HRTC V. CHIEF COMMISSIONER OF INCOME TAX

CWP/1719/2008

AI Insights

The case involves the Himachal Road Transport Corporation (petitioner) challenging the decision of the Central Board of Direct Taxes (respondent) regarding the recognition of their General Provident Fund Trust. The trust was established on April 1, 1998, but was not recognized for tax exemption purposes until October 31, 2002. The petitioner argued that their application for recognition from the date of the trust's inception was overlooked by the CBDT in their decision dated June 25, 2008. The High Court found that the CBDT had indeed failed to consider this aspect and directed them to re-evaluate the application for the specified period.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 752320 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 04-09-2017
• Assessment Year: misc
• Laws Referred To: Employees Provident Fund and MPF Act 1952, Income Tax Act 1961, Income Tax Rules 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SUKARMA SHARMA; VANDANA KUTHIALA
• Assessee Lawyers: GOVERDHAN SHARMA
• Keywords: Exemption; Income Tax; Provident fund; Recognition; Trust
• Section: 2(38)

Judgement Text

" IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CWP No. 1719 of 2008 Date of Decision: September 4, 2017 Himachal Road Transport Corporation & another …Petitioner. Versus The Secretary Central Board of Direct Taxes & others ...Respondents. Coram: The Hon’ble Mr. Justice Sanjay Karol, Acting Chief Justice. The Hon’ble Mr. Justice Ajay Mohan Goel, Judge. Whether approved for reporting?1 For the Petitioner: Mr.Goverdhan Sharma, for the petitioner. For the Respondents: Ms.Sukarma Sharma, Advocate, vice counsel, for respondent No.1. Ms.Vandana Kuthiala, Advocate, for respondents No.2 to 4. Sanjay Karol, Acting Chief Justice Petitioner is essentially aggrieved of the fact that while passing order dated 25.06.2008 (Annexure P- 9), appropriate Authority i.e. Central Board of Direct Taxes, did not consider and pass any order on the petitioner’s ground for grant of exemption/according 1 Whether reporters of the local papers may be allowed to see the judgment? 2 recognition w.e.f. 01.04.1998, the date on which the Himachal Pradesh Road Transport Corporation General Provident Fund Trust, came to be created vide Trust Deed (Annexure P-2). 2. We find the petitioner to have raised the ground and the appropriate Authority not to have considered this aspect of the matter, though recognition to the Trust stands accorded w.e.f. 31.10.2002. 3. Certain facts are not in dispute. Prior to the incorporation of the Trust in question, under the provisions of the Employees Provident Fund and MPF, Act 1952 (hereinafter referred to as the Act, 1952), recognition stood accorded by the appropriate Authorities to the predecessor of the present petitioner. Communication dated 19.10.1973 that of the Department of Income Tax, reads as under:- “TELEGRAM CUM FAX No.CPF/S/SS-69/SIC Office of the Commissioner of Income Tax Patiala-II Dated Patalia the 19-10-1973 To The General Manager, Mandi Kullu Road Transport Corporation, Mandi. Subject:- Recognition of Contributory Provident Fund- Mandi Kullu Road Transport Corporation, Mandi. 3 Dear Sir, Please refer to your application dated 23-5-1968 for approval of gratuity fund of the corporation and correspondence resting with your D.O.No.4188 dated 11th October, 1973. As your provident fund was established under Employees Provident Fund Act, 1952, it is to be treated as a recognized provident fund in the very terms of sub section (38) of section 2 of Income Tax Act, 1961. Hence the recognition of the fund, as such is not necessary. The Income Tax Officer, A-Ward Shimla is being apprised of the position. Yours faithfully, Sd/- Income Tax Officer(SD-1) For Commissioner Income Tax Patiala.” 4. The efficacy of such recognition under the Act, 1952, was till the formation of the Trust which was as of 01.04.1998. It is not that at no point in time, recognition either under the provisions of the Act, 1952 or Income Tax Act, 1961 (hereinafter referred to as the Act, 1961) was accorded to the petitioner. At this point in time, it be also observed that the Mandi Kullu Road Transport Corporation and the Himachal Government Transport were amalgamated with the formation of a new body known as Himachal Road Transport Corporation w.e.f. 01.10.1974. 4 5. From the order dated 25.06.2008, so passed by the Central Board of Direct Taxes, we find that there is no discussion or finding on these aspects and all this despite petitioner having urged the same in the grounds of appeal. 6. As such, on this short ground alone, without adjudicating the petition on merits, more specifically, applicability of Rule(s) 77/78 of the Income Tax Rules, 1962, we dispose of the present petition with a direction to the Central Board of Direct Taxes to take a fresh decision pertaining to the period 01.04.1998 till 30.10.2002. Parties to appear before the Board on 17.10.2017. Decision be taken within a period of three months thereafter. Pending application(s), if any, also stand disposed of. (Sanjay Karol), Acting Chief Justice. September 4, 2017 (Ajay Mohan Goel), (Purohit) Judge. "