Indian National Congress All India Congress Committee vs. Deputy Commissioner of Income Tax (ITAT Delhi)

Court: ITAT Delhi
Head Notes:

(i) Under the first Proviso below Section 254(2A) of the Act, it is only in cases where the merits of the application have been made out, that the Tribunal would be justified in exercising its power of grant of stay on the recovery proceedings.

(ii) Prima facie, the income tax authorities have not made any error in denying the exemption claimed by the assessee under Section 13A of the Act due to violation of clause (d) of the first Proviso as well as third Proviso to Section 13A of the Act.

(iii) As regards the violation of the third Proviso to Section 13A, ostensibly, the return of income has been filed on 2nd February, 2019, which is beyond the due date. Consequently, there is an apparent non-compliance with the requirements of the third Proviso to Section 13A of the Act.

(iv) As regards the violation of clause (d) of the first Proviso to Section 13A, the detail of Rs.14,49,000 clearly show that each contribution is in cash in excess of Rs.2,000, thereby reflecting clear violation of clause (d) of the first Proviso. The argument that there is a difference between Voluntary Contributions and Donations does not inspire any confidence. No doubt the details of Rs.14,49,000/- maintained by the assessee is compliant with the requirements of clause (b) of the Proviso, so however, it does not distract from the fact that clause (d) of the first Proviso has been contravened inasmuch as Donations in excess of Rs.2,000/- have been received by the assessee in cash. The argument that Donations received in cash in excess of Rs.2,000 each was merely 0.1% of the total contribution received and, therefore, the same should not invite wholesale denial of exemption under Section 13A of the Act is not acceptable.

(v) The plea that the action of the Assessing Officer was lacking in bona fides as it had been initiated close to the ensuing Parliamentary Elections is also not acceptable. The assessee has not demonstrated its keenness to expeditiously settle the issue inasmuch as the Appeal of the assessee pending with the Tribunal had come up for hearing on three occasions and, on each of the occasion, the record of proceedings reveal that the assessee was not prepared and sought adjournment. Even in the course of hearing of the present petition, it was put across to the parties that since extensive arguments were being advanced, the Appeal pending before the Tribunal may be taken up for hearing on merits to facilitate an expeditious disposal of the same. While the learned Standing Counsel had no objection to the same, the learned Senior Counsel appearing for the Applicant did not opt for the same. Be that as it may, the aforesaid is pointed out only to emphasize that the power to grant the stay is exercised inter alia, in cases where a delay can be expected in the determination of the pending Appeal in the due course. So however, in the instant case, the delay in determination of Appeal, if any, is not attributable to the Revenue.

Section(s): Section 254(2A), third Proviso to Section 13A, clause (d) of the first Proviso to Section 13A
Counsel(s): Shri Vivek Krishna Tankha, Senior Advocate, Shri Vipul Tiwari, Advocate and Shri Inder Dev Singh, Advocate (through Physical mode). Respondent by : Shri Zoheb Hossain, Senior Standing Counsel (through Virtual mode), Shri Vipul Agarwal, Senior Standing Counsel, Shri Sanjeev Menon, Junior Standing Counsel, Shri Vivek Gurnani, Advocate, Shri Rajat Sen, Assessing Officer and Shri Waseem Ahmed, CIT-DR (through Physical mode)
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Uploaded By Advocate Swati Khandelwal
Date of upload: March 9, 2024

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