ASHOKA UNIVERSITY vs. ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH AND OTHERS

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CWP/2857/2022HC Punjab & HaryanaPHHC01013799202224 February 2022Bench: MR. JUSTICE AJAY TEWARI,MR. JUSTICE PANKAJ JAIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the plea that all facets brought forward by the petitioner and all material put forward should have been considered while deciding the objection were well-merited. The Court found that the rejection of objections was mechanical and did not adequately consider the petitioner's submissions. The Court set aside the impugned orders and directed the respondent No.1 (Assistant Commissioner of Income Tax) to re-decide the objections filed by the petitioner. This re-decision must include consideration of all points raised by the petitioner. The Court also directed parties to appear before the respondent on March 2, 2022, and ordered the decision to be made on or before March 31, 2022. Proceedings on the notice for income escaping assessment were stayed until then. The Court noted that the nature of the order it proposed to pass would not be an infraction of the law laid down by the Supreme Court regarding the maintainability of writ petitions.

What were the facts?

The petitioner, Ashoka University, is challenging the rejection of its objections to a notice for income escaping assessment. The university is set up by the International Foundation for Research and Education (IFRE), a special purpose vehicle established by philanthropists. IFRE manages all university expenditures and receives all university income. IFRE has been assessed, but the university received notices for income escaping assessment, and its objections were rejected mechanically. The revenue's reasoning was that the university's assessment is separate from IFRE's, and the university had not filed returns. The petitioner argued that IFRE's assessment would demonstrate no income escaped assessment, and the revenue failed to consider the material provided.

What were the issues?

1. Whether the objections filed by the petitioner-university against the notice for income escaping assessment were rejected mechanically, without considering the material placed on record, including the assessment of the Foundation (IFRE)? (Mixed question of law and fact) Assessee's Contention: The petitioner argued that the respondent authorities rejected its objections in a mechanical manner. They contended that IFRE's assessment, which was placed on record, would have shown that no income generated by the university had escaped assessment. They relied on the principle that all facets and material presented by the assessee should be considered. Revenue's Contention: The revenue argued that the assessment of the Foundation (IFRE) is irrelevant to the university's assessment as an individual entity. They also stated that the university had never filed its returns. The revenue's counsel initially stated they did not have a copy of the petition and that a writ petition was not maintainable in such circumstances.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 116 CWP-2857-2022(O&M) Decided on :24.02.2022 Ashoka University ....Petitioner VS Assistant Commissioner of Income Tax and others ....Respondents CORAM: HON'BLE MR. JUSTICE AJAY TEWARI

HON'BLE MR. JUSTICE PANKAJ JAIN Present: Mr. Puneet Bali, Senior Advocate with Mr. Surjeet Bhadu, Advocate for the petitioner. **** AJAY TEWARI, J.(Oral) CM-2452-CWP-2022 1. This application has been filed for placing on record certain documents mentioned in the application. 2. For the reasons recorded in the application, the same is allowed and documents are taken on record. Main case 3. By this petition the petitioner has challenged the rejection of its objections to a notice for income escaping assessment. 4. The case of the petitioner is that it is a university set up by an entity calling International Foundation for Research and Education (for short 'IFRE'). As per the petitioner, this Foundation is a special purpose vehicle which was established by a group of philanthropic persons to set up this university. The Foundation has no independent income, but the arrangement is that the Foundation takes care of all the expenditure of the university and all the income which the university generates is also credited to the account of the Foundation. ANURADHA 2022.02.25 13:46 I attest to the accuracy and integrity of this document

CWP-2857-2022(O&M) -2- 5. That Foundation has filed its returns and has been assessed. However, despite this fact, the petitioner-university has been issued the notices and the objections have been rejected in a very mechanical manner by merely observing that the assessment of the Foundation is of no relevance and the income and expenditure of the university as an individual entity has to be seen. Moreover, the reason taken is that the University has never filed its returns. Learned Senior Counsel appearing for the petitioner states that the petitioner is only desirous of showing that no income which it has generated has escaped assessment and for that purpose, had placed on record the entire assessment of the Foundation and if the respondent had just cared to examine the assessment record of the Foundation, this fact would have been cleared. In our opinion, the plea that all the facets brought forward by the petitioner and all the material put forward should have been considered while deciding the objection are well-merited. 6. Notice of motion. 7. Mr. Denesh Goyal, Senior Standing Counsel appears and accepts notice on behalf of the respondents. 8. Learned Senior Standing Counsel for the respondents states that he does not even have a copy of the petition and moreover, it is trite law that a writ petition would not be maintainable in such circumstances. In our opinion, the nature of order that we propose to pass would not be an infraction of the law laid down by the Supreme Court. We have considered the issue and set aside the impugned orders (Annexures P-5 to P-8) with a direction to the respondent No.1 to redecide the objections ANURADHA 2022.02.25 13:46 I attest to the accuracy and integrity of this document

CWP-2857-2022(O&M) -3- filed by the petitioner after considering all the points raised therein. 9. For this purpose, parties through counsel are directed to appear before respondent No.1 on 2.3.2022 and on any other date when he requires their presence. He is directed to decide the issue on or before 31.03.2022 and till then the further proceedings on the notice shall remain stayed. 10. Petition stands disposed of with above-said observations. 11. Since the main case has been decided, the pending civil miscellaneous application, if any, also stands disposed of. (AJAY TEWARI)

JUDGE (PANKAJ JAIN) JUDGE 24.02.2022 anuradha Whether speaking/reasoned - Yes Whether reportable - No ANURADHA 2022.02.25 13:46 I attest to the accuracy and integrity of this document

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