Sanatan Dharam Shiksha Samiti v. Chief Commissioner Of Income Tax, Panchkula

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP? No.6714 of 201Date of decision:25.03.2015 Sanatan Dharam Shiksha Samiti. — Petitioner Versus Chief Commissioner of Income Tax, Panchkula ...... Responden CWP? No.6833 of 2014 Sanatan Dharam Shiksha Samiti — Petitioner Versus Chief Commissioner of Income Tax, Panchkula ......Respondent CORAM:HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICEHON'BLE MR.JUSTICE G.S.SANDHAWALIA Present:Mr.Sandeep Goyal, Advocate, for the petitioner. Ms.Urvashi Dhugga, Advocate, for the respondent. ++++ S.J.Vazifdar, Acting Chief Justice(Oral): 1,Rule. Rule returnable and heard finally. 2 The petitioner has challenged the order dated 11.11.2013 (AnnexureP21), passed by the Chief Commissioner of Income Tax, Panchkula (for short, the'CCIT"), rejecting its application for exemption/approval, filed under Section10(23C)(v1) of the Income Tax Act, 1961 (for short, the ‘Act') for the assessmentyears 2005-06 to 2008-09, onThe petitioner has sought the said exemption by filing applicationdated 31.03.2008 (Annexure P4), which was rejected vide the impugned order.SAILESH RANJAN2015.04.06 09:56doe original order was challenged in CWP No.858 of 2009 titled KashatriyaI attest to the accuracy andintegrity of this document Sabha Maharana Partap Bhawan, Kurukshetra Vs. Union of India & another,decided on 29.01.2010 and the Division Bench of this Courtinter qliqheld thatearning profits is not a deciding factor to conclude that an educational institutionexists for profit. The Division Bench further held that where more than 15% ofthe income of the educational institution is accumulated on or after 01.04.2002,the period of accumulation of amount exceeding 15% is not permissible beyond 5years, provided the excess income has been applied or accumulated forexemption, wholly or exclusively, for the purpose of education. It was furtherheld that on an application, the authority could grant approval, subject to suchterms and conditions as it may deem fit, provided that they are not in conflict ofthe Act and that the parameters of earning profits beyond 15% and its investmentis wholly for the purpose, as may be expressly stipulated, as per the statutoryrequirement. 4Considering the order that we intend passing, it is not necessary torefer to the judgment in any detail. Suffice it to note that the Division Benchultimately allowed the writ petitions, set aside the impugned orders and directedthe CCIT to decide the same, afresh, after considering every case independently,but in the light of the judgment. 5 The petitioner's case, however, was decided on remand. On the otherhand, in the meantime, the assessment orders were completed on the basis that noexemption had been obtained under Section 10(23C)(vi) of the Act. Thepetitioner has challenged these orders. The CCIT has held against the petitioner.The appeals against the order of the CCIT are pending in this Court. We areinformed that in those appeals, a Division Bench of this Court has passed aninterim order, directing the CCIT to decide the applications, in accordance withthe judgment passed by the Division Bench in CWP No.858 of 2009 on 6 Thereafter, the impugned order was passed by the CCIT. Aftersetting out the facts, the CCIT furnished the reasons for rejecting the application.All the paragraphs except paragraph No.7 are almost identical to the order dated23.03.2009 (Annexure P14), which had been set aside by the Division Bench videjudgment dated 29.01.2010. It does not appear to be a fresh consideration of thematter in its entirety. The impugned order concludes with paragraph No.7. It isimportant to note that in paragraph No.7, it has been specifically stated that in aShort span of time, no discrete enquiry could be made. It is also pertinent to notethat for the subsequent years, the exemption has been granted. The impugnedorder, therefore, has in fact, not complied with the order dated 29.01.2010, in itscorrect perspective. It was for the CCIT to go into the matter afresh and thenpass an order. vaOne of the contentions raised by Ms.Dhugga, learned counselappearing for the respondent, is that the issue of limitation, as regards theapplications for assessment years 2005-06 to 2007-08 were correctly decidedvide the original order dated 23.03.2009 and therefore, that issue standsconcluded. 8 The submission is not well founded. Whether the issue was correctlydecided or not, is not relevant at this stage. The fact is that the order dated23.03.2009 was set aside by the Division Bench vide order dated 29.01.2010, inits entirety. It is necessary, therefore, for the CCIT to decide the matter afreshincluding on the question of limitation. QOIn the circumstances, the impugned order dated 11.11.2013(Annexure P21) is set aside. We are informed that the matter is, now, to bedecided by the Commissioner of Income Tax (Exemption), Chandigarh.Accordingly, the Commissioner of Income Tax (Exemption), Chandigarh shallSAILESH RANJAN2015.04.06 09:56aeside the matter, afresh, in accordance with the judgment dated 29.01.2010. WeI attest to the accuracy andintegrity of this document reiterate that all the issues including the issue of limitation shall be decided afterkeeping in mind the principles laid down by the Apex Court inCA No.5167 of2008titledM/s Queen's Educational Society Vs. Commissioner of Income Tax,decided on 16.03.2015. The writ petitions are, accordingly, disposed of. (S.J.Vazifdar)Acting Chief Justice 25.03.2015(G.S.Sandhawalia)5)+:352Judge