Bihar State Minorities Financial Corporation Limited Haz Bhawan, Ali Imampath v. Principal Commissioner Of Income Tax - 1 Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.17003 of 2023 ====================================================== Bihar State Minorities Financial Corporation Limited Haz Bhawan, Ali ImamPath 34, Harding Road, Mithapur, S.O (Patna), Phulwari, Patna 800001(Bihar), through its Deputy Director - Rashmi, Female, aged about 40 years. ... ... Petitioner/s Versus 1.Principal Commissioner of Income Tax - 1 Patna 2.Joint Commissioner of Income Tax, Range - 1, Patna 3.Income Tax Officer, Ward-2(1), Patna. ... ... Respondent/s ======================================================Appearance :For the Petitioner/s: Mr.Aman Raja, Advocate Mr. Sanjeev Kumar, Advocate For the Respondent/s: Mrs.Archana Sinha @ Archana Shahi, Advocate Mr. Alok Kumar Shahi, Advocate Mr. Swarna Roy, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE HARISH KUMARORAL JUDGMENT(Per: HONOURABLE THE CHIEF JUSTICE) Date : 16-04-2024 The petitioner a Corporation incorporated by the Statefor upliftment of the minorities is aggrieved with the assessmentmade against it despite complete exemption being availableunder Sections 26BB of the Income Tax Act. 2. Learned Counsel for the petitioner submits that the petitioner had been granted such exemption in the year 2016-17,2018-19 and 2021-22 under 10(26BB) of the Income Tax Act.Only for the year 2015-16, the assessment was made in excessof almost Rs 48 Crores when the income earned by the petitioner is totally exempted from tax. It is admitted that therewas some defect on the part of the petitioner due to theorganizational restructuring which resulted in an ex parte orderbeing passed. The petitioner took the matter in Appeal but whenno notice was issued and there were coercive steps taken torecover the amounts; the petitioner approached the income taxauthorities with a rectification application under Section 154 ofthe Income Tax Act. The said rectification application was alsorejected against which the present writ petition has been filed. 3. Learned Senior Counsel for the departmentspecifically took us to the assessment order and pointed out thatthe petitioner had failed to respond to the various notices issuedand even the question of exemption was never raised before theAssessing Officer. It is also pointed out that the petitioner hadfiled an appeal on 07.04.2022, without paying the 20% dues andafter one and a half years filed the rectification application on18.09.2023. The rectification application was rightly rejected asis the case in Commissioner of Income Tax (CNTL Ludhiana)Vs. Here Cycles Private Ltd.,; (1997) 8 SCC 502. 4. We have anxiously considered the contentions raised.Annexure-P/2 is the assessment order passed on 21.03.2022. Ashas been pointed out by the learned Counsel for the petitioner, in the subsequent assessment years 2016-17, 2018-19 and 2021-22, the petitioner was granted exemption under Section10(26BB) of the Income Tax Act. One of the orders, relating toassessment year 2016-17 is produced before us, which is dated26.11.2019. 5. The counter affidavit does not oppose the contentionof the petitioner that it is a Corporation incorporated for theupliftment of the minorities and that it comes squarely under theambit of Section 10(26BB) of the Income Tax Act. The variousparagraphs in the counter affidavit are those extracted from theassessment order. It is also stated that when the Appeal was filedthere was no deposit of 20% which was demanded and obtainedfrom the Bank, in which the petitioner maintains an account. the subsequent assessment years 2016-17, 2018-19 and 2021-22, the petitioner was granted exemption under Section10(26BB) of the Income Tax Act. One of the orders, relating toassessment year 2016-17 is produced before us, which is dated26.11.2019. 5. The counter affidavit does not oppose the contentionof the petitioner that it is a Corporation incorporated for theupliftment of the minorities and that it comes squarely under theambit of Section 10(26BB) of the Income Tax Act. The variousparagraphs in the counter affidavit are those extracted from theassessment order. It is also stated that when the Appeal was filedthere was no deposit of 20% which was demanded and obtainedfrom the Bank, in which the petitioner maintains an account. 6. As we observed, there was nothing stated as to thepetitioner’s exemption not been permissible. Admittedly, thepetitioner had been granted such exemption under Section10(26BB) for other years also. The issued raised by thepetitioner is one going to the very jurisdiction of the assessingofficer to make an assessment ignoring the exemption. That theassessing officer has the jurisdiction to make an assessmentcannot at all be doubted, but, however, while proceeding withthe enquiry for assessment, the assessing officer went beyond the jurisdiction conferred on him by assessing an entity which isentitled to complete exemption. 7. We are of the opinion that the order has to be setaside and we do so. The amounts recovered on the basis of theAppeal filed will also be refunded with statutory interest. 8. The writ petition stands allowed. (K. Vinod Chandran, CJ) ranjan/-AFR/NAFRNAFRCAV DATENAUploading Date19.04.2024Transmission DateNA ( Harish Kumar, J)