COMMISSIONER OF INCOME TAX-II CHANDIGARH vs. PROFESSIONAL GOLF TOUR OF INDIA # 1180 PH-V MOHALI

Facts

The assessee, Professional Golf Tour of India (PGTI), Chandigarh, applied for registration under Section 12AA of the Income Tax Act, 1961, on 18.07.2007. This application was denied by the Commissioner of Income Tax on 04.11.2007. The matter reached the Income Tax Appellate Tribunal (ITAT), which passed an order on 18.04.2013. Subsequently, PGTI, Chandigarh, was amalgamated with PGTI, New Delhi, effective from 01.04.2010. It was also stated that PGTI, Chandigarh, never claimed any exemption under Section 11 of the Act, and the Chandigarh Society Act was also not claimed. The appeal was filed before the High Court challenging the ITAT's order.

Held

The High Court held that the appeal had become infructuous and otiose. This was based on two primary reasons: firstly, the amalgamation of PGTI, Chandigarh, with PGTI, New Delhi, effective from 01.04.2010, which rendered the existence of PGTI, Chandigarh, as a separate entity for the purpose of the appeal moot. Secondly, the court noted that PGTI, Chandigarh, had never claimed any exemption under Section 11 of the Income Tax Act, 1961, and had also not claimed benefits under the Chandigarh Society Act. Given these circumstances, the court concluded that adjudicating the appeal would serve no purpose. The ratio decidendi is that an appeal challenging an order concerning an entity that has subsequently ceased to exist due to amalgamation, and which never sought the benefit of the provisions it was seeking registration for, becomes infructuous. The operative direction was to dismiss the appeal as having become infructuous.

Key Issues

1. Whether the appeal filed before the High Court has become infructuous and otiose in light of the subsequent events, specifically the amalgamation of PGTI, Chandigarh, with PGTI, New Delhi, and the fact that PGTI, Chandigarh, never claimed exemption under Section 11 of the Income Tax Act, 1961. Assessee's contentions: The respondent (PGTI, Chandigarh) argued that the appeal has become infructuous and otiose due to the amalgamation of PGTI, Chandigarh, with PGTI, New Delhi, effective 01.04.2010. They also pointed out that PGTI, Chandigarh, never claimed exemption under Section 11 of the Act and that the Chandigarh Society Act was not claimed. Therefore, no purpose would be served in adjudicating the appeal. Revenue's contentions: The appellant (Commissioner of Income Tax) did not record any specific contentions against the respondent's submission that the appeal has become infructuous.