Op/13151/2001 Of M/S.kerala Cashew Workers Relief & Wel v. Asst.commr.of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR MONDAY, THE 20TH DAY OF OCTOBER 2014/28TH ASWINA, 1936 OP.NO. 13151 OF 2001 (N) ------------------------- PETITIONER(S): --------------- M/S.KERALA CASHEW WORKERS RELIEF & WELFARE FUND BOARD REPRESENTED BY ITS CHIEF EXECUTIVE MR.WILSON,MUNDAKKAL WEST BY ADVS.SRI.P.BALACHANDRAN (SR.) SRI.M.K.CHANDRAMOHAN DAS, SC, KCWR&WFB RESPONDENT(S): --------------- 1. THE ASST.COMMISSIONER OF (INCOME TAX )CIR-I, QUILON 2. THE ASST.COMMISSIONER OF INCOME TAX, KERALA, TRIVANDRUM 3. THE ASST.DIRECTOR OF INCOME TAX(EXEMPTION) HEAD QUARTERS.I/II,CALCUTTA-700071 HEAD QUARTERS.I/II,CALCUTTA-700071 4. THE SECRETARY TO THE GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI-110001 R1,2,4 BY SRI.P.K.R.MENON,SR.COUNSEL, GOVT.OF INDIA(TAXES) R1,2,4 BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 20-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP.NO. 13151 OF 2001 (N) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: A TRUE COPY OF THE KERALA CASHEW WORKERS RELIEF AND WELFAREFUND ACT & SCHEME EXT.P2: A TRUE COPY OF THE PROCEEDINGS BY THE SECOND RESPONDENT EXT.P3: A TRUE COPY OF THE APPLICATION EXT.P4: A TRUE COPY OF THE COVERING LETTER EXT.P5: A TRUE COPY OF THE COMMUNICATION ISSUED BY THE ASST.DIRECTOROF INCOME TAX(EXEMPTION) TRIVANDRUM DATED 14.07.1997 EXT.P6: A TRUE COPY OF THE REPLY SENT BY PETITIONER DATED 29.07.1997EXT.P7: A TRUE COPY OF THE COMMUNICATION BY THIRD RESPONDENT DATED28.10.1997 EXT.P8:A TRUE COPY OF THE ASSESSMENT ORDER FOR 94-95 DATED 03-03-1997 EXT.P9:A TRUE COPY OF THE ASSESSMENT ORDER FOR 95-96 DATED 16-01-1998 EXT.P10:A TRUE COPY OF THE ASSESSMENT ORDER OF THE COMMISSIONER OFINCOME TAX(APPEALS), TRIVANDRUM DATED 07-01-2000 EXT.P11: A TRUE COPY OF THE AUDITED BALANCE SHEET AND PROFIT AND LOSSACCOUNT DATED 14.06.1996 EXT.P12(A): A TRUE COPY OF THE REMINDER DATED 25.03.1998 EXT.P12(B): A TRUE COPY OF THE REMINDER DATED 11.01.1999 EXT.P12(C): A TRUE COPY OF THE REMINDER DATED 22.07.1999 EXT.P13: A TRUE COPY OF THE COMMUNICATION BY THE FOURTH RESPONDENTDATED 11.05.2000 EXT.P14: A TRUE COPY OF THE APPLICATION SENT BY THE PETITIONER DATED12.06.2000 EXT.P15: A TRUE COPY OF THE COMMUNICATION BY THE GOVERNMENT OF KERALADATED 07.03.2003 RESPONDENTS' EXHIBITS:NIL //TRUE COPY// P A TO JUDGE A.K.JAYASANKARAN NAMBIAR, J. ---------------------------------------------------------- O.P.NO.13151 OF 2001 ---------------------------------------------------------- Dated this the 20[th] day of October, 2014 J U D G M E N T The petitioner had filed an application before the 2[nd]respondent for registration under Section 12 of the Income Tax Act.By Ext.P2 order dated 05.03.1997 the registration sought for by thepetitioner was granted with effect from 15.11.1988. The petitionerthereafter filed an application in Form No.56 for exemption underSection 10(23C) (iv) of the Income Tax Act, for the assessmentyears 1989-1990 to 1995-1996. It would appear that by Ext.P7communication, the 3[rd] respondent forwarded the application to the4[th] respondent, recommending the case of the petitioner for theissuance of a notification granting exemption. In the meanwhileExt.P8 and P9 assessment orders were passed for the assessmentyears 1994-1995 and 1995-1996, where the exemption prayed forby the petitioner was not granted. In an appeal preferred againstthe said assessment orders, the appellate authority in Ext.P10common order found the petitioner entitled to be treated as apublic charitable organisation under Section 11 of the Income TaxAct. It is pointed out that against Ext.P10 appellate order, thedepartment has filed an appeal before the Income Tax appellateTribunal which is pending before that forum. In the originalpetition the petitioner is essentially aggrieved by Ext.P13 order dated 11.05.2000, that was passed by the 4[th] respondent holdingthat the petitioner does not fulfil the conditions for issuance of anotification under section 10(23C) (iv) of the Income Tax Act.Insofar as Ext.P13 order does not cite any reasons for the rejectionof the petitioners claim, the petitioner preferred Ext.P14representation before the 4[th] respondent seeking a reconsiderationof the matter. No decision was taken on the said representationand hence the petitioners approached this Court inter alia for adirection to quash Ext.P13 order and for a direction to the 4[th]respondent to consider Ext.P14 representation. 2. I have heard Sri.P.K.Ravindranath Menon, the learnedSenior Standing Counsel for the Income Tax department. 3. On a consideration of the facts and circumstances of thecase as also the submissions made across the bar, I am of the viewthat when the claim of the petitioner in terms of Section (23C) (iv)of the Income Tax Act was submitted before the 3[rd] respondentwho in turn forwarded the application to the 4[th] respondent with arecommendation for the grant of exemption, it was incumbent uponthe 4[th] respondent to state the reasons that weighed with him whiletaking the decision, in Ext.P13 order, not to grant exemption to thepetitioner. A perusal of Ext P13 order passed by the 4[th] respondent does not disclose any reason for his decision. A quasi-judicialauthority, who is entrusted with the task of adjudicating upon therights of a person, cannot pass orders that are ambiguous andvague by not stating the reasons that informed his decision. In thatview of the matter, for the sole reason that it is a non-speakingorder that violates the rights of the petitioner, I quash Ext.P13order of the 4[th] respondent. The 4[th] respondent is directed toreconsider the matter, taking into account the recommendations ofthe 3[rd] respondent, as contained in Ext.P7 communication, as alsoExt.P14 representation by the petitioner, and pass fresh orders onthe claim of the petitioner for exemption in terms of Section 10(23C)(iv) of the Income Tax Act. The 4[th] respondent shall passfresh orders as directed within a period of two months from thedate of receipt of a copy of this judgment. A.K.JAYASANKARAN NAMBIAR JUDGE mns