SHANTHINIKETAN EDUCATIONAL AND CULTURAL SOCIETY, vs. THE COMMISSIONER OF INCOME TAX,

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WP(C)/26997/2022HC KeralaKLHC01057153202217 January 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there was no error of law or jurisdiction in the impugned orders passed under Section 148A of the IT Act. The Court noted that the petitioner had not been granted registration under Section 10(23C)(vi) of the IT Act to claim exemption from income tax, yet it had proceeded to claim such exemption. Consequently, the Court found no grounds to interfere with the impugned orders. Regarding the petitioner's argument about the delay in decision on its registration application, the Court observed that the writ petition was filed after an unexplained delay and laches. However, the petitioner was granted liberty to apply afresh under the appropriate provisions, which would be considered in accordance with the law. The writ petition was dismissed.

What were the facts?

The petitioner, Shantiniketan Educational and Cultural Society, a trust running a CBSE school, filed its income tax return for assessment year 2018-19 on 31.10.2018, declaring zero income after claiming an exemption of Rs. 1,37,57,883/- under Section 10(23C)(vi) of the IT Act. The return was invalidated on 23.07.2019 as defective. Similar issues arose for assessment years 2015-16 and 2016-17. The trust was not registered with the Principal Commissioner of Income Tax for claiming exemption under Section 10(23C)(vi). The petitioner had also filed returns for assessment years 2020-21 with false registration details. The impugned orders (Exts. P10, P13, and P16) were passed under Section 148A of the IT Act, indicating that income chargeable to tax had escaped assessment.

What were the issues?

1. Whether the impugned orders passed under Section 148A of the Income Tax Act, 1961, are legally sustainable, considering the petitioner's lack of registration for claiming exemption under Section 10(23C)(vi) of the IT Act? (Question of law and fact) Assessee's Contention: The petitioner argued that it had applied for registration in 2011, but no decision was taken, and the writ petition was filed in 2023, which should be considered for a writ of mandamus. The petitioner also implicitly argued that the exemption claim was valid. Revenue's Contention: The revenue contended that the petitioner was not registered under Section 10(23C)(vi) and had claimed exemption despite this lack of registration. The revenue also pointed out false registration details in the returns for assessment year 2020-21, suggesting escaped income.

Which sections of the Income-tax Act were involved?

Section 10(23C)(vi),Section 148A,Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 17TH DAY OF JANUARY 2024 / 27TH POUSHA, 1945 WP(C) NO. 26997 OF 2022 PETITIONER/S: SHANTHINIKETAN EDUCATIONAL AND CULTURAL SOCIETY, C-6, TAGORE NAGAR, VAZHUTHACAUD, THIRUVANANTHAPURAM , REPRESENTED BY ITS SECRETARY., PIN - 695014 BY ADV K.A.SALIL NARAYANAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX, AAYKAR BHAVAN, FIRST FLOOR, P.O. KOWDIAR, THIRUVANANTHAPURAM, PIN - 695003 2 COMMISSIONER OF INCOME TAX(EXEMPTIONS), CENTRAL REVENUE BUILDING, I.S.PRESS ROAD,KOCHI, PIN - 682031 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT OTHER PRESENT: CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.26997 of 2022 2 JUDGMENT Dated this the 17th day of January, 2024 The present writ petition has been filed impugning Exts. P10, P13 and P16 orders passed under Clause (d) of Section 148A of the Income Tax Act, 1961(hereinafter referred to as ‘IT Act’). The petitioner is a trust and runs an CBSE School in name of Santhiniketan Educational and Cultural Society. 2. The petitioner filed return of its income for the assessment year 2018-19 on 31.10.2018 declaring total income ‘zero’ after claiming exemption of Rs.1,37,57,883/- under Section 10(23C) (vi) of the IT Act,1961 and claimed depreciation of Rs.55,20,182/- on the fixed assets worth Rs.4,33,67,073/-. The said return was found defective and incomplete and hence invalidated on 23.07.2019. It was concluded that the petitioner had not furnished valid return of income for the assessment year 2018-19. The same was the position in respect of the assessment years 2015-16 and 2016-17. On verification of the assessment records, it was noticed that the trust was not registered with the Principle Commissioner of the Income Tax for claiming exemption WPC No.26997 of 2022 3 under Section 10(23C)(vi) of the IT Act. The petitioner made an application for registration. However, the same has been not granted till date. The petitioner had filed income tax return for the assessment years 2020-21, wrongly mentioning registration number and date which had been found to be false and incorrect. No such registration was granted to the trust for exemption. The exemption claimed by the petitioner under Section 10(23C)(vi) of the IT Act was not allowable to the trust. The orders impugned would suggest that the material and the evidence collected suggest that the income of the petitioner chargeable to tax had escaped assessment therefore, it was decided to issue notice under Section 148 of the IT Act. 3. This Court does not find any error of law or jurisdiction in these impugned orders. Considering the fact that the petitioner has not been registered till date for claiming exemption under Section 10(23C)(vi) of the IT Act from payment of the income tax on its income. Despite no registration having been granted, the petitioner had claimed exemption. In view thereof, I find no error in the impugned orders and therefore, the writ petition is dismissed. WPC No.26997 of 2022 4 4. Learned counsel for the petitioner submits that the petitioner had applied way back in 2011 seeking registration. However, no decision has been taken. The petitioner had made application in 2011, this writ petition has been filed in the year 2023 for a writ of mandamus. This writ petition is not maintainable for a writ of mandamus after such an unexplained delay and latches. However, the petitioner is free to apply afresh, and if it makes an application under the appropriate provisions, the same shall be considered, in accordance with the law. At this distant point of time, this Court does not find any ground to interfere or grant any indulgence for prayers made in the writ petition. Therefore, the writ petition is dismissed. Sd/- DINESH KUMAR SINGH JUDGE AP WPC No.26997 of 2022 5 APPENDIX OF WP(C) 26997/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE MEMORANDUM OF ASSOCIATION AND THE RULES AND REGULATIONS OF THE SOCIETY Exhibit P2 TRUE COPY OF THE APPLICATION Exhibit p3 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED Exhibit P4 TRUE COPY OF THE ACKNOWLEDGEMENT RECEIVED Exhibit P5 TRUE COPY OF THE COMMUNICATION Exhibit P6 THE PETITIONER ON 04-01-2020 AND 13-01-2020 FURNISHED ALL DETAILS ALONG WITH A COVERING LETTER Exhibit P7

Exhibit P8OF THE NOTICE ISSUED UNDER SEC. 148(A) (B) FOR THE A Y 2015 -16 Exhibit P9OF THE COMMUNICATION Exhibit P10OF THE ORDER Exhibit P11OF THE NOTICE Exhibit P12OF THE REPLY Exhibit P13OF THE ORDER Exhibit P14OF THE NOTICE Exhibit P15OF THE REPLY Exhibit P16OF THE ORDER

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