Darul Uloom Rahmania vs. The Commissioner of Income Tax (Exemption)

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 of Income Tax (Exemption) respondent No.1, by the following order dated 23.O8.2025 impugned herein (Annexure P- 1) "GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT crr (EXEMPTION), tryD To Darul Uloom Rahmania 23-l-133/3, Rangcli I( had ik i Tala b l(arta 500023, Telangar)a India I

Additional Commissioner oI Income Tax (Exmp), Hyderabad BALA KRISHNA BAT'TULA CIT(EXEMPTION), HYD"

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. A 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 I I

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. I I

We have considered the submissions ol I re learned counsel for the parties.

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.

In that view of the matter, we are inclirl t:d to remrt ,'the matGr to respondenL No. 1 to take a fresh <:iecision on the 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 {

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 KRISHNA Asstsrnxr REGIsTRAR /,/ @ SECTION OFFICER //// To, 1 The Commissioner of lncome Tax (Ex-emption), Aayakar Bhavan, opp. L.B, si;i;, Br.hleioasn HYderabad - 5oooo4 The 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 The lncome Tax Officer, (Exemption), Ward- 1(!) Aayakar Bhawan' Opposite iii'sffii;; aZsn;eiealrr. Hvberarad - 500004 One CC to SRI DT C P RAMASWAIUI' Advocate lOPUCl One CC to SRI VIJHAY K PUNNA, (SENIOR SC FOR ITD) [OPUC] 2 J 4 5 6 M, Two CD CoPies BSK BS