DPS Society V. UOI

W.P.(C)/9847/2009

AI Insights

The case involves the Delhi Public Society (petitioner) challenging the withdrawal of exemption under Section 10(23C)(vi) of the Income Tax Act, 1961, for various assessment years. The exemption was initially granted but later withdrawn by respondent no.5, leading to the filing of writ petitions by the society. The High Court had previously ruled in favor of the society in a similar matter, which was upheld by the Supreme Court. The core issue was whether the charging of franchise fees by the society constituted business income, which was deemed incidental and not a primary business activity.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836754 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 12-02-2026
• Assessment Year: misc
• Other Referred Cases: DIT (Exemption) v. Delhi Public Society
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: GAURAV GUPTA; SHIVENDRA SINGH
• Assessee Lawyers: SATYEN SETHI; ARTA TRANA PANDA
• Keywords: Business income; Exemption; Franchise fees; Incidental Activity
• Section: 10(23C)(vi)

Judgement Text

"$~2 & 3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 9847/2009 + W.P.(C) 9848/2009 DPS SOCIETY .....Petitioner Through: Mr. Satyen Sethi & Mr. Arta Trana Panda, Advocates. versus UOI .....Respondent Through: Mr. Gaurav Gupta, SSC with Mr. Shivendra Singh, JSC. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR O R D E R % 12.02.2026 1. These writ petitions have been filed against order(s) dated 26.02.2009 passed by respondent no.5, whereby the exemption under Section 10(23C)(vi) of the Income Tax Act, 1961 (hereinafter referred to as “The Act of 1961”) for assessment year 2005-06 to 2007-2008 in W.P.(C) 9847/2009 and AY 2002-03 to 2004-05 in W.P.(C) 9848/2009 has been withdrawn following the order dated 30.04.2008 passed by the respondent no. 5 himself for the AY 2008-09. 2. Learned counsel for the petitioner at the outset submitted that against the said order dated 13.04.2008, the petitioner had preferred a writ petition, which was allowed by this Court in the case of DIT (Exemption) v. Delhi Public Society decided on 03.04.2018 reported in 2018 (403) ITR 49 Delhi. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/02/2026 at 13:32:27 Printed from counselvise.com and, SLP thereagainst has been rejected by Hon’ble the Supreme Court. 3. He submitted that vide its judgment dated 03.04.2018, this Court has categorically recorded a finding that the charging of franchise fees for various schools being run under the aegis of the society was only incidental activity and for this reason the society cannot be said to be business income. 4. Learned counsel submitted that all the facts are identical and therefore, these writ petitions also deserve to be allowed. 5. Mr. Gaurav Gupta, learned Senior Standing Counsel, was not in a position to dispute the aforesaid position of fact and law. 6. In view of what we have noticed hereinabove, the writ petitions are allowed and the impugned order(s) dated 26.02.2009 passed by the respondent no.5 are hereby quashed and set aside. 7. The respondents are directed to do the needful consequent to quashment of the order dated 26.02.2009 and pass consequential order in accordance with law. DINESH MEHTA, J. VINOD KUMAR, J. FEBRUARY 12, 2026/nk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/02/2026 at 13:32:27 Printed from counselvise.com "