Bihar Combined Entrance Competitive Examination Board V. Commissioner Of Income Tax-1 and Dy. Commissioner Of Income Tax, Circle-1

CWJC/16839/2011

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The case involves the Bihar Combined Entrance Competitive Examination Board (petitioner) challenging the order of the Commissioner of Income Tax-I, Patna, which denied them exemption under Section 10(23)(vi) of the Income Tax Act. The petitioner argued that they qualify as an educational institution existing solely for educational purposes and not for profit, seeking registration under Section 12AA of the Act. The court considered various precedents and the submissions of both parties, ultimately deciding to remand the matter for a fresh evaluation by the competent authority.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 676623 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 03-12-2020
• Assessment Year: misc
• Other Referred Cases: Bihar State Text Book Publishing Corporation Versus the Commissioner of Income Tax-I, Patna & anr., Bihar State Text Book Publishing Corporation Vs. The Commissioner of Income Tax-I, Patna, Council for the Indian School Certificate Examinations versus Director General of Income-Tax (Exemptions), Visvesvaraya Technological University versus Assistant Commissioner of Income Tax, Islamic Academy of Education vs. State of Karnataka, Assam State Text Book Production and Publication Corporation Limited versus Commissioner of Income Tax, Queen's Educational Society Versus Commissioner of Income Tax
• Laws Referred To: Section 12AA of the Act, Section 10(23)(vi) of the Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA
• Assessee Lawyers: D V PATHY
• Keywords: Educational institution; Exemption; Income Tax; Profit; Registration
• Section: 12AA; 10(23)(vi)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.16839 of 2011 ====================================================== Bihar Combined Entrance Competitive Examination Board having its office at IAS Bhawan, Near Airport, Patna, through its Controller of Examination Alok Kumar Sinha, Son Of Late R.S. Sinha, Resident Of M-10, Strand Road, P.O. And P.S. Patna Airport, Patna- 800014 ... ... Petitioner/s Versus 1. Commissioner Of Income Tax-1, Having Its Office At Central Revenue Building, Beerchand Patel Marg, Patna 2. Dy. Commissioner Of Income Tax, Circle-1 Having Its Office At 3rd Floor, Jai Prakash Narain Bhawan, Dak Bungalow Road, Patna ... ... Respondent/s ====================================================== Appearance : For the Petitioner/s : Mr.D.V.Pathy, Advocate For the Respondent/s : Mrs. Archana Sinha @ Shahi, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 03-12-2020 Petitioner has prayed for the following relief(s): i) the order dated 26.7.2011 passed by the respondent no.1 (as contained in Annexure- 4) under Section 12AA of the Act be quashed. (ii) the respondent no.1 be directed to grant registration under Section 12AA of the Act. Patna High Court CWJC No.16839 of 2011 dt.03-12-2020 2/6 (iii) for granting any other relief(s) to which the petitioner is otherwise found entitled to. 2. We have heard the learned counsel for the parties at length. 3. The primary issue which arises for consideration is as to whether the present petitioner, namely Bihar Combined Entrance Competitive Examination Board would be entitled for exemption under the provisions of Section 10(23)(vi) which partly reads as under:- Section 10(23-C) (vi) 10. Incomes not included in total income.- In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- … (23-C) any income received by any person on behalf of- … (vi) any university or other educational institution existing solely for educational purposes and not for purposes of profit, other than those mentioned in sub-clause (iiiab) or sub-clause (iiiad) and which may be approved by the prescribed authority; or 4. We notice that vide impugned order dated 26th of July, 2011, the competent authority has rejected the petitioner’s claim for grant of such exemption. Patna High Court CWJC No.16839 of 2011 dt.03-12-2020 3/6 5. In support of his submission, Shri Pathy, learned counsel for the petitioner invites our attention to the decision rendered by this Court in C.W.J.C. No. 20296 of 2010, titled as Bihar State Text Book Publishing Corporation Versus the Commissioner of Income Tax-I, Patna & anr. on 04.09.2020 as also earlier decision rendered by this Court in M.A. No.425 of 2010 titled as Bihar State Text Book Publishing Corporation Vs. The Commissioner of Income Tax-I, Patna, referred to therein. Also reliance is placed upon the decision rendered by the Delhi High Court in Council for the Indian School Certificate Examinations versus Director General of Income-Tax (Exemptions), [2014] 362 ITR 436 (Del). 6. On the other hand, Mrs. Archana Sinha @ Shahi seeks reliance upon the decision rendered by Hon’ble the Apex Court in Visvesvaraya Technological University versus Assistant Commissioner of Income Tax, 2016 (12) SCC 258, 7. However, in response thereto, Shri D.V.Pathy, learned counsel for the petitioners refers to and relies upon the other decisions rendered by Hon’ble the Apex Court in Islamic Academy of Education vs. State of Karnataka, (2003) 6 697; Assam State Text Book Production and Publication Corporation Limited versus Commissioner of Income Tax, Patna High Court CWJC No.16839 of 2011 dt.03-12-2020 4/6 (2009) 17 SCC 391 ; and in Queen’s Educational Society Versus Commissioner of Income Tax (2015) 8 SCC 47; . 8. Having perused the impugned order, we are of the considered view that the authority below, while concluding that the petitioner was not an educational institution, did not have complete material, including as to whether it was generating any profit by taking fees for conducting the examination. 9. After the matter was heard for some time, learned counsel for the parties were ad-idem that the matter can be remanded back to the authority for consideration afresh, by affording opportunity to the parties to place all material, enabling the authority to arrive at a decision in accordance with law. 10. We have no hesitation in acceding to such request. As such, dispose of the petition in the following terms: (a) The impugned order dated 26.7.2011 passed by Commissioner of Income Tax-I, Patna in the matter of Bihar Combined Entrance Competitive Examination Board, is quashed and set aside; (b) The matter is remanded back to the appropriate/competent authority for consideration of the petitioner’s application afresh; Patna High Court CWJC No.16839 of 2011 dt.03-12-2020 5/6 Here only Mrs. Archana Sinha clarifies that now the nominated authority is the Principal Commissioner of Income Tax (Exemption) Patna. (c) The parties are directed to appear before the said authority on 17.12.2020 when a date shall be fixed, enabling the parties to place on record additional material. (d) Adequate opportunity of hearing shall be afforded with full compliance of principles of natural justice and the authority shall decide the matter afresh by passing a speaking order, copies whereof shall be supplied to the parties. (e) Proceedings can be got conducted through a digital mode, if so found necessary. (f) Liberty reserved to the parties to take recourse to such remedies, if so required and desired, as per law. (g) We only hope and expect the authority to decide the matter expeditiously and preferably within the current financial year and positively before 31st March, 2021. (h) All issues are left open. Patna High Court CWJC No.16839 of 2011 dt.03-12-2020 6/6 11. The writ petition stands disposed of in the above terms. 12. Interlocutory Application, if any, shall stand disposed of. K.C.Jha/- (Sanjay Karol, CJ) ( S. Kumar, J) AFR/NAFR CAV DATE Uploading Date 07.12.2020 Transmission Date "