The Additional Director Of Income Tax (Exemptions) Iv v. Tamil Nadu Kalvikapu Arakkattalai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 28.06.2018CORAM:THE HONOURABLE MR.JUSTICE K.K.SASIDHARANANDTHE HONOURABLE MR.JUSTICE R.SUBRAMANIAN W.A.No.18 of 2015and MP No.1 of 2015 1. The Chief Commissioner of Income Tax-III 121, Mahatma Gandhi Road, Chenni 600 034. 2. The Director of Income Tax (Exemptions) 121, Mahatma Gandhi Road, Chennai 600 034. 3. The Additional Director of Income Tax (Exemptions) IV, 121, Mahatma Gandhi Road, Chennai 600 034.... Appellants versus Tamil Nadu KalviKapu Arakkattalai,77, Bazullah Road,T.Nagar, Chennai 600 017.... Respondent Appeal filed under clause 15 of the letters patent againstthe order passed by this Court dated 06.11.2014 passed inW.P.No.4320 of 2011. Prayer in WP.No.4320/2011:Writ petition filed under Article 226of the Constitution of India seeking for the issuance of a writf certiorarified mandamus to call for the records of thePetitioner on the file of the First Respondent to quash theimpugned order dated 5.8.2010 issued in C.No.CC III/3/10(23C)/2010-11 in refusing/rejecting the renewal of recognition soughtfor in terms of section 10 (23C)(Vi) of the Income Tax Act 1961for the assessment year 2009-2010 and consequently direct theRespondent to grant such recognition as prayed for. For Appellants : Mrs.Hema MuralikrishnanFor Respondent : Mr.Sridhar J U D G M E N T (Judgment of the Court was delivered by R.SUBRAMANIAN, J.) The challenge in this intra Court Appeal is to the order ofthe learned Single Judge dated 06.11.2014 made in WP No.4320 ofhttps://hcservices.ecourts.gov.in/hcservices/ 2011, in and by which, the learned Single Judge allowed the WritPetition filed by the respondent directing the 1[st] appellant tofurnish a copy of the Report submitted by the DIT (E), dated08.07.2010 and thereafter, proceed to hear the respondent anddetermine the issue afresh in accordance with law. 2. The issue that was raised before the Department was as tothe entitlement of the respondent to the benefits of Section 10(23C) (vi) of the Income Tax Act. Though, originally theappellants granted the benefits of Section 10 (23C) (vi) of theIncome Tax Act, to the respondent Trust, subsequently, at thetime of renewal the benefits were refused on the ground that theobjects of the respondent Trust are not solely for the purposeof Education. 3. According to the Department, the benefits of Section 10(23C) (vi) of the Income Tax Act will be available, only if itis shown that the objects of the Trust are solely for thepurpose of Education and if the Trust has some other object, thesame would disentitle it from claiming the benefits of Section10 (23C) (vi) of the Income Tax Act. While considering therequest of the respondent Trust for exemption of its income fromthe Educational activities in computing the total income of theTrust, for the purposes of Section 10 (23C) (vi) of the IncomeTax Act, the first appellant viz. the Chief Commissioner ofIncome Tax had obtained the reports of the Assessing Officer,the Joint Director (Exemptions) and the Director (Exemptions)and had based his conclusions on the said report. Admittedly,the copy of those reports had not been furnished to therespondent Trust. The learned Single Judge found fault with theDepartment for not having furnished copies of the Report to theappellant inasmuch as the decision was based on those reports. 4. On the above said conclusion, the learned Single Judgeremitted the matter to the 1[st] appellant with a direction to the1[st] appellant to furnish copies of the Report of the Director(Exemptions) DIT (E) dated 08.07.2010 and deciding the matterafresh after giving an opportunity to the respondent to putforth its contentions. It is this order of the remand which ischallenged by the Department in this intra Court Appeal. 5. We have heard Mrs.Hema Muralikrishnan learned counsel forthe appellants/Department and Mr. Sridhar, learned counselappearing for the respondent. 4. On the above said conclusion, the learned Single Judgeremitted the matter to the 1[st] appellant with a direction to the1[st] appellant to furnish copies of the Report of the Director(Exemptions) DIT (E) dated 08.07.2010 and deciding the matterafresh after giving an opportunity to the respondent to putforth its contentions. It is this order of the remand which ischallenged by the Department in this intra Court Appeal. 5. We have heard Mrs.Hema Muralikrishnan learned counsel forthe appellants/Department and Mr. Sridhar, learned counselappearing for the respondent. 6. Mrs. Hema Muralikrishnan, learned Standing counselappearing for the Department would strenuously contend that theReport is only a replica of the application made by therespondent Trust, seeking benefits of Section 10 (23C) (vi) ofthe Income Tax Act. She would also further contend that whileremanding the matter, the learned Single Judge had made certainobservations which amounted to a direction to the 1[st] appellantas to the manner in which he should go about deciding theentitlement of the respondent Trust to the benefits of Section10 (23C) (vi) of the Income Tax Act. The learned counsel wouldfurther submit that while remanding the matter for freshconsideration, the learned Single Judge should not have madethose observations that would amount to a direction to decidethe matter in the particular manner. 7. Per contra Mr. Sridhar, learned counsel appearing for therespondent Trust would contend that the very scope of Section 10(23C) (vi) of the Income Tax Act, have been misunderstood by theDepartment. According to him, Section 10 relates to computationof income and certain provisions are made so as to enablecertain persons to claim exclusion of certain income from thetotal income, while computing the taxable income. Therefore,according to the learned counsel, the premise on which theDepartment had rejected the claim of the respondent Trust itselfis not correct. 8. We have heard the rival submissions. We do not propose togo into the merits of the matter as the learned Single Judge hasnot gone into the merits. The learned Single Judge had onlydirected the Department to furnish the copy of the report on08.07.2010 and decide the matter afresh after giving anopportunity to the respondent Trust. During the hearing of thepresent Appeal, the copy of the report dated 08.07.2010 had beenfurnished to the learned counsel for the respondent. 9. Therefore, the only deficiency pointed out by the learnedSingle Judge now stands cured. However, the respondent shouldbe given an opportunity to make its submissions or objectionsbased on the Report dated 08.07.2010. Therefore, we see noreason to interfere with the order of the remand passed by thelearned Single Judge. At the same time, we make it clear thatit will be open to the 1[st] appellant, viz. the Chief Commissionerof Income Tax to decide the issue afresh without beinginfluenced by any of the observations made by the learned SingleJudge in the order dated 06.11.2014 or the observations made inthe order impugned in the Writ Petition dated 05.08.2010. 10. For the foregoing reasons, the Writ Appeal fails and thesame is dismissed, subject to the observations made supra. Nocosts. Consequently, the connected miscellaneous petition isclosed.Sd/- Assistant Registrar(CS VII) //True Copy// Sub Assistant RegistrarjvTo1. The Chief Commissioner of Income Tax-III 121, Mahatma Gandhi Road, Chenni 600 034.2. The Director of Income Tax (Exemptions) 121, Mahatma Gandhi Road, Chennai 600 034.3. The Additional Director of Income Tax (Exemptions) IV, 121, Mahatma Gandhi Road, Chennai 600 034.+1cc to Mr.S.Sridhar, Advocate Sr.No.41311+1cc to Mr.Hemamuralikrishnan, Advocate Sr.No.41661VBA(CO)sm:17.7.2018W.A.No.18 of 2015and MP No.1 of 2015