MYSORE PALACE BOARD vs THE CENTRAL BOARD OF DIRECT TAXES

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2019 BEFORE: THE HON’BLE MRS. JUSTICE S.SUJATHA WRIT PETITION No.40801/2019 (T – IT) BETWEEN:

MYSORE PALACE BOARD MYSORE PALACE PREMISES, SAYYAJI RAO ROAD, MYSORE-570001 PAN: AAAGM0484M REP HEREIN BY ITS EXECUTIVE OFFICER, Mr. ABHIRAM G. SANKAR AGE 31 YEARS

... PETITIONER

[BY SRI K.R.VASUDEVAN A/W SRI ANKUR PAI DHUNGAT, ADVS.]

AND:

1 . THE CENTRAL BOARD OF DIRECT TAXES REP BY ITS CHAIRMAN DEPARTMENT OF REVENUE NORTH BLOCK, NEW DELHI -110001

2 . THE UNION OF INDA THROUGH ITS SECRETARY DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA CENTRAL SECRETARIAT, NORTH BLOCK, NEW DELHI-110001

3 . THE INCOME TAX OFFICER WARD 2(2) , ROOM NO.210,

- 2 - 2ND FLOOR, AAYAKAR BHAVAN, NO.21/16, RESIDENCY ROAD, NAZARBAD, MYSORE-570010

4 . THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-2, AAYAKAR BHAVAN, NO.21/16, RESIDENCY ROAD, NAZARBAD, MYSORE-570010

…RESPONDENTS

[BY SRI JEEVAN J. NEERALGI, ADV.]

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF MANDAMUS TO R-1 DIRECTING TO EXTEND THE EXEMPTION UNDER SECTION 10(46) OF THE IT ACT WITH RETROSPECTIVE EFFECT FROM 01.06.2011.

THIS PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-

O R D E R

The petitioner claims to be a Board constituted under the Mysore Palace (Acquisition and Transfer) Act, 1998 (‘Palace Acquisition Act’ for short) with a view to acquire the Mysore Palace, including the buildings, temples and other places of religious worship, the Royal treasure including the royal Throne, Royal Crown, Howdah, Royal wears and Ornaments and all other pieces of Art, Regalia, Paintings, Sculptures from the erstwhile king of Mysore. The petitioner is governed by

- 3 - a Board of Trustees whose Chairman is the Chief Secretary of the Government of Karnataka and most Members are Government Officers in the rank of Secretary. The petitioner is under the direct supervision of the Deputy Commissioner of District, who is the executive head of the district. The administration of the petitioner is under the direct control and supervision of Senior Officers of the State Government.

The petitioner had submitted an application dated 30.11.2018 seeking Notification under Section 10(46) of the Income Tax Act, 1961 (‘Act’ for short), specifically requesting to notify for exemption of the petitioner – Board under Section 10(46) of the Act with retrospective effect from 01.06.2011. It is contended that Central Board of Direct Taxes (CBDT) has issued a Notification dated 09.04.2019 exercising the powers conferred by Section 10(46) of the Act, notifying the petitioner – Board, constituted by the Government of

- 4 - Karnataka, in respect of filing specified income arising to that Board namely, a) income from Palace or proceeds of any property vested in the Board; b) all fees and charges levied by the Board under the Mysore Palace (Acquisition and Transfer) Act, 1998 and forming part of the Board fund; c) rent received from the stalls let out to Government Agencies; and d) interest earned on (a) to (c) above. However, the said Notification has been made applicable relating to the assessment years 2019-20, 2020-21, 2021-22, 2022-23 and 2023-24.

Learned counsel for the petitioner would submit that the constitution and the nature of the income received from the Board being similar for the earlier periods, the Central Board of Direct Taxes having held that the petitioner – Board is entitled to the exemption under Section 10(46) of the Act ought not to have restricted the Notification only prospectively albeit the application made seeking such exemption with

- 5 - retrospective effect. Hence, seeks for a direction to respondent No.1 – CBDT to re-consider the representation of the petitioner dated 30.11.2018 at Annexure – J and extend the benefit of the Notification issued under Section 10(46) of Act retrospectively with effect from 01.06.2011.

Learned counsel for the revenue would submit that respondent No.1 on considering the request of the petitioner – Board has issued the Notification prospectively. As such, further consideration/re- consideration of the application dated 30.11.2018 submitted by the petitioner would not arise.

Having heard the learned counsel for the parties and perusing the material on record, this Court is of the considered opinion that there is no legal impediment for respondent No.1 – CBDT to consider/re- consider the application dated 30.11.2018 to extend the benefit of the Notification dated 09.04.2019

- 6 - retrospectively with effect from 01.06.2011 since the nature of the petitioner – Board remains the same even for the earlier years.

Hence, respondent No.1 is directed to re- consider the application dated 30.11.2018 (Annexure – J) submitted by the petitioner and take a decision in accordance with law by passing a speaking order inasmuch as extending the benefit of the Notification dated 09.04.2019 retrospectively with effect from 01.06.2011. Such compliance shall be made in an expedite manner, in any event, not later than eight weeks from the date of receipt of certified copy of the order.

Writ petition stands disposed of accordingly.

Sd/- JUDGE

PMR

MYSORE PALACE BOARD vs. THE CENTRAL BOARD OF DIRECT TAXES