SRI.TARALABALUMJAGADGURU EDUCATION SOCIETY vs. THE CHIEF COMMISSIONER OF INCOME TAX

WP No.64630/2009 : 1 : IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE 25TH DAY OF SEPTEMBER 2012 BEFORE THE HON’BLE MR.JUSTICE H.G.RAMESH Writ Petition No.64630/2009 (T-IT) Between: Sri.Taralabalu Jagadguru Education Society, Sirigere, Chitradurga-577541, (Represented by Its Chief Executive Officer, Sri K.Kenchappa, aged about 64 Years, Son of Sri Ramappa) …Petitioner (By Sri. Chythanya K.K. Advocate) A n d : The Chief Commissioner of Income Tax, Central Revenue Building, Navanagar, Hubli-580025. …Respondent (By Sri. Y.V.Raviraj, Sri. M.V.Sheshachala and Sri Jeevan J.Neeralgi, Advocates) This petition is filed under Articles 226 & 227 of the Constitution of India praying to quash the impugned order issued under Section 10(23C)(vi) issued by the respondent to the petitioner dated 19.06.2009 enclosed in Ann-A and direct the respondent to grant approval under Sec 10(23C)(vi) of the Income Tax Act, 1961 and etc. This petition coming on for preliminary hearing in ‘B’ group this day, the Court made the following:

WP No.64630/2009 : 2 : ORDER H.G.RAMESH, J. (Oral): This writ petition is directed against the order dated 19.06.2009 (Annexure-A) passed by the Chief Commissioner of Income Tax, Hubli, rejecting the application of the petitioner dated 25.01.2008 made under Section 10(23C)(vi) of the Income Tax Act, 1961 (‘the Act’ for short). 2. I have heard the learned counsel appearing for the petitioner and the learned counsel for the respondent and perused the impugned order. The sole contention urged by the learned counsel for the petitioner is that the Chief Commissioner had erred in law in rejecting the application made for grant of approval under Section 10(23C)(vi) of the Act on the ground that there is violation of the 3rd proviso (5th proviso) to Section 10(23C) of the Act. Learned counsel for the petitioner submits that even assuming that the

WP No.64630/2009 : 3 : petitioner had violated the 5th proviso, it cannot come in the way of the petitioner getting the approval under Section 10(23C)(vi) of the Act; the maximum that can happen is that the benefit of exemption under Section 10(23C