Income Tax Appellate Tribunal - Amritsar
Apeejay Education Society, Jalandhar vs Assessee on 26 March, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. A.D.JAIN, JUDICIAL MEMBER
AND SH. B.P.JAIN, ACCOUNTANT MEMBER
S.A.Nos. 6 to 10(Asr)2015
(Arising out of I.T.A. Nos.710 to 714(Asr)/2014)
Assessment years:2006-07, 2007-08, 2008-09, 2010-11 & 2011-12
PAN :
M/s. Apeejay Education Society, vs. Asstt. Commr. of Income Tax,
Jalandhar. Circle-III, Jalandhar.
(Appellant) (Respondent)
S.A.Nos. 02 to 05(Asr)2015
(Arising out of I.T.A. Nos.705 to 707 & 709(Asr)/2014)
Assessment years:2006-07, 2007-08, 2008-09 & 2011-12
PAN :
M/s.Rajeshwari Sangeet Academy Trust, vs. Asstt. Commr. of Income Tax,
Jalandhar. Circle-III, Jalandhar.
(Appellant) (Respondent)
Appellant by:S/Sh. Salil Kapoor & Vikas Jain, Advocates
Respondent by:Sh.Tarsem Lal, DR
Date of hearing:20/03/2015
Date of pronouncement:26/03/2015
ORDER
PER B.P.JAIN,AM:
These nine Stay Applications in the case of two assessees have been filed i.e. in the case of M/s. Apeejay Education Society, Jalandhar, for the assessment years 2006-07 to 2008-09, 2010-11 & 2011-12 and in the case of 2 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 M/s.Rajeshwari Sangeet Academy Trust for the assessment years 2006-07 to 2008-09 & 2011-12.
2. At the outset, the ld. Counsel for the assessee submitted two different charts with regard to both the assessees for the tax demand, interest, tax paid and balance amount outstanding, which for the sake of convenience are reproduced hereinbelow:
Apeejay Education Society Assessment Tax Interest Total Amount Balance at Total tax Amount Balance as Balance demand paid till the time of paid paid after on date excluding stay filing stay stay payable application application application A B C D=B+C E F+D-E G H=E+G I=F-G J=B-H 2006-07 68295890 65564094 133859984 39200000 94659984 5600000 44800000 89059984 23495890 2007-08 80115487 70261292 150376779 44100000 106276779 6300000 50400000 99976779 26715487 2008-09 103568179 78307032 181875211 53200000 128675211 7600000 60800000 121075211 42768179 2010-11 104501492 39834134 144335626 92246110 52089516 - 92,246110 52089516 12255382 2011-12 92242894 35037922 127280816 37100000 90180816 5300000 42400000 84880816 49842894 A 448723942 289004474 737728416 265846110 471882306 24800000 290646110 447082306 158077832 Rajeshwari Sangeet Academy Trust Assessment Tax Interest Total Amount Balance at Total Amount Balance Balance demand paid till the time of tax paid paid after as on date excluding stay filing stay stay payable application application application A B C D=B+C E F+D-E G H=E+G I=F-G J=B-H 2006-07 6397392 6378206 12775600 3850000 8925600 550000 4400000 8375600 1997392 2007-08 8334214 7308692 15642910 4550000 11092910 650000 5200000 10442910 3134214 2008-09 10309353 7422734 17732087 5250000 12482087 750000 6000000 11732087 4309353 2011-12 5248171 1994316 7242487 - 7242487 - - 7242487 5248171 30289130 23103948 53393084 13650000 39743084 1950000 156000000 37793084 14689130 3 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015
3. The Ld. Counsel for the assessee, Mr. Salil Kapoor, Advocate argued that the facts in the stay applications of both the assesses are identical and, therefore, he prayed to take up S.A. No.06(Asr)/2015 in the case of Apeejay Education Society for the assessment year 2006-07 first of all. The Stay Application for the assessment year 2006-07, is placed at PB 1-2 and short fact regarding demand and interest are, as per Annexure available at PB 3 to 10, which for the sake of convenience are reproduced hereinbelow:
1. "Prima facie case The present application is being moved, by the Applicant before the Hon'ble Income Tax Appellate Tribunal to seek stay of recovery proceedings initiated against the Applicant to recover the outstanding disputed demand amounting to Rs.9,46,59,984/- levied under the Income Tax Act as mentioned in Stay Application Form enclosed. The brief facts pertaining to the case are as under:
i. The Applicant submits that it is a society registered under the Societies Registration Act,1860 with the primary objective of imparting education and engaged in the activities of running of educational institutions. The Applicant started its first school in the year 1967 and is presently running more than 20 educational institutions, which are duly recognized/approved by CBSC/AICTE/PTU etc. The Copy of List of such institutes is annexed herewith as Annexure-1A. It is further submitted that presently, more than 26,000 students are studying at these schools/institutions.
