COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI vs. NATIONAL SAFAI KARAMCHARIS FINANCE AND DEVELOPMENT CORPORATION

ITA-138/2021HC Delhi2021:DHC:264927 August 20213 pages

AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the assessee, a Section 25 Company wholly owned by the Government, used its funds exclusively for the benefit of the SC community in Delhi. This satisfied the conditions for exemption under Section 10(26B).

What were the facts?

The Commissioner of Income Tax appealed against an ITAT order allowing exemption under Section 10(26B) to the National Safai Karamcharis Finance and Development Corporation. The appellant argued the benefit was restricted to SC, ST, OBC, and the assessee's target group might not exclusively belong to these communities.

What were the issues?

Whether the assessee corporation, working for Safai Karamcharis, qualified for exemption under Section 10(26B) as its target group might not exclusively comprise SC, ST, or OBC members.

Which sections of the Income-tax Act were involved?

Section 10(26B)

AI-generated summary — verify with the full judgment below

ITA 138/2021

Page 1 of 3

$~24 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 138/2021

COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI ..... Appellant Through: Mr. Abhishek Maratha, Sr. Standing Counsel.

versus

NATIONAL SAFAI KARAMCHARIS FINANCE AND DEVELOPMENT CORPORATION

..... Respondent

Through: None.

Date of Decision: 27th August, 2021

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE NAVIN CHAWLA

J U D G M E N T

MANMOHAN, J: (Oral) 1. The hearing has been done by way of video conferencing. 2. Present appeal has been filed challenging the order dated 20th November, 2019 passed by the ITAT in ITA No 6907/Del/2018 for AY 2017-18. 3. Learned Counsel for the Appellant states that the ITAT erred in allowing the exemption under Section 10(26B) of the Income Tax Act, 1961 to the Assessee and in not appreciating that this benefit is specifically 2021:DHC:2649-DB

ITA 138/2021

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restricted to promotion of interest of members of SC, ST, OBC community only. He states that the target group of the assessee are ‘ Safai Karmacharis’, who may or may not belong to SC, ST or OBC community. 4. In our opinion, the Tribunal has given a categorical finding of fact that the respondent assessee, which is a Section 25 Company fully owned by the Government of India, uses its funds exclusively for the benefit of SC community who are inhabitants of Delhi. The relevant portion of the impugned order is reproduced herein below:- “7. We have gone through the record in the light of the submission on either side. The requirement of Section 10(26B) is that a Corporation established by a Central or State Act, wholly financed by the Government and working for the promotion of interest of the members of Schedule Castes or the Scheduled Tribes or other backward classes is entitled to claim the benefit of section 10(26B) and income shall not be included in total income. It is an admitted fact by both the authorities below held that the assessee is a Section 25 Company fully owned by the Government of India. As its names suggests the assessee has been engaged in the work of development of the National SafaiKaramcharis who are involved in the upliftment of SafaiKaramcharis & Manual Scavengers who belong to Scheduled Caste, Scheduled Tribe or Other Backward Classes and also in the inhumane practice of scavenging and other sanitation activities. SafaiKaramcharis& Manual Scavengers are the poorest of the poor in the society and it does not require any Certificate to know the said fact. Further, Section 10(26B) clearly says that the target group could be the members of the Schedule Castes or the Scheduled Tribes or other backward classes or any two or all of them. It, therefore, makes the things clear that if an entity is a corporation established by a Central or State Act is engaged in the upliftment of SC or ST or OBC or a mix of them is entitled to claim benefit u/s 10(26B). As we have observed above, it could be said that any category of members in the activity of Manual Scavengers or Safai work 2021:DHC:2649-DB

ITA 138/2021

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could fall in any of these three categories. Section 10(26B) contemplates not only the caste but also class.

Further, the letter dated 22.03.2000 clinches the issue wherein the state agency clearly stated that the finances from the assessee to the State agency was exclusively for the benefit of SC community inhabiting the Delhi area and possessing the Certificate to such an effect. It also stated therein that a general agreement was on this aspect between the assessee and state agency. These circumstances do not admit of any doubt as to the entitlement of the assessee to claim the benefit under section 10(26B) and with that view of the matter we find it difficult to agree with the view of the authorities below. We, therefore, set aside both the orders and direct the Learned Assessing Officer to allow the assessee to benefit of section 10(26B) of the Act.”

(Emphasis supplied)

Since the Tribunal which is the highest fact finding authority has given a categorical finding, which suffers from no perversity, this Court finds no reason to interfere. 6. Accordingly, the present appeal, being bereft of merit, is dismissed. 7. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

NAVIN CHAWLA, J AUGUST 27, 2021 AS 2021:DHC:2649-DB

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