St. Maryu2019s Educational Society V. The Chief Commissioner of Income Tax, Hyderabad \\u2013 1

WP/27482/2007

AI Insights

The case involves St. Mary's Educational Society, represented by its Secretary Mrs. Y. Mary, seeking a writ of Certiorari from the High Court of Andhra Pradesh to challenge the rejection of their application for tax exemption under Section 10(23-C)(iv) of the Income Tax Act for the assessment years 2005-2006 and 2006-2007. The application was initially rejected by the Chief Commissioner of Income Tax, Hyderabad, due to alleged violations of Sections 11(5) and 13(1)(d) of the Income Tax Act, which pertain to the handling of surplus funds and the prohibition of capitation fees, respectively. The court did not address the merits of the case but allowed the petitioner to submit objections to the rejection of their application, which the respondent is required to consider and respond to within a specified timeframe.

• Counselvise Citation: [2007] 140 COUNSELVISE.COM (IT) 681244 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 31-12-2007
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Keywords: Capitation Fee; Educational Society; Exemption; Income Tax; Profit; Writ of Certiorari
• Section: 12; 11(5); 13(1)(d); 10(23)(c)(vi); 10(23-C)(iv)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD THE HON’BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON’BLE MS. JUSTICE G.ROHINI WRIT PETITION NO. 27482 OF 2007 Dated : December 31, 2007 Between: St. Mary’s Educational Society,] Rep. By its Secretary Mrs.Y.Mary. Petitioner AND The Chief Commissioner of Income Tax, Hyderabad –1, Ayakar Bhavan, Basheerbagh, Hyderabad Respondent THE HON’BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON’BLE MS. JUSTICE G.ROHINI WRIT PETITION NO. 27482 OF 2007 ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of Certiorari to call for the records relating to File No.CC/Tech.I/22b (153)/2007-08 dated 31.10.2007 whereby the application of the petitioner seeking exemption was rejected and consequently to grant recognition to the petitioner under the provisions of Section 10(23-C)(iv) of the Income Tax Act for the assessment year 2005-2006 and 2006-2007, the petitioner filed this writ petition. The petitioner is a Society formed with the object of establishing Educational Institutions for imparting education and in furtherance of such object, it established Junior and Degree Colleges at Himayathnagar and at Yousufguda. It is averred that the petitioner Society does not impart or offer coaching classes for EAMCET or any other competitive examinations. The petitioner is an assessee on the rolls of the respondent, under Sec. 12 of the Income Tax Act. While so, the petitioner made an application under Sec.10(23-C) (vi) of the Income Tax Act claiming exemption in Form 56- D on 27.10.2006 annexing Memorandum of Articles of Association. The petitioner claimed exemption for the assessment year 2005-06 and 2006-2007. While so, the respondent by impugned order dated 31.10.2007 rejected the petitioner’s application under sub-clause (6) of Sec. 10(23-C) of the Income Tax Act for violation of Sec. 11(5) read with Sec. 13(1)(d) which contemplates that surplus funds, if any of the institution, should be deposited in the securities enumerated in Sec. 11(5); that the petitioner has collected capitation fee prohibited under the A.P. Educational Institutions (Regularisation of Admission and Prohibition of Capitation Fees) Act, 1983 and that the petitioner’s institution is running for the purpose of profit. The impugned order further shows that though notice was issued on 23.10.2007 itself, fixing the date of hearing on 19.10.2007, there was no representation on behalf of the petitioner Institution, as such, the application submitted by the petitioner seeking exemption under Sec. 10(23-C) (vi) of the Income Tax Act for the assessment years 2006-07 and 2007-08 was rejected. Heard the learned counsel for the petitioner and the learned Standing Counsel for the Income Tax Department. The learned counsel for the petitioner submitted that the impugned order is passed without putting the petition on notice and, therefore, contended that an opportunity be given to the petitioner to submit objections. Having regard to the facts and circumstances of the case and having heard the learned counsel for the petitioner and respondent, we feel that the writ petition can be disposed of giving liberty to the petitioner to filed objections to the impugned order dated 31.10.2007. Accordingly, without delving on merits or otherwise of the contention raise by the petitioner, the writ petition is disposed of giving liberty to the petitioner to raise all the objections that are available to it before the respondent, within a period of two weeks from day and on such filing of the objections by the petitioner, the respondent is directed to consider the same and pass appropriate orders after affording an opportunity of hearing to the petitioner, within a period of three months therefrom. With these directions, the writ petition is disposed of. No order as to costs. ____________________ T.MEENA KUMARI, J. ____________ G.ROHINI, J. December 31, 2007 MAS "