ii. After repealing of section 10(22), w.e.f 01.04.1998, the Applicant got registered under section 12AA of the Act by 4 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 the order of the CIT dated 13.05.1999 w.e.f. 1.04.1998. The Applicant society was also granted registration under section 12AA of the Act by the Commissioner of Income Tax, Jalandhar vide order dated 13.05.1999 which was subsequently withdrawn by the CIT-II, Jalandhar vide his office order dated 25.03.2013, with retrospective effect from A.Y.2004-05. However, the registration granted to the Applicant was restored back by the Hon'ble ITAT, Amritsar vide order dated 8.05.2014 in ITA No.228(Asr)/2013, wherein the ITAT, held that the Applicant is entitled of the benefit of registration u/s 12AA of the Act(in Applicant's own case). The copy of Order dated 08.05.2014 is annexed herewith as Annexure-1B.
iii. The society has filed its original return of income for the year under consideration on 27.10.2006 declaring NIL income. On 22.03.2011, the Department carried out search operations under section 132 of the Act at the premises of Mr. Parag V. Kehta, in Mumbai. Mr. Parag V. Mehta had, in his statement record during the course of search on 22.03.2011, alleged admitted that he had given table space to various bogus companies. Based on his statement, the Department identified such allegedly bogus companies and then, carried out survey operations on such companies. One such company was Washington Software Ltd. (WSL) of which Mr. Sanjay D Sonawani was Managing Director..
iv. The statement of Mr. Sanjay D. Sonawani was recorded on 16.03.2011 under section 131 of the Act at Pune. In the said statement, he allegedly admitted that WSL was involved in providing accommodation entries to various entities/concerns including to Apeejay Group. Similarly, the Department also recorded further statements of Mr. Sanjay D. Sonawani on 12.04.2011 and 12.05.2011 (both at Mumbai) and on 30.12.2011 (at Pune).5 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015 v. Based on the aforesaid first statement dated 16.03.2011 of Mr. Sanjay D. Sonwani, on 29.03.2011, the Department conducted survey operations under section 133A of the Act on various premises of the Applicant and related parties. During the course of survey operations, genuineness of the software purchased by the Applicant from WSL was examined and statements of various persons associated with the management and functioning of Apeejay Group were recorded by the Department.
vi. The Applicant society's registration under section 12AA of the Act was subsequently withdrawn by the CIT-II, Jalandhar vide his office order dated 25.03.2013 with retrospective effect from A.Y.2004-05. The Applicant filed an appeal before an ITAT, Amritsar against this order. The Applicant pleaded before ITAT that
(a) Credibility of the statement of Mr. Sanjay D Sonwani is doubted • Contradiction in the statements.
• The Department had not sought any confirmation from the audit to verify the aforesaid averment.
(b) No corroborative evidence to support the statements Reference, in this regard, was made to the following decisions wherein it has been held that no addition/disallowance could be made merely on the basis of the statement recorded during the course of survey, if there is no corroborative evidence:
• CIT v. Dhingra Metal Works :328 ITR 384(Del.) • CIT v. Subhash Chand: ITA No.875/2010 • Paul Mathews and Sons v. CIT: 263 ITR 101 (Ker.) 6 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 • CIT v. Khader Khan & Sons :300 ITR 157 (Mad.) ---- SLP dismissed by SC • ITO v. Vijay Kumar Kesar: 327 ITR 497(Chh.) • TDI Marketing (p.) Ltd. v. ACIT: (2009) 28 SOT 215 (Del).
c) Statement recorded ex-parte cannt be relied upon in the absence of cross examination.
