S.P. Sampathy's Siva Sivani Educational Society V. The Director of Income Tax (exemptions) and The Chief Commissioner of Income Tax, Hyderabad-1

WP/7806/2008

AI Insights

The case involves S.P. Sampathy's Siva Sivani Educational Society, which sought a writ of mandamus against the Director of Income Tax (Exemptions) and the Chief Commissioner of Income Tax, Hyderabad. The petitioner challenged the decision of the second respondent, which denied the society's application for tax exemption under Section 10(23C)(vi) of the Income Tax Act, 1961, for the assessment years 1999-2000 to 2006-2007. The society argued that the decision was made without a proper hearing, violating principles of natural justice. The court found that the second respondent had not adequately considered the request for a hearing and thus remanded the case for a fresh decision.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 808239 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 20-08-2008
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, A.P. (Telangana Area) Public Societies Registration Act, 1350 Fasli
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: S R ASHOK; V R BADRI
• Assessee Lawyers: V R RAGHU RAM
• Keywords: Assessment years; Exemption; Income Tax; Natural Justice; Writ of Mandamus
• Section: 10(23C)(vi)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTIETH DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE P.V.SANJAY KUMAR WRIT PETITION NO : 7806 of 2008 Between: S.P. Sampathy's Siva Sivani Educational Society, Kompally, Via Hakimpet, Secunerabad-500014, Rep by its Chairperson smt. Arathy Sampathy. ..... PETITIONER AND 1 The Director of Income Tax (exemptions) Olympic Bhavan, basheerbagh, Hyderabad. 2 The Chief Commissioner of Income Tax, Hyderabad-1, Block \"A\" 9th Floor, IT Towers, A.C. Guards, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ, direction or order especially one in the nature of Writ of Mandamus declaring that the order of the 2nd Respondent dt 31-12-2007 declining to grant exemption to the petitioner society for the assessment years 1999-2000 to 2006-2007 under the provisions of section 10(23C) (Vi) of the Income Tax Act, 1961 without even providing an opportunity of being heard to the petitioner, as being illegal, arbitrary and against the principles of natural justice and set a side the same, and consequently direct the 2nd respondent to consider the applications filed by the petitioner for exemption of its income for the assessment years 1999-2000 to 2006-2007 afresh adhering to the principles of natural justice and pass such other order(s) as the Hon'ble Court deems fit and proper in the interest of justice. Counsel for the Petitioner: MRA.V.RAGHU RAM Counsel for the Respondent No.: MR.S.R.ASHOK & V.R.BADRI (SC FOR INCOME TAX) The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of mandamus declaring the order dated 31.12.2007 passed by the second respondent whereby exemption sought for by the petitioner Society for the Assessment years 1999- 2000 to 2006-2007 under the provisions of Sec. 10(23C)(vi) of the Income Tax Act, 1961 was declined, without providing an opportunity of being heard, as illegal and arbitrary and consequently to set aside the same directing the second respondent to consider the applications filed by the petitioner for exemption, the present writ petition is filed. The petitioner is a society registered under the provisions of A.P . (Telangana Area) Public Societies Registration Act, 1350 Fasli, in the year 1997 and the educational institutions established by the society impart education to the students from pre- primary to post-graduate studies. The case of the petitioner is that its income is exempted under the provisions of Sec. 10(23C)(vi) of the Income Tax Act, if the prescribed authority approves it. In terms of the above provision, the petitioner made applications to the first respondent, which is the prescribed authority for granting the exemption, for the assessment years 1999-2000 to 2006-2007 on different dates and the first application made on 30.06.1999 is pending consideration before the first respondent for more than eight years. While so, on 10.12.2007, the second respondent issued show cause notice to the petitioner, to which it made preliminary submission dated 28.12.2007 and specifically prayed for an opportunity to represent the case before the second respondent. The second respondent having adjourned the personal hearing from 19.12.2007 and having received the preliminary explanation dated 28.12.2007, without affording an opportunity of hearing, passed an order dated 31.12.2007 dismissing the applications filed by the petitioner seeking exemptions, which is impugned in this writ petition. It is contended on behalf of the petitioner that the impugned order is liable to be set aside for the reason that the second respondent did not afford an opportunity of hearing even though a specific request was made in that regard. The learned Senior Standing Counsel for Income Tax Department, argued that since the petitioner sought time during the month of January, 2008, to represent the case and since the applications seeking exemption included an application dated 8.12.2006 for the assessment year 2006-2007, which had to be disposed of before 31.12.2007 in view of the time limit imposed by the proviso to Sec. 10(23C) of the Income Tax Act, the impugned order was passed after considering the preliminary objections raised by the petitioner in its letter dated 28.12.2007. Counter affidavit filed by the second respondent, is also to the same effect. Having regard to these facts, without adverting to merits or otherwise of the contentions raised by the petitioner, we are of the opinion that the matter requires reconsideration by the second respondent, after affording an opportunity of hearing to the petitioner. Accordingly, the writ petition is allowed and the impugned order dated 31.12.2007 is set aside and the matter is remanded back to the second respondent with a direction to resolve the issue after affording an opportunity of hearing to the petitioner by passing an order afresh, within a period of two months from the date of receipt of a copy of this order. It is needless to add that the petitioner shall cooperate with the second respondent in early disposal of the matter and in case of default the impugned order becomes operative. With this direction, the writ petition is allowed. No order as to costs. ____________________ Justice T.Meena Kumari ______________________ Justice P.V. Sanjay Kumar August 20, 2008 MAS ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRT} "