MALA EDUCATIONAL TRUST, KURUVILASSERY V. UNION OF INDIA

WP(C)/5503/2012

AI Insights

The case involves the Mala Educational Trust, a charitable trust running an engineering college, which challenged the revocation of their income tax exemption by the Chief Commissioner of Income Tax. The exemption was initially granted under Sub Clause (vi) of Clause (23C) of Section 10 of the Income Tax Act, 1961, but was revoked due to alleged financial misconduct by the trustees. The petitioner argued that they were not given a fair opportunity to present their case before the 2nd respondent, while the respondent countered that multiple opportunities had been provided. The court found that despite the petitioner's lapses, they should be given another opportunity to present their case, subject to the payment of costs.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 722339 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-10-2017
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: M NAMBIAR; P GOPINATH; P THOMAS; K MATHAI; KURYAN THOMAS
• Keywords: Charitable Trust; Engineering College; Income tax exemption; Opportunity of Hearing; Revocation of exemption
• Section: 10

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE WEDNESDAY, THE 4TH DAY OF OCTOBER 2017/12TH ASWINA, 1939 WP(C).No. 5503 of 2012 (K) --------------------------- PETITIONER: ---------- MALA EDUCATIONAL TRUST, KLURUVILASSERY,MALA,THRISSUR-680732, REPRESENTED BY ITS CHAIRMAN, DR.SHAJU A ANTONY. BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.KURYAN THOMAS RESPONDENT(S): -------------- 1. UNION OF INDIA, REPRESENTED BY ITS REVENUE SECRETARY,MINISTRY OF FINANCE,NEW DELHI-110 004. 2. CHIEF COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDINGS,I S PRESS ROAD, KOCHI-682018. BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-10-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.V. WP(C).No. 5503 of 2012 (K) --------------------------- APPENDIX PETITIONER(S) EXHIBITS EXT.P1 TRUE COPY OF THE ORDER DATED 18.12.2007 PASSED BY THE 2ND RESPONDENT TO THE PETITIONER. EXT.P2 TRUE COPY OF THE NOTICE DATED 24.12.2010 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT EXT.P3 TRUE COPY OF THE LETTER DATED 10.01.2011 FILED BY THE PETITIONER IN REPLY TO EXHIBIT P2 NOTICE OF THE 2ND RESPONDENT. EXT.P4 TRUE COPY OF THE LETTER DATED 29.09.2011 ISSUED TO THE PETITIONER BY HE 2ND RESPONDENT. EXT.P5 TRUE COPY OF THE LETTER DATED 14.12.2011 PASSED BY THE 2ND RESPONDENT TO THE PETITIONER. EXT.P6 TRUE COPY OF THE PETITION DATED 31.01.2012 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT.P7 TRUE COPY OF THE ORDER DATED 09.02.2012 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. RESPONDENTS' EXHIBITS: ---------------------- R2(A) TRUE COPY OF THE LETTER DATED 22.11.2011 BY THE 2ND RESPONDENT. R2(B) TRUE COPY OF THE PETITION FILED BEFORE THE CBDT DATED 15-12-2011 /TRUE COPY/ K.V. P.S.TO JUDGE A. MUHAMED MUSTAQUE, J. ................................................. W.P.(C) No. 5503 of 2012 ............................................... Dated this the 04th day of October, 2017 JUDGMENT The petitioner, which is a charitable trust running an Engineering College at Mala, have approached this Court challenging Exts.P5 and P7 orders, by which the exemption granted to them by Ext.P1 order dated 18.12.2007 for exemption of income by invoking powers under Sub Clause (vi) of Clause (23C) of Section 10 of the Income Tax Act, 1961 (43 of 1961), on certain conditions, has been revoked. 2.The learned counsel for the petitioner submitted that, though they have engaged a counsel to represent them, they could not avail the opportunity of hearing before the 2nd respondent to raise objection against revocation of the exemption. Therefore, they should be given one more opportunity before the 2nd respondent/Commissioner to substantiate their contention. 3.The learned standing counsel submitted that ample opportunities were given to the petitioner to substantiate their W.P.(C) No. 5503 of 2012 2 claims and they could not avail the same. It is further submitted that the petitioner is unnecessarily lagging the case. It is also pointed out by the learned standing counsel that crores of rupees were siphoned off by the trustees. 4.Learned counsel for the petitioner further submits that the explanations offered by them in Ext.P6 contains explanation to each of the grounds referred in the show cause notice, and seeks for a direction to give an opportunity of hearing to convince their explanation before the 2 nd respondent. 5.Considering the facts and circumstances, this Court is of the view that there are latches on the part of the petitioner, but that should not result in denial of opportunity to the petitioner to substantiate their explanation before the appropriate forum. The latches can be remedied by imposing costs on the petitioner. Therefore, impugned order is set aside, on condition that the petitioner should pay Rs.1,00,000/- (Rupees one lakh only) as costs, before the 2 nd respondent within four weeks from today. The petitioner shall appear before the 2 nd W.P.(C) No. 5503 of 2012 3 respondent/Chief Commissioner of Income Tax, Kochi on 06.11.2017. 6.It is made clear that in case the petitioner fails to pay the costs as directed above, the benefit of this direction will stand automatically vacated without any further orders from this Court. sd/- A. MUHAMED MUSTAQUE JUDGE AMV/05/10/2017 "