M/S. SRI KRISHAN EDUCATIONAL TRUST,KURUKSHETRA V. DGIT (INV.), LUCKNOW

ITA 4092/DEL/2015

AI Insights

The case involves M/s. Sri Krishan Educational Trust appealing against the cancellation of their approval under Section 10(23C)(vi) of the Income Tax Act, 1961, by the Director General of Income Tax (Investigation), Lucknow. The Tribunal examined whether the DGIT (Inv.), Lucknow had the authority to cancel the approval, which was initially granted by the Chief Commissioner of Income Tax, Haryana Region. The Tribunal's decision hinged on the interpretation of the CBDT notification that specified the Commissioner of Income Tax (Exemptions) as the sole authority for such matters after a certain date. The Tribunal found that the DGIT (Inv.) acted beyond its jurisdiction, leading to the allowance of the appeal and the setting aside of the cancellation order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470148 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Other Referred Cases: NTPC Limited vs. 229 ITR 383 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMAR PAL SINGH
• Assessee Lawyers: SALIL KAPOOR
• Section: 10

Judgement Text

"Page | 1 THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER (Through Video Conferencing) ITA No. 4092/DDN/2015 (Assessment Year: 2011-12) M/s. Sri Krishan Educational Trust, Rattan Dera Road, Kurukhetra Vs. Director General of Income Tax (Inv), Lucknow thru DCIT, Central Circle, Dehradun (Appellant) (Respondent) PAN:AAATS3624C Assessee by : Shri Salil Kapoor, Adv Shri Sumit Lalchandani, Adv Shri Tarun Chanana, Adv Mr. Shivam Yadav, Adv Ms. Ananya Kapoor, Adv Revenue by: Shri Amar Pal Singh, Sr. DR Date of Hearing 18/03/2025 Date of pronouncement 02/04/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No. 4092/DDN/2024 for AY 2011-12, arises out of the order of the Director General of Income Tax (Investigation), Lucknow dated 26.03.2015 [hereinafter referred to as ‘ld. CIT(E)’, in short] dated 26.03.2015. 2. The only effective issue to be decided in this appeal is as to whether the learned Director General of Income Tax (Investigation) [ in short DGIT (Inv.)], Lucknow was justified in cancelling the approval granted under Section 10(23C)(vi) of the Act in the facts and circumstances of the instant case. The assessee has also raised additional grounds vide letter dated 6- ITA No. 4092/DDN/2015 M/s. Sri Krishan Educational Trust Page | 2 10-2018, wherein it had challenged the authority of DGIT (Inv.) Lucknow to even pass the cancellation order of approval under section granted under Section 10(23C)(vi) of the Act. These additional grounds raised by the assessee go to the root of the matter and does not require verification of any facts as all the facts relevant there on are already placed on record. Accordingly, these additional grounds are hereby admitted in the light of decision of Hon’ble Supreme Court in the case of NTPC limited reported in 229 ITR 383 (SC). 3. We have heard the rival submissions and perused the materials available on record. It is not in dispute that assessee is existing solely for educational purposes and not for the purpose of profit. The assessee has been granted approval under Section 10(23C)(vi) of the Act vide order passed by Learned Chief Commissioner of Income Tax, Haryana Region, Panchkula dated 31-10-2003 from assessment year 2008-09 onwards. This approval granted under Section 10(23C)(vi) of the Act was sought to be cancelled by the Learned DGIT (Inv.), Lucknow, vide order dated 26-03- 2015. Without going into the reasons for which the approval earlier granted was sought to be cancelled by the Learned DGIT (Inv.), Lucknow on merits, it is pertinent to understand as to whether the Learned DGIT (Inv.), Lucknow is the specified authority in terms of provisions of Section 10(23C)(vi) of the Act for effecting the cancellation of approval earlier granted thereon. In this regard, the notification issued by the Central Board of Direct Taxes (CBDT) vide Notification No. 76 /2014 dated 1-12- 2014 superseded by Notification No. 20/2015 dated 5-3-2015 becomes relevant. For the sake of convenience, the said notification is reproduced below:- “SECTION 10(23C)(vi)/(via) OF THE INCOME-TAX ACT, 1961 - EXEMPTION - UNIVERSITY/EDUCATIONAL INSTITUTIONS/HOSPITALS ITA No. 4092/DDN/2015 M/s. Sri Krishan Educational Trust Page | 3 - PRESCRIBED AUTHORITY - SUPERSESSION OF NOTIFICATION NO. SO 852(E)[F.No. 153/41/2007-TPL], DATED 30-5-2007 NOTIFICATION NO. 76/2014 [F.NO. 196/26/2014-ITA.I]/SO 3027(E), DATED 1- 12-2014 [SUPERSEDED BY NOTIFICATION NO. 20/2015 [F.NO. 196/26/2014-ITA.I]/SO 676(E), DATED 5-3-2015] In pursuance of the provisions contained in sub-clauses (vi) and (via) of clause (23C) of section 10 of the Income-tax Act, 1961 (43 of 1961) read with rule 2CA of the Income-tax Rules, 1962, and in supersession of the notification of the Ministry of Finance, Central Board of Direct Taxes dated the 30th May, 2007 published in the Gazette of India, Extraordinary, Part II, section (3), sub-section (ii) vide number S.O. 852(E), dated the 30th May, 2007 except as respects things done or omitted to be done before such supersession, the Central Board of Direct Taxes hereby authorises the Commissioners of Income-tax (Exemptions), to act as 'prescribed authority' for the purposes of sub-clause (vi) and sub-clause (via) of clause (23C) of section 10 with effect from the 'specified date'. 2. The 'specified date' for the purpose of the aforesaid rule 2CA shall be the 15th day of November, 2014.” 4. So, from the perusal of the aforesaid notification, it is very clear that the prescribed authority for the purpose of Section 10(23C)(vi) of the Act would be Commissioner of Income Tax (Exemptions) or Principal Commissioner of Income Tax (vide Notification No. 61/2014 dated 10-11- 2014). Further, the specified date for the purpose of Rule 2CA read with Section 10(23C)(vi) of the Act shall be 15-11-2014. Hence, from 15-11- 2014, the prescribed authority for either granting the approval or cancelling the approval under Section 10(23C)(vi) of the Act shall be vested only with Principal Commissioner of Income Tax or Commissioner of Income Tax (Exemptions). Hence, the order passed by the Learned DGIT (Inv.) Lucknow cancelling the approval granted under Section 10(23C)(vi) of the Act in the instant case is beyond the authority provided in the statute and is in gross violation of CBDT notification referred supra. Accordingly, the cancellation order passed by the Learned DGIT (Inv.), Lucknow is hereby treated as void ab initio for want of jurisdiction per se. Since the entire cancellation order passed by the Learned DGIT (Inv.) has been declared void ab initio for want ITA No. 4092/DDN/2015 M/s. Sri Krishan Educational Trust Page | 4 of jurisdiction, the other grounds raised by the assessee on merits need not be gone into and they are left open. Accordingly, the grounds raised by the assessee are allowed. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 02/04/2025. -Sd/- -Sd/- (SATBEER SINGH GODARA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:02/04/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "