Wp/1960/2012 Of Vedanta Foundation v. Income-Tax Officer (O.s.d.) Tds-3 (1) And 2 Ors

wp1960-12 IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1960 OF 2012 Vedanta Foundation ..Petitioner. V/s. The Income Tax Officer (OSD) TDS-3 (1), Mumbai & Ors. ..Respondents. Mr. B.V. Jhaveri with Manjula Sosodia for the petitioner.Mr. P.C. Chhotaray for the respondents. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATED : 24TH SEPTEMBER, 2012 P.C. :- 1.Rule, returnable forthwith. By consent, the petition is taken up for final hearing. 2.This petition is filed to challenge the order dated 3[rd ]August, 2012 whereby certificate for lower deduction of tax under Section 197(1) of the Income Tax Act, 1961 ('the Act' for short) has been denied solely on the ground that in respect of the assessment year 2009-10, tax demands have been raised by denying exemption under Section 11 of the Act. 3.The perusal of the assessment order under Section 142(3) of the Act dated 22[nd] December, 2011 relating to AY 2009-10 shows that the total income of the assessee has been computed without the benefit of Section 11 of the Act on the ground that the donation received under Section 35AC of the Act has been treated as exempt income and directly taken to the balance sheet without passing through the income and expenditure account. Since the utilisation of the funds received for the specific purpose and specific use is not maintained by the assessee, the assessing officer concluded that the amounts donated has not been utilised for the purpose under Section 35AC of the Act and accordingly computed the total income without allowing the benefits of Section 11 of the Act. 4.It is the case of the petitioner that similar demands raised for the assessment year 2008-09 has been set aside by the CIT(A) by his order dated 16[th] July, 2011. It is not in dispute that the said order of CIT(A) was brought to the notice of the assessing officer. Since the applicability of the said decision to the facts of the present case has not been considered by the assessing officer, the impugned order dated 3[rd ] August, 2012 is quashed and set aside and the assessing officer is directed to pass fresh order after considering the applicability of the decision of CIT(A) dated 16[th] July, 2011. 5.Rule is made absolute in the above terms with no order as to costs. 6.The assessing officer is directed to pass fresh order as expeditiously as possible and preferably within a period of 2 weeks from today. (M.S. SANKLECHA, J.) (J.P. DEVADHAR, J.)