Wp/7806/2008 Of S.p. Sampathys Siva Sivani Educational Society v. The Director Of Income Tax (Exemptions)

IN THE HIGH COURT OF JUDICATURE, ANDHRAPRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTIETH DAY OF AUGUSTTWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENAKUMARIAND THE HON'BLE MR JUSTICE P.V.SANJAYKUMAR WRIT PETITION NO : 7806 of 2008 Between: S.P. Sampathy's Siva Sivani Educational Society,Kompally, Via Hakimpet, Secunerabad-500014,Rep by its Chairperson smt. Arathy Sampathy. .....PETITIONER AND 1 The Director of Income Tax (exemptions) Olympic Bhavan, basheerbagh, Hyderabad. 2 The Chief Commissioner of Income Tax, Hyderabad-1, Block "A" 9th Floor, IT Towers, A.C. Guards, Hyderabad. Hyderabad-1, Block "A" 9th Floor, IT Towers, A.C. Guards, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitutionof India praying that in the circumstances stated inthe Affidavit filed herein the High Court will bepleased to issue a Writ, direction or order especiallyone in the nature of Writ of Mandamus declaringthat the order of the 2nd Respondent dt 31-12-2007declining to grant exemption to the petitionersociety for the assessment years 1999-2000 to2006-2007 under the provisions of section 10(23C)(Vi) of the Income Tax Act, 1961 without evenproviding an opportunity of being heard to thepetitioner, as being illegal, arbitrary and against theprinciples of natural justice and set a side the same, and consequently direct the 2nd respondent toconsider the applications filed by the petitioner forexemption of its income for the assessment years1999-2000 to 2006-2007 afresh adhering to theprinciples of natural justice and pass such otherorder(s) as the Hon'ble Court deems fit and properin the interest of justice.Counsel for the Petitioner: MRA.V.RAGHURAMCounsel for the Respondent No.:MR.S.R.ASHOK & V.R.BADRI (SC FOR INCOME TAX)The Court made the following : ORAL ORDER:(per THE HON’BLE MRS. JUSTICE T.MEENAKUMARI) Seeking a writ of mandamus declaring theorder dated 31.12.2007 passed by the secondrespondent whereby exemption sought for by thepetitioner Society for the Assessment years 1999-2000 to 2006-2007 under the provisions of Sec.10(23C)(vi) of the Income Tax Act, 1961 wasdeclined, without providing an opportunity of beingheard, as illegal and arbitrary and consequently toset aside the same directing the second respondentto consider the applications filed by the petitionerfor exemption, the present writ petition is filed. The petitioner is a society registered under theprovisions of A.P. (Telangana Area) Public SocietiesRegistration Act, 1350 Fasli, in the year 1997 andthe educational institutions established by thesociety impart education to the students from pre- primary to post-graduate studies. The case of thepetitioner is that its income is exempted under theprovisions of Sec. 10(23C)(vi) of the Income TaxAct, if the prescribed authority approves it. Interms of the above provision, the petitioner madeapplications to the first respondent, which is theprescribed authority for granting the exemption, forthe assessment years 1999-2000 to 2006-2007 ondifferent dates and the first application made on30.06.1999 is pending consideration before the firstrespondent for more than eight years. While so, on10.12.2007, the second respondent issued showcause notice to the petitioner, to which it madepreliminary submission dated 28.12.2007 andspecifically prayed for an opportunity to representthe case before the second respondent. The secondrespondent having adjourned the personal hearingfrom 19.12.2007 and having received thepreliminary explanation dated 28.12.2007, withoutaffording an opportunity of hearing, passed an orderdated 31.12.2007 dismissing the applications filedby the petitioner seeking exemptions, which isimpugned in this writ petition. It is contended on behalf of the petitioner thatthe impugned order is liable to be set aside for thereason that the second respondent did not afford anopportunity of hearing even though a specific It is contended on behalf of the petitioner thatthe impugned order is liable to be set aside for thereason that the second respondent did not afford anopportunity of hearing even though a specific request was made in that regard. The learned Senior Standing Counsel forIncome Tax Department, argued that since thepetitioner sought time during the month of January,2008, to represent the case and since theapplications seeking exemption included anapplication dated 8.12.2006 for the assessment year2006-2007, which had to be disposed of before31.12.2007 in view of the time limit imposed by theproviso to Sec. 10(23C) of the Income Tax Act, theimpugned order was passed after considering thepreliminary objections raised by the petitioner in itsletter dated 28.12.2007. Counter affidavit filed bythe second respondent, is also to the same effect. Having regard to these facts, withoutadverting to merits or otherwise of the contentionsraised by the petitioner, we are of the opinion thatthe matter requires reconsideration by the secondrespondent, after affording an opportunity ofhearing to the petitioner. Accordingly, the writ petition is allowed andthe impugned order dated 31.12.2007 is set asideand the matter is remanded back to the secondrespondent with a direction to resolve the issueafter affording an opportunity of hearing to thepetitioner by passing an order afresh, within a period of two months from the date of receipt of acopy of this order. It is needless to add that thepetitioner shall cooperate with the secondrespondent in early disposal of the matter and incase of default the impugned order becomesoperative. With this direction, the writ petition isallowed. No order as to costs. ____________________ Justice T.Meena Kumari August 20, 2008MAS ______________________ Justice P.V. Sanjay Kumar ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to2.2CD copiesForm-NIC-OGS/WP{TRT}