Wp(C)/8372/2019 Of Indian Institute Of Management v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.8372 OF 2019(V) PETITIONER:INDIAN INSTITUTE OF MANAGEMENTIIM CAMPUS P.O, KUNNAMANGALAM, KOZHIKODE 673570, BY LT. COL M. JULIUS GEORGE(RETD), CHIEF ADMINISTRATIVEOFFICER.BY ADVS.SRI.P.RAGHUNATHSRI.PREMJIT NAGENDRAN BY ADV.SRI.JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON11.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The challenge in the Writ Petition is against Ext.P2 order ofassessment passed in relation to the petitioner for the assessmentyear 2016-2017 under the Income Tax Act. The main contentionurged by the learned counsel for the petitioner is that while passingExt.P2 assessment order, the assessing authority did not consider theissue of exemption claimed by the petitioner in its true legalperspective. It is pointed out that while the exemption claimed underSection 10(23)C of the Income Tax Act had been rejected, on theground that, the petitioner did not produce an approval for thepurposes of the grant of exemption, such approval is notcontemplated in terms of the express provisions of Section 10(23)C(iiiab). It is stated that as per the said provision, the income of anyUniversity or other educational institution existing solely foreducational purposes and not for the purposes of profit and wholly orsubstantially financed by the Government has to be excluded whilecomputing the total income of the previous year of the assessee. Thisaspect is not seen considered in Ext.P2 assessment order. Similarly, itis pointed out that the Assessing Officer did not also consider theimpact of the first proviso to Section 12 A of the Income Tax Act, WP(C).No.8372 OF 2019(V) which clearly made the provisions of Sections 11 and 12 applicable tothe income received by an assessee who had been grantedregistration under Section 12AA, in any assessment year for whichassessment proceedings were pending before the Assessing Officer ason the date of obtaining such registration. It is stated that theregistration was obtained in the assessment year 2017-2018, andtherefore, by virtue of the proviso the benefit of the registrationought to have been extended even for the assessment year 2016-2017for which the assessment proceedings were pending at the time ofgrant of registration. 2. I have heard the learned counsel appearing for the petitionerand also the learned Standing counsel appearing for the respondents. On a consideration of the facts and circumstances of the caseand the submissions made across the bar, I find force in thecontention of learned counsel for the petitioner that Ext.P2assessment order does not reflect an application of mind whiledealing with the claim for exemption both under Section 12A of theIncome Tax Act as also under Section 10(23) C of the Act. A perusalof the reasoning of the Assessing Officer would clearly indicate that he has completely overlooked the impact of the first proviso toSection 12 A of the Income Tax Act as also the fact that the proviso toSection 10(23)C had no application to a case that was covered bySection 10(23)C (iiiab) under which category, the petitioner hadclaimed exemption. Under such circumstances, I am of the view thatExt.P2 assessment order cannot be legally sustained, and the same isaccordingly quashed. The 1[st] respondent is directed to complete theassessment pertaining to the petitioner for the said assessment yearafresh, after hearing the petitioner. To enable the 1[st] respondent todo so, I direct the petitioner to appear before the 1[st] respondent at hisoffice at 11 am on 04.11.2019. The 1[st] respondent shall pass freshorders of assessment as directed within a month thereafter. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE mns WP(C).No.8372 OF 2019(V) Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE mns WP(C).No.8372 OF 2019(V) APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 PHOTOCOPY OF THE ORDER DATED 28.07.2017 U/S. 12AA OF THE ACT ISSUED BY SECOND RESPONDENT.PHOTOCOPY OF ASSESSMENT ORDER FOR 2016.17 DATED 18.12.2017. EXHIBIT P2 EXHIBIT P3 PHOTOCOPY OF APPLICATION U/S. 154 OF THE ACT DATED 17.01.2019. EXHIBIT P4PHOTOCOPY OF ORDER DATED 04.03.2019 ON EXT P3APPLICATION. RESPONDENTS EXHIBITS:NIL //TRUE COPY//P.A TO JUDGE