It is respectfully submitted that in the following judicial precedents it has been consistently held that ex-parte statements/recorded behind the back of the assessee cannot be relied upon without allowing opportunity of cross-examination of the witness/author of such document to the assessee and that material intended to be used against the assessee must be confronted to the assessee:
• Kishanchand Chellaram vs. CIT: 125 ITR 713(SC) • Sasraswati Industrial Syndicate Ltd vs. CIT: 237 ITR 1(SC) • State of Punjab vs. Bhagat Ram: AIR1974 SC 2335 • Kalra Glue Factory V. Sales Tax Tribunal: 167 ITR 498(SC) • CIT vs. Estern Commercial: 210 ITR 103, 110(Cal) • P.S. Abdul Majeed vs. STO: 209 ITR 821, 823 (Ker) • CIT vs. Sham Lal: 127 ITR 816 (P&H) • Mukand Singh and Sons. V. Presiding Officer: 107 STC 300(Punjab) • Anupam Agencies V. State of Punjab: 98 STC 338 (Punjab) • Prakash Chand Mehta V. CIT: 220 ITR 277, 279 (MP) • Sona Electric Company V. CIT:152 ITR 507 (Del) • CIT V. D.M. Doshi: 239 ITR 315(Guj) 7 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 • Amarjit Singh Bakshi (HUF) :263 ITR (AT) 75(Del) (TM) @ 151 • Mahesh Gulabarai Joshi V. CIT: 95 ITD 300(Mum.) • Monga Metals(P) Limited: 67 TTJ 247 (All.) • Sarita Devi Kajaria V. ITO: 89 ITD 109 (Kol) ™ • ITO V. Pukhraj N. Jain: 95 ITD 281 (Mum.)
d) Facts to establish installation of software purchased by the Applicant from WSL.
• The Applicant had placed on record completed documentary evidences, like year wise details of software purchased from WSL and details of payments made to WSL, copies of the reports generated from the software etc. • The Applicant had submitted before the CIT that the software purchased from WSL had been installed in the central server at the head office, which is of utmost importance and requires secrecy. It was also submitted that the Applicant had allocated the cost of the above software to various cost centers like schools, institutes etc. The Applicant had repeatedly requested the CIT to deploy some technical expert to visit head office to verify the installation of the above software.
• The Applicant had placed on record the report dated 11.09.2012 of Trident Information Systems Pvt. Ltd. In the said report, it has been certified.
• The software was installed in the central office of the Applicant. • The software has been developed by WSL having source code. • The software modules were functional since 2004 to 2011. 8 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015
e) No verification of the software being installed at head office had ever been taken up by the CIT.
f) Exemption under section 11/12 of the Act is wrongly denied without prejudice, exemption could be revoked only quo software expenses • CIT had not mentioned as to which person as defined under section 13(3) has been benefited so as to invoked provisions of section 13(1)© of the Act.
Reference, in this regard may be made to the decision of the Bangalore Bench of the Tribunal in the case of Krupanidhi Educational Trust v. DIT(E): 139 ITD 228 • It is respectfully submitted that an isolated/solitary instance of violation of any provision of section 13 could not result in complete denial of exemption under sections 11/12 of the Act.
Birla Vidhya Vihar: 136 ITR 445 Span Foundation vs. ITO: 2008 TIOL 108-ITAT-Del CIT v. Red Rose School: 163 Taxman 19 (Alld.) Institute of Science & Management v. CIT: [2012]53SOT 167 (Ranchi) The Copy of synopsis filed before the Hon'ble ITAT is annexed herewith as Annexure-1C.
vii. The Hon'ble ITAT after considering the submissions of the Appellant restored the registration U/s 12AA of the Act. viii. The AO on the basis of same statement recorded of Mr. Sanjay D. Sonawani and survey action taken by the Income Tax department issued notice U/s 148 for impugned assessment year. The AO on the basis of statement of Mr. Sanjay D. Sonawani concluded that the Applicant is hit by the provisions of Section 13(1)© r.w.s. 13(3) of the Act and computed the income under the provision of the Section 28- 44 of the Act. The AO further added all the Reserves & Provisions debited to Income and Expenditure Account to the income of the Applicant and disallowed the depreciation 9 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 pertaining to ERP software purchased from WSL. The CIT(A) upheld the order passed by an AO. The CIT(A) failed to appreciate that on the same facts and circumstances of the case Hon'ble ITAT restored the registration granted to the Appellant. The order of ld. CIT u/s 12AA dated 25.05.2013, canceling registration was over ruled by the ITAT vide order dated 08.05.2014 and registration was granted to the society.
ix. Without prejudice to the above submissions, the AO on identical facts has completed assessments at NIL for A.Y.2004-05 and 2009-10. The Copy of Assessment Orders is annexed herewith Annexure-1D.
2. Balance of Convenience: Balance of convenience lies in favour of the Applicant who has a strong full proof prima facie case in his favour.
3. Financial Hardship: The Applicant submits that if the relief's are not allowed the present appeal will be rendered infructuous and further the Income Tax Department will proceed to recover the demand in an unfair and unreasonable manner not warranted in law and thereafter seek to recover unlawful demands as also take other proceedings which will cause great hardship and inconvenience to the Applicant. The Applicant most respectfully reiterates that if the orders as prayed for are not granted great harms, irreparable loss, injustice and inconvenience will be caused to the Applicant. Request of applicant in case of high pitched Assessment is also supported by instruction No. 96 dated 21/08/1969 and instruction No.1914 dated 02/12/1993 issued by CBDT.
4. Prayer: The Hon'ble Bench may be pleased:-
(a) To stay the recovery proceeding of Rs.9,46,59,984/- levied under the Income Tax Act 1961 & enhanced tax dues. 10 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015
(b) To grant early hearing.
(c) To grant any other relief which the Hon'ble bench deems fit."
4. The ld. counsel for the assessee, Mr. Salil Kapoor, Advocate, at the outset, argued that for the assessment year 2006-07, the total tax demand as per chart reproduced hereinabove is Rs.6,82,95,890/- and apart from that the interest payable is outstanding at Rs.6,55,64,094/-, totaling Rs.13,38,59,984/- and the assessee has already paid Rs.4,48,00,000/-, which is 65% of the total tax due and 40% of total demand for the impugned year. Though, the assessee has already paid about 40% of the total demand for all these five years in the case of the assessee, Apeejay Education Society, which is evident from the chart reproduced hereinabove. The assessee has also filed brief synopsis, which has been placed on record in support of his arguments. The ld. counsel for the assessee argued that the assessee has a prima facie case, as submitted in the written submissions and brief synopsis and he relied upon the decision of the Hon'ble Gujarat High Court, in the case of Asstt. CIT vs. Stock Exchange, in Tax Appeal No.471 of 1999 and others dated 14.12.2010, where in para 14 of the judgment at PB 77, our attention was invited that the Hon'ble High Gujarat High held that once an assessee has been granted certification of exemption u/s 12AA of the Act, the conditions laid down under section 12A of the Act stand fulfilled. The 11 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 AO thereafter while framing assessment cannot ignore such certificate of exemption and question of the eligibility of the assessee for grant of benefits under sections 11 and 12.
5. He further argued that proviso to section 164(2) of the Act was ignored by the ld. CIT(A), where it is clearly mentioned in the said proviso that applicability of section 13(1)(c) & 13(1)(d) where the assessee has violated the provisions, it has to be taxed at the higher rate and whole income cannot be taxed. The reliance was placed in the case of Director of Income Tax (Exemptions) vs. Sheth Mafatlal Gagalbhai Foundation Trust, reported in 249 ITR 533 and CIT vs. Fr. Mullers Charitable Institutions in IT Apeal Nos. 588 & 589 of 2007 decided by the Hon'ble Karnataka High Court on 10.02.2014. Though, the assessee does not fall even under section 13(1)(c) or 13(1)(d) of the Act. The ld. counsel for the assessee, Mr. Salil Kapoor, relied upon the decision in the case of Valvoline Cummins Limited vs. DCIT, reported in 307 ITR 103 (Del.), where the returned income of the assessee was Rs.7.25 crores but the assessed income was Rs.58.68 crores, which is almost eight times the returned income and further the ld. counsel for the assessee has drawn our attention to Instruction No.96 dated 21.08.1989 issued by the CBDT, where the question was that income determined on assessment was substantially higher than the returned income 12 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 and whether collection of tax in dispute is to be held in abeyance till the decision on appeal, it was held by the Hon'ble High Court that the assessee would, in normal course, be entitled to an absolute stay of the demand on the basis of the above Instruction.
