and circumstances [of the ][,::ase ][of ][the]petitioner. As such, we are of the [.opinion ][that ][the]impugned order lacks reasons and [applicatiorL ][rf ][mind ][to]the specific grounds urged by the [petitioner ][ir1 ][the ][sta,v]applicatr ol i. 8. In that view of the matter, [we are ][inclirl ][t:d ][to ][remrt],'the matGr to respondenL No. 1 to take a fresh <:iecision onthe stay apptcation of the [petitioner ][in ][accorrlance with]1aw'within a period of four [weeks ][from the ][date ][of ][receipt oI]a copy of thls order, after [giving ][an ][opporturril.y ][of ][being] { heard to the petitioner. The impugned order, dated 23.08.2025, is accordingly set aside. 9. The writ petition is accordingly disposed of. However,there shall be no order as to costs. Miscellaneous applications pending, if any, shall stand closed. SD/-P. PONNA Asstsrnxr [REGIsTRAR ]/,/@SECTION //TRUE To,1The Commissioner [of ][lncome ][Tax ][(Ex-emption), ][Aayakar ][Bhavan, ][opp. ][L.B,]si;i;, Br.hleioasn [HYderabad - 5oooo4]1The Commissioner [of ][lncome ][Tax ][(Ex-emption), ][Aayakar ][Bhavan, ][opp. ][L.B,]si;i;, Br.hleioasn [HYderabad - 5oooo4] 2The Centralized [Processrng ][Center' ][1st ][Floor' ][Prestige ][Aloha ][No ][4Bl1 ][and]48 t2. Ber [atenaasrah ][ara ][B"'s;; ][ii;d';tl'-a' ][Utt'iini ][iti ][Hbbli' ][Bensalu ru']Karnataka [- 560100]48 t2. Ber [atenaasrah ][ara ][B"'s;; ][ii;d';tl'-a' ][Utt'iini ][iti ][Hbbli' ][Bensalu ru']Karnataka [- 560100] JThe lncome [Tax Officer, ][(Exemption), ][Ward- ][1(!) ][Aayakar ][Bhawan' ][Opposite]iii'sffii;; [aZsn;eiealrr. ][Hvberarad ][- 500004]iii'sffii;; [aZsn;eiealrr. ][Hvberarad ][- 500004] One CC to [RAMASWAIUI' ][Advocate ][lOPUCl] 4 One CC to SRI [K PUNNA, (SENIOR SC ] [ITD) ][ ] 5 6Two CD CoPies BSKM,BSBS BS HIGH COURT DATE D : 1 910912025 ORDER WP.No.28228 of 2025 DISPOSING OF WITHOUT COSTS Iq td 2'- :fP 2U, r,l:t