M/S QUEST ALLIANCE V. THE UNION OF INDIA

WP/5218/2022

AI Insights

The case involves M/s Quest Alliance, represented by its CEO Mr. Aakash Gagan Sethi, who filed a writ petition against the Union of India and the Central Board of Direct Taxes. The petitioner challenged the provisions of Rule 4 of the CSR Rules, which exclude trusts/institutions registered under Section 10(23C) of the IT Act from receiving funds for CSR activities. The petitioner argued that this exclusion is discriminatory and violates Article 14 of the Constitution of India. Despite multiple representations to the respondents, no action was taken, prompting the filing of this petition. The court, noting that the respondents were already considering the petitioner's grievances, directed them to expedite their decision-making process and address the issues raised.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 742121 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-09-2022
• Assessment Year: misc
• Laws Referred To: Constitution of India, Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SHANTHI H; E I SANMATHI
• Assessee Lawyers: T SURYANARAYANA; SONISHA NALLURU; TANMAYEE RAJKUMAR
• Keywords: Discriminatory; Income Tax Act; Trusts; Violative of Article 14; CSR Rules; Institutions
• Section: 10(23C); 226; 227

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 5TH DAY OF SEPTEMBER, 2022 BEFORE THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR WRIT PETITION No.5218 OF 2022 (T-IT) BETWEEN: M/S QUEST ALLIANCE #108, 2ND MAIN, 6TH CROSS 1ST BLOCK, KORAMANGALA BANGALORE - 560 034 REPRESENTED HEREIN BY ITS THE CHIEF EXECUTIVE OFFICER MR. AAKASH GAGAN SETHI …PETITIONER (BY SRI. T. SURYANARAYANA, SR.COUNSEL A/W SMT. SONISHA NALLURU A/W SRI. TANMAYEE RAJKUMAR, ADVOCATES) AND: 1. THE UNION OF INDIA REPRESENTED HEREIN BY THE SECRETARY MINISTRY OF CORPORATE AFFAIRS GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI – 110 001. 2. CENTRAL BOARD OF DIRECT TAXES REPRESENTED HEREIN BY THE SECRETARY (ITA-2) ROOM NO.245A, NORTH BLOCK NEW DELHI – 110 011. (IMPLEADED VIDE ORDER DATED: 05.09.2022) …RESPONDENTS (BY SRI. SHANTHI BHUSHAN.H., ASGI FOR R-1; SRI. E.I. SANMATHI, ADVOCATE FOR R-2) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT THE PROVISIONS OF RULE 4 OF THE CSR RULES TO THE EXTENT THAT THEY EXCLUDE TRUSTS / INSTITUTION REGISTERED UNDER SECTIONS 10 (23C) OF THE IT ACT IS DISCRIMINATORY AND VIOLATIVE OF ARTICLE 14 OF THE CONSTITUTION OF INDIA AND ETC. 2 THIS W.P. COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:- ORDER In this petition, petitioner has sought for the following reliefs: (i) Declare that the provisions of Rule 4 of the CSR Rules, to the extent that they exclude trusts / institution registered under Sections 10(23C) of the IT Act is discriminatory and violative of Article 14 of the Constitution of India; and (ii) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity. 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. The material on record discloses that prior to filing of this petition, petitioner addressed representations to the respondents and other concerned authorities including e-mail, etc., dated 02.12.2021, 22.12.2021, 30.12.2021 and 13.01.2022. Since, the respondents have not taken any steps to address the grievances of the petitioner, it is 3 before this Court by way of the present petition. A perusal of the statement of objections filed by the respondent No.1, in particular, para 8 will indicate as under: “8. That it is pertinent to mention here that the respondent has already received a representation dated 13.01.2022 from the petitioner relating to the grounds raised in this petition and the same is currently under consideration of competent authority. Further, the answering respondent is already undertaking consultation with relevant authority (i.e., Central Board of Direct Taxes) for the subject matter and other stakeholders including Institute of Chartered Accountants of India etc., regarding the issue relating to the amended rule exclude certain trust / institutions registered under Section 10(23C) of the Income Tax Act from receiving funds for the purpose of CSR activities.” 4. Though several contentions have been urged by the petitioner in the present petition with regard to the validity of Rule 4 of the CSR Rules to the extent they exclude trusts / institutions / organizations registered under Section 10(23C) of the IT Act, 1961, having regard to the undisputed fact that the respondents are in the process of addressing the grievances of the petitioner as ventilated in the aforesaid representations, without expressing any 4 opinion on the merits / demerits of the contentions urged by the petitioner and reserving liberty in favour of the petitioner to urge the same by taking recourse to remedies as available in law including filing of fresh petition in the future as they may be so advised, I deem it just and appropriate to dispose of this petition directing the respondents to address the grievance of the petitioner and consider and pass appropriate orders / take appropriate decision on the aforesaid representations as expeditiously as possible and at any rate on or before 30.11.2022. Subject to the aforesaid directions, petition stands disposed of. Sd/- JUDGE SV "