6. The Ld. counsel for the assessee further relied upon the decision of the Hon'ble Delhi High Court, in the case of Sour vs. DCIT, reported in 323 ITR 305( Delhi) (copy placed at PB 35-40), where our attention was invited to PB-39 where Instruction No.1914 of 1993 was relied upon where all previous instructions superseded the Instruction No. 96 mentioned hereinabove. It was held by the Hon'ble Delhi High Court in the case of Soul vs. DCIT (supra) that in suppression of all earlier instructions, the position obtained after the decision is restored in Valvoline Cummins Ltd. (supra) is not altered at all. It was held by the Hon'ble High Court that assessment was high pitched, which was 74 times the returned income and obviously that would fall within the expression 'unreasonably high pitched".
7. Further, reliance was placed by the ld. counsel for the assessee, in the case of Hooghly Mills Company Limited vs. Union of India, dated 22.09.1998 (1999) (108) ELT 637 (Calcutta) (copy placed at PB 48-50), where in para 15 at PB-59, it has been held by the Hon'ble High Court that the assessee has got a good prima facie case, it is not really necessary for the 13 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 assessee to satisfy the Court or the Tribunal or the appropriate authority, as the case may be, that it is guilt-aged one and is bound to succeed. It has been held time and again by the Courts that a strong prima facie case would mean that the case is an arguable one and fit for trial.
8. The ld. counsel for the assessee argued in view of the written submissions, brief synopsis, arguments and reliance placed on the decision of various of law that the assessee prima facie has a good case, having paid more than 55% of the tax paid and 40% of the demand. Therefore, he prayed to stay the recovery of the demand, as mentioned in the chart for the impugned year and since the facts are identical in other years of the assessee i.e. M/s. Apeejay Education society, the ld. counsel for the assessee argued that the balance of convenience lies in favour of the assessee, as the assessee has a strong full proof prima facie case in his favour.
9. As regards the financial hardship, it was argued that once the assessee has a prima facie case, the stay should not be rejected on the ground that the demand of tax did not cope with the financial hardship of the assessee and reliance on the decision of Hon'ble Bombay High Court, in the case of UTI Mutual Funds vs. ITO, W.P. 523 of 2013 (copy of order at PB-51 to 64) was placed and our attention was also invited to PB-63, of the decision Hon'ble Bombay High Court in the case of UTI Mutual Fund, where it has been 14 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 held that where a strong prima facie case has been made out calling up the petitioner to deposit, would itself occasion undue hardship. Where the issue has raised a strong prima facie case which requires serious consideration as in the present case, a requirement of pre-deposit would itself be a matter of hardship. Hon'ble Bombay High Court in its decision in the case of CEAT Limited vs. Union of India, has held that if the party has made out a strong prime facie case, that by itself would be a strong ground in the matter of exercise of discretion as calling on the party to deposit the amount which prima facie is not liable to deposit or which demand has no legs to stand upon, by itself would, result in undue hardship of the party is called upon to deposit the amount.
10. The ld. counsel for the assessee prayed to stay the demand in view of the charts reproduced hereinabove.
11. The Ld. counsel for the assessee further argued that the facts in the case of Rajeshwari Sangeet Academy Trust, are similar and therefore, the stay of demand in view of chart in the case of Rajesjwari Sangeet Academy Trust, be granted on the same facts as discussed hereinabove for the assessment years 2006-07 to 2008-09 & 2011-12 mentioned in the chart reproduced hereinabove.
15 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015
12. The Ld. DR, on the other hand, argued that the ld. counsel for the assessee for making out a prima facie case should first disapprove the ld. CIT's order, which has not been done. He further argued that software should have been available on all Schools level and not at Central Office level. As regards the order of the ITAT, Amritsar Bench, dated 08.05.2014 in assessee's own case, he argued that the department is filing Misc. Application against the said order and the present Stay Applications, therefore, be put on hold till the Misc. Application, which is yet to be filed is decided. He relied upon the decision of the Hon'ble Supreme Court, in the case of Addl. CIT vs. Surat Art Silk Mills, 121 ITR 1 and further argued that the decisions relied upon by the ld. counsel for the assessee are not applicable in view of his arguments hereinabove. He further argued that the assessee was comfortable in making installments to the Income Tax Department till passing of order of the ld. CIT(A) and thereafter, the assessee has stopped the payment of installments to the Department. Accordingly, the ld. DR argued that the assessee does not have a prima facie good case and there is no balance of convenience in favour of the assessee and making further payment will not cause any hardship to the assessee.
13. In the rejoinder, the ld. counsel for the assessee argued that the software was with respect to the management of Institute and after cross 16 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 examination of Mr. Sanjay Sonawani it revealed that the assessee had already deposited diet money. As regards the order of the ITAT, dated 08.05.2014 (supra), the ld. counsel for the assessee argued that the Revenue preferred an appeal under section 260A of the Act before the Hon'ble Punjab & Haryana High Court where as per details available, the Revenue's appeal has been dismissed and the relevant copy taken out from the inter-net was placed on record and copy given to the Department. As regards the Misc. Application against the decision of the ITAT, dated 08.05.2014, it is yet to be filed, has no sanctity because there is no Misc. Application pending as on the date of hearing and also the Revenue's appeal has been dismissed by the Hon'ble Punjab & Haryana High Court. As regards the decision of 'Surat Art Silk Mills' (supra), the ld. counsel for the assessee, Mr. Salil Kapoor argued that the said decision cannot be made applicable since the decision pertains prior to the insertion of instructions of proviso to section 164(2) of the Act.
14. We have heard the rival contentions and perused the facts of the case. The assessee, Apeejay Education Society is engaged in the activity of imparting education in various fields and is running various educational institutions. It has been granted registration u/s 12AA w.e.f. 01.04.1998 vide order dated 13.05.1999 by the CIT, Jalandhar. The said registration was 17 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 cancelled by the CIT(A) vide order dated 25.03.2013 on the ground that the purchase of software Washington Software Limited was not genuine. The assessments for the assessment years 2006-07 to 2009-10 were reopened by issuing notice u/s 148 disallowing the total claim u/s 11 and treating the whole surplus/excess of income of expenditure as business income of the assessee. Apart from depreciation debited/claimed was denied. The assessments for the A.Ys. 2010-11 and 2011-12 were completed u/s 143(3) . Similarly, all assessments reopened for the assessment years 2006-07 to 2009-10 were completed. It was stated that the assessee has filed the appeal before the ITAT, Amritsar Bench against the orders of the CIT(A), which are pending before this Bench. The assessee had filed Stay Application before the AO and had been paying instalments, as discussed with the AO, Addl. CIT and CIT till the decision of the CIT(A), as per details of the taxes, interests due and amount paid as per chart reproduced hereinabove, where the assessee has paid almost 65% of the tax and 40% of the total demand including the interest.
15. It was argued that the statement of Mr. Sanjay Sonawani, Director of Washington Software Limited was recorded during survey and the employees of the assessee were not aware as to where the software purchased from Washington Software Limited is installed. It is fact on 18 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 record that Mr. Sanjay Sonawani had made different statements at different times and the assessee has deposited the diet money for cross examination. It was also argued that the assessee had actually installed software at the Central Office at Delhi and reports for the last seven years starting from 2004 to 2011 were filed with Income Tax Authorities which were generated on different modules from the said software installed at the Central Office, Delhi. An expert opinion from M/s. Trident Information systems Limited was also taken and who visited and checked the software and it was on these facts that the registration was cancelled by the ld. CIT vide order dated 25.03.2013 and the appeal was filed before the ITAT, Amritsar Bench against the said order of the CIT. The ITAT, Amritsar vide its order dated 08.05.2014 has held that the ld. CIT is not justified in withdrawing or cancelling the registration u/s 12AA of the Act and relevant facts and findings are available in paras 22 & 23 of the said order of ITAT. This, itself establishes prima facie case of the assessee.
16. As regards assessments for the assessment years 2004-05 and 2009- 10, the same were completed u/s 148 read with section 143(3) under the same facts and circumstances and no tax was payable. As per assessment order available on record, the assessment for the AY 2005-06, as pointed out 19 SA Nos. 6 to 10(Asr)/2015 SA Nos 02 to 05(Asr)/2015 by the ld. counsel for the assessee was completed u/s 143(3) and no notice u/s 148 was issued on similar facts and circumstances.
16. The ld. CIT(A) has ignored the proviso to section 164(2) which provides that tax can be charged in respect of income to which provisions of section 13(1)(c) and 13(1)(d) are applicable.
17. The assessments are high pitched as the return filed is Nil and in view of the decisions of the Hon'ble Delhi High Court in the case Valvoline Cummings Limits vs. DCIT (supra) and in the case of Soul vs. DCIT (supra) and in view of the decisions of the Hon'ble Bombay High Court in the case of UTI Mutual Fund vs ITO (supra) and in the case of Hooghly Mills Co. Limited (supra), we are of the view that the assessee has prima facie a good case and balance of convenience lies in favour of the assessee and denying the stay to the assessee will cause financial hardship to the assessee.
18. As regards the Misc. Application against the order of the ITAT, dated 08.05.2014 to be filed by the Revenue has no consequence on the present stay applications since no miscellaneous application is pending on the date of hearing and moreover, as pointed out by the ld. counsel for the assessee that the Revenue has filed appeal u/s 260A of the Act against the order of the ITAT dated 08.05.2014 and that appeal of revenue has been dismissed. 20 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015
19. In the facts and circumstances, we direct the AO to stay the outstanding demand as mentioned in the chart reproduced hereinabove. It is ordered accordingly.
20. Since the facts for the assessment years 2007-08, 2008-09, 2010-11 & 2011-12 in the case of the assessee, Apeejay Education Society are similar as in the AY 2006-07, therefore, the AO is directed to stay the outstanding demand as per chart reproduced hereinabove in view of our findings hereinabove.
21. As regards the stay of outstanding demand in the case of Rajeshwari Sangeet Academy Trust, since the facts are similar as in the case of 'Apeejay Education Society', accordingly our order in the case of Apeejay Education Society decided hereinabove will mutatis mutandis apply to 'Rajeshwari Sangeet Academy Trust for the assessment years 2006-07 to 2008-09 & 2011-12 and the AO is directed to grant stay of outstanding demand as per chart reproduced hereinabove.
22. In view of the above, the outstanding demands in all the years mentioned hereinabove of both the assesses are stayed till the disposal of appeals or for a period not exceeding 180 days from the date of this order, whichever is earlier.
21 SA Nos. 6 to 10(Asr)/2015
SA Nos 02 to 05(Asr)/2015
23. In the result, all the nine stay applications in S.A. Nos. 6 to 10(Asr)/2015 for the assessment years 2006-07 to 2008-09, 2010-11 & 2011-12 in respect of Apeejay Education Society and S.A. Nos. 2 to 5(Asr)/2015 for the assessment years 2006-07 to 2008-09 & 2011-12 in respect of Rajeshwsari Sangeet Academy Trust, are allowed.
Order pronounced in the open court on March, 2015.
Sd/- Sd/-
(A.D.JAIN) (B.P. JAIN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: March, 2015
/SKR/ Pronounced on 26.03.2015 Sd/- JM
Copy of the order forwarded to:
1. The Assessees:i) M/s. Apeejay Education Society, Jalandhar (ii) M/s. Rajeshwari Sangeet Academy Trust, Jalandhar.
2. The ACIT-III, Jalandhar.
3. The CIT(A), Jalandhar.
4. The CIT, Jalandhar.
5. The SR DR, ITAT, Amritsar.
True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.