Swarna Educational Academy V. The Principal Commissioner of Income Tax and 3 others

WP/26530/2021

AI Insights

Swarna Educational Academy, represented by its chairman, filed a writ petition under Article 226 of the Constitution of India against various income tax authorities challenging the legality of tax demands for the Assessment Years 2015-16 and 2018-19. The petitioner, an educational institution registered as a charitable trust, claimed exemptions under Sections 11 and 12 of the Income Tax Act, 1961, which were not accepted, leading to the tax demands. The court heard arguments from both sides and decided to direct the appellate authorities to expedite the resolution of the ongoing appeals rather than adjudicate the writ petition's substantive issues.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753451 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 21-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K REDDY
• Assessee Lawyers: M A MUJEEB
• Keywords: Assessment Year; Charitable Trust; Income tax exemption; Natural Justice; Tax demand; Writ of Mandamus
• Section: 143(3); 143(1); 11; 12; 226; 12AA(1)(aa)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA: AT HYDERABAD (SPecial Original Jurisdiction) IVONDAY ,THE TWENTY FIRST DAY OF FEBRUARY TWO THOUSAND AND TWENTY TWO PRESENT THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON'BLE SRI JUSTICE A.VENKATESHWARA REDDY WRIT PETITION NO: 2653 0 0F 2021 Between: Swarna Educational Academy, Rep' by its Chairman' Having office at H' No' ii:ii6tT, [iJirr\" n\"iia\",iiiui-ion1'pr\"', suchitra Road' old Alwal Secunderabad. ...PETITIONER AND '1 . The Principal Commissioner of lncome Tax' Hyderabad' 2. The Commissioner of lncome Tax Appeals-lV' Hyderabad' 3. The Commissioner lncome Tax Exemptions' Hyderabad' 4. The lncome Tax Officer, Exemption Ward I (4)' Hyderabad' ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith' the High Court may be pleased to issue any order or direction more particularly one in the nature of Writ ofMandamusoranyotherappropriatewritororderordirectiondeclaringthe proceedings dated. 30.08.2021 vide DIN and Letter No ITBA/COM/F/171 2021- 22t1035178863(1) for the assessment year 2015-2016 and 2018-2019 and vide DIN and Letter No. ITBA/COM/F/'1 7t2021'2211035930032(1) under the lncome TaxAct,,l96lWithoutconsideringtheexplanationsandwrittensubmissionsofthe Petitioner / assessee from time to time including the representation dated 21 .Og.2021is as illegal, arbitrary, contrary to the provisions of the lncome Tax Act 1g61 without jurisdiction barred by limitation and in violation of principles of natural justiceandruleoflawandtosetasidethesameaSitiSnotvalidintheeyeoflaw and consequently set aside the proceedings dated' 30 08'2021 vide DIN and I Letter No. ITBA/COM/F/1 7l 2021-2211035178863(1) for the assessment year 2015-2016 and 2018-2019 and vide DIN and Letter No. ITBA/CO| 1/F/1 712021- 2211035930032(1) passed by the respondents herein as null and void, in the interest of justice. lA NO: 1 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings, pursuant to the Assessment Proceedings passed by the respondents herein, dated. 30.08.2021 vide DIN and Letter No. ITBA/COM/F/171 2021-2211035178863(1) for the assessment year 2015-2016 and 2018-2019 and vide DIN and Letter No. ITBA/COIV/F/1712021-2211035930032(1) under the lncome Tax Act, 1961, pending disposal of the writ petition. Counsel fortfe Respondents: SRI K.RAJI REDDY, SC for lT The Court made the following: ORDER Counsel for the Petitioner: SRI M.A.MUJEEB THE HOT{OURABLE SRI JUSTICE UJJAL BHIIYAN AND THE HONOURABLE SRI JUSTICE A. VENXATESHWARA REDDY ORDER: (Per Hon'btc Sri .lu;rrcc (iilcti Rhuun) Heard Mr. M.A. Mujeeb, learned counsel for the petitioner and Mr. K. Raji Reddy, learned Standing Counsel for the Income Tax Department, for the respondents. 2. This writ petition is filed under Article 226 of the Constitution of India challenging the legality and validity of letters dated 30.08.2021 and 27.O9.2O21, issued by the respondent No.4. 3. By the first letter dated 30.08.202 1, it u,as mentioned that for the Assessment Years 2Ol5- 16 and 2018-19 there vere outstanding tax demands of Rs.7,10,620.00 and Rs.2,14,37,380.00, respectively. IL Stating that the demands had to be paid r'vithin thirty Writ Fetition No.2653O of 2O2L U S,-J & AVR,J wp_26510_2021 (30) days from the date of receipt of the said demand notice, petitioner was called upon to make the payment or, in the event of any disagreement, to furnish requisite information / rectification application. 4. By the second ietter dated 27.09.2021, petitioner lvas informed that since it has filed appeal before respondent No.2 it had to pay 2O'/\" of the disputed demand, failing which, recovery action rvould be initiated. 5. According to the petitioner, it is an educational institution established in the year 2OO1 and functioning since then in the city of Hyderabad. It has applied for registration under the income Tax Act, 196l (briefly, the 'Act' hereinafter) as a Charitabie Trust and has been granted exemption under Section 12AA(1)(aa) of the Act on 27.O7 .2O17. 6 For the Assessment Years 2015-16 and 20i8-19. ) petitioner filed its income tari returns declaring total I U 8,.,] & AVR,J wp_265J0_2021 income as nil by claiming exemption under Sections 11 and 12 of the Act. It appears that the claims of exemptions were not accepted u,hereafter assessment orders were passed, following which, the above demands u,ere raised. 7. In the counter-affidavit filed by respondent No.4, it is stated that for the Assessment Year 2015-16, assessment order was passed by respondent No.4 on 11.12.2017 under Section 143(3) of the Act assessing the taxable income of the petitioner at Rs.22,74,580.00. Against this order of assessment, petitioner had preferred appeal before the Commissioner of Income Tax (Appeals), Hyderabad-9. 8. By order dated 27.03.2019, the first appeliate authority dismissed the appeal of the petitioner. preferred further appeal i.e., 1.T.A.No.947 lHydl2Ol9 before the Income Tax Appellate Tribunal, Hyderabad which is stated to be pending. 9. Against such dismissai of appeal, petitioner has UB,J & AVR,] wP_265Jo_2o21 10. For the Assessment Year 2018-19, after several rounds of intimation and rectification, ultimately intimation under Section 143(1) of the Act rn'as issued by the Central Assessing Center, Bangalore on 17 .IO.2olg, assessing the taxable income of the petitioner at Rs.4,85,98,969.00. 11. Against such intimation, petitioner has preferred an appeal before the Commissioner of Income Tax (Appeals), Hyderabad 9 on 31.01.202A, which is stated to be pending. L2. In the light of the above, we are of the view that it would be more appropriate and meet the ends of justice if the appellate authorities are directed to hear and decide the respective appeals expeditiously instead of examining the challenge made by the petitioner' 13. Insofar the appeal of the petitioner for the Assessment Year 2015-16 is concerned, u-e request the Income Tax Appellate Tribunal, Hyderabad to decide l I.T.A.No.947 I Hyd I 20 19 expeditiousll'. UB,J & AVR,] wp_2651o,2o21 14. Simiiarly, 1n respect of the appeal for the Assessment Year 2018-19, Commissioner of Income Tax (Appeals), Hyderabad-9 sha11 expedite the hearing and decide the appeai expeditrously. appellate authorities within a period of four (04) months from the date of receipt of a copy of this order. 16\" This disposes of the writ petition. No order as to costs. 17. A,s a sequel, miscellaneous applications pending if airy in this Writ Fetition. shali stand closed. //TRUE COPY' The Principal Commissioner of lncome Tax, Hyderabad. The Commissioner of lncome Tax Appeals-lV, Hyderabad. The Commissioner lncome Tax Exemptions, Hyderabad. The lncome Tax Officer, Exemption Ward 1 (4), Hyderabad. One CC to SRI tt/.A.II/UJEEB, Advocate [OPUC] One CC to SRI K.RAJ REDDY, Advocate IOPUC] Two C.D. Copies. One Spare Copy. MRC MMA }N.\" 15. Let both the appeals be decided by the respective I SD/-B.SAryAVATHI ASSISTryNT REGISTRAR q) SECiION OFFICER To, 1. 2. 4. 5. o. 7. B. i HIGH COURT DATED:2110212O22 ORDER WP.No.26530 of 2021 DISPOSING OF THE WRIT PETITION WITHOUT COSTS a- 2 JuI 2i]22 ( 2 1I. . '1 )rt-/ b )/'t/ z. (') -b G --Y "