HARYANA STATE POLLUTION CONTROL BOARD vs. DEPUTY COMMISSIONER OF INCOME TAX, PANCHKULA CIRCLE, PANCHKULA

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ITA/402/2015HC Punjab & HaryanaPHHC01110054201525 July 2016Bench: MR. JUSTICE M.M. AGGARWAL,MR. JUSTICE AVNEESH JHINGAN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Tribunal's order was not an absolute dismissal, as it had expressly directed the Assessing Officer to consider the matter afresh if the appellant obtained approval under Section 10(23C). The Court noted that the appellant had indeed obtained exemption under Section 10(23C)(iv) with retrospective effect for the assessment years 2006-2007 to 2011-2012. Given this subsequent development and the Tribunal's observation, the High Court deemed it unnecessary to remand the matter to the Tribunal. Instead, the Court directed the Assessing Officer to consider the appellant's assessment for the relevant years in light of the exemption granted under Section 10(23C). The appeals were disposed of accordingly, with the operative direction to the Assessing Officer.

What were the facts?

The appellant, Haryana State Pollution Control Board, Panchkula, filed appeals before the High Court of Punjab and Haryana at Chandigarh against the order of the Income Tax Appellate Tribunal (Tribunal) dated 28.04.2015. The appeals pertained to assessment years 2006-2007 to 2011-2012. The Tribunal had dismissed the appellant's appeals. The appellant had not obtained registration under Section 12A or approval under Section 10(23C)(iv) of the Income Tax Act, 1961, at the time of the Tribunal's order. However, the appellant subsequently obtained exemption under Section 10(23C)(iv) with retrospective effect for the assessment years in question.

What were the issues?

1. Whether, on the facts and circumstances of the case, the charges received by the appellant Board can be deemed to be income and thus chargeable to tax? (Question of law) 2. Whether, on the facts and circumstances of the case, the learned Tribunal was justified in dismissing the appeal of the appellant without awaiting the outcome of the application moved under Section 10(23C)(iv)? (Question of mixed law and fact) Assessee's contentions: The assessee argued that the Tribunal's dismissal was not absolute, as it had directed the Assessing Officer to consider the matter in light of any approval obtained under Section 10(23C). The assessee further submitted that they subsequently obtained exemption under Section 10(23C)(iv) with retrospective effect, covering the assessment years under dispute. Revenue's contentions: The judgment does not record specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 10(23C),Section 12A,Section 12AA

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITAs-402, 412, 413, 422, 464 & 468-2015 (O&M) Date of decision:- 25.07.2016 Haryana State Pollution Control Board, Panchkula ...Appellant Versus Deputy Commissioner of Income Tax, Panchkula ...Respondent CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE DEEPAK SIBAL Present:- Mr. Sandeep Goyal, Advocate, for the appellant. Mr. Denesh Goyal, Advocate, for the respondent. * * * * S.J. VAZIFDAR, A.C.J. (ORAL) Liberty to amend the appeals by annexing the complete copy of the impugned order of the Tribunal dated 28.04.2015 as Annexure A-5/1. Needless to add that the same shall be done without removing the existing Annexure A-5. The appeals are against the order of the Tribunal dismissing the appellant’s appeals. The appeals pertain to the assessment years 2006-2007 to 2011-2012. 2. The appeals are admitted on the following substantial -questions of law raised in paragraph 3:- “(i) Whether on the facts and circumstances of the case, the charges received by the appellant Board can be deemed to be income and thus chargeable to tax? (ii) Whether on the facts and circumstances of the case, the Ld. Tribunal was justified in dismissing AMODH SHARMA 2016.07.28 14:48 I attest to the accuracy and authenticity of this document chandigarh

ITAs-402, 412, 413, 422, 464 & 468-2015 (O&M) 2 the appeal of the appellant without awaiting for outcome of result of application moved u/s 10(23)(c)(iv)?” 3. The Tribunal in paragraph 11 observed that at the time of considering the application for registration under Section 12 AA, the concerned authority is required to examine only the aims and objects of a particular institution and if the same are found to be charitable in nature the registration should be granted. It was further observed that the other issues such as non audit of accounts, non application of 85% of the funds for charitable purposes can be examined only at the time of assessment when the exemption is granted under Sections 11 and 12 of the Act. What the Tribunal obviously meant was that the other issues would be examined if the exemption is granted. It is important to note that the Tribunal further observed that in these cases the Commissioner had not recorded any findings as to how the objects of the assessee are not charitable. Lastly, it is directed that in the event of the appellant obtaining the approval under Section 10(23C), the Assessing Officer should consider the matter in the light of such approval. This is followed by the operative part of the order dismissing the appellant’s appeals. 4. In our view, it was not a simplicitor or an absolute order of dismissal. The Tribunal proceeded on the basis that the appellant had not obtained registration under Section 12A or under Section 10(23C)(iv). The order, however, expressly holds that the CIT (Appeals) had rightly declined the exemption under Section 12A. It is important to note that the Tribunal held that if the assessee is able to obtain approval under Section 10(23C), then the Assessing Officer should consider the matter in the light of such approval. The operative part of the order of the Tribunal in paragraph 19, however, dismisses the AMODH SHARMA 2016.07.28 14:48 I attest to the accuracy and authenticity of this document chandigarh

ITAs-402, 412, 413, 422, 464 & 468-2015 (O&M) 3 appellant’s appeals. In view of what was observed in the earlier paragraph, we hold that the dismissal was not absolute. As aforesaid, the Tribunal had directed the Assessing Officer to consider the matter afresh in the event of the appellant obtaining approval even under Section 10(23C). 5. After the order of the Tribunal, the appellant obtained the exemption under Section 10(23C)(iv) by an order dated 01.03.2016. The application for the same was, however, made on 28.01.2013. The approval it is agreed has been granted with retrospective effect for the assessment years 2006-2007 to 2014-2015. This covers the period in question, namely, the assessment years 2006-2007 to 2011-2012. In these circumstances, it is not necessary for the appellant to challenge the order in so far as Section 12AA is concerned. 6. In view of the observations in the order of the Tribunal to the effect that in the event of the appellant obtaining approval under Section 10(23C), the Assessing Officer should consider the matter in the light of such approval, it is not necessary to remand the matter to the Tribunal. The proper course would be to remand the matter to the Assessing Officer. 7. The appeals are, therefore, disposed of by directing the Assessing Officer to consider the matter regarding the appellant’s assessment for the years 2006-2007 to 2011-2012 in the light of the exemption granted under Section 10(23C). (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (DEEPAK SIBAL) JUDGE 25.07.2016 Amodh Whether speaking/reasoned Yes/No Whether reportable Yes/No AMODH SHARMA 2016.07.28 14:48 I attest to the accuracy and authenticity of this document chandigarh

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