Income Tax Appellate Tribunal - Mumbai
Chembur Mahatma Education Society, vs Assessee on 1 April, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" Bench, Mumbai
Before Shri Mahvir Singh, Judicial Member
and Shri Jason P. Boaz, Accountant Member
SA No. 147/Mum/2016
(Arising out of ITA No. 1726/Mum/2016)
(Assessment Year: 2011-12)
Chembur Mahatma Income Tax Officer (E)-1(1)
Educatoin Soceity 5th Floor, Piramal Chambers
Vs.
Chembur Naka, Chembur Lalbaug, Mumbai 400012
Mumbai 400071
PAN - AAATC8534H
Appellant Respondent
Applicant by: Shri Ramesh Iyer
Respondent by: Shri Ashish Heliwal
Date of Hearing: 01.04.2016
Date of Pronouncement: 01.04.2016
ORDER
Per Jason P. Boaz, A.M.
By this stay application the assessee seeks stay of collection of outstanding demand of `2,04,09,062/- pending disposal of the appeal and also requested for posting of the appeal on out of turn basis.
2. The facts of the case, briefly are as under: -
2.1 The assessee, a public charitable trust formed by Mahatma Education Society (MES), is engaged wholly in education. The Trust is more than 40 years old and it was started with 40 students and today it has a student strength exceeding 20,000/- The Trust was running institutions in Chembur, Panvel, New Panvel, Gorai and Raigad. During the year 2006 MES formed five new trusts, viz., Chembur Mahatma Education Society, New Panvel Mahatma Education Society, Mahatma Education Society Panvel, Raigad Mahatma Education Society and Gorai Mahatma Education Society.
In the year 2008-09 the administrative and finance activities of the MES 2 SA No. 147/Mum/2016 Chembur Mahatma Educatoin Soceity were transferred for a period of 35 months to the above mentioned five trusts based on the geographical location of the respective institutions. Thus the activities of the Chembur and Powai Madhyamik were transferred to the assessee. During the course of the transfer, all the movable assets of the Chembur and Powai Madhyamiak were transferred to the assessee and the immovable assets and other properties which are common to all the trusts were retained by the MES. All the receipts like fees, government grants, etc. relating to the assessee and all the expenses attributable to the activities of the assessee were accounted for in the books of the assessee and the same was subjected to statutory audit under the Bombay Public Trust Act, 1950 and also audit under section 12A(b) of the Income Tax Act, 1961.
2.2 During the course of assessment the AO rejected the books of accounts of the assessee for various reasons. The AO estimated the income of the assessee by taking all the receipts (except government grants) as income of the assessee without allowing any expenses incurred by the Assessing Officer. The AO also took the Corpus fund of `1,40,90,012/-, which was carried forward from the earlier year, also as income of this year. Thus the AO estimated the total income of the assessee at `5,97,60,070/- and accordingly taxed. Aggrieved by the order of assessment the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal and confirmed the order of the AO.
2.3 Eventhough the assessee applied for stay of collection of demand, vide letter dated 25.04.2014, the AO did not respond to the letter of the assessee. But at the time recovery of demand the AO, vide letter dated 15.09.2014, enquired whether any stay of demand is pending to which the assessee, vide letter dated 20.09.2014 submitted that the assessee has filed an appeal and the demand may be kept in abeyance till the disposal of the appeal. The AO, without referring to the above letter dated 25.04.2014, passed an order dated 24.09.2014 instructing the assessee to pay 50% of the demand within 15 days. Then the assessee filed a petition before the Director of Income Tax (Exemption) on 10.10.2014 and the DIT (E), vide his order dated 27.03.2015, directed the petitioner to pay `5 lakhs for the first three 3 SA No. 147/Mum/2016 Chembur Mahatma Educatoin Soceity months and `10 lakhs for the next three months. This order was to be reviewed in July, 2015 but the assessee did not receive any such notice of review.
3. At the time of hearing the learned counsel for the assessee submitted that the assessee is a Trust registered under section 12 of the Act for the purpose of imparting secular education and hence is entitled to exemption under section 11 of the Act. The AO, for some extraneous reason, has rejected exemption under section 11 and added the entire receipt (except government grants) as income the assessee without taking into account the expenditure incurred by the assessee. The AO has also taken the Corpus donation which was carried forward from the earlier year also as income of the current year and added to the taxable income. Hence, the learned counsel for the assessee submitted that the assessee has a good prima facie case and pleaded for stay of collection of the outstanding demand till the disposal of the appeal.
4. On the other hand the learned D.R. contended that the assessee has paid only an amount of `45 lakhs against the total demand of `2.49 crores. The learned counsel for the assessee was also not able to establish any financial stringency in respect of the assessee. Therefore he contended that the assessee has not made out a prima facie case for stay of collection of outstanding demand. Thus the learned D.R. for Revenue opposed granting of stay and prayed for a direction from the Bench that the assessee may pay the outstanding demand.
5. We have heard the rival contentions and perused and carefully considered the material on record. From the facts on record we find that the assessee has paid only an amount of `45 lakhs against the total demand of `2.49 crores and the assessee has no financial crisis. Therefore, we are of the considered opinion that this is not a fit case of grant of stay of outstanding demand. In view of this the stay application of the assessee is dismissed. However, hearing in this case has been fixed for 05.05.2016 and both the parties has been informed of this in the open court. Therefore, there is no need for the Registry to issue notice to the parties.
4 SA No. 147/Mum/2016Chembur Mahatma Educatoin Soceity
6. In the result, the stay application of the assessee is dismissed.
Order pronounced in the open court on 1st April, 2016.
Sd/- Sd/-
(Mahavir Singh) (Jason P. Boaz)
Judicial Member Accountant Member
Mumbai, Dated: 1st April, 2016
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A) - 1, Mumbai
4. CIT (Exemptions), Mumbai
5. The DR, "C" Bench, ITAT, Mumbai
By Order
//True Copy//
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
n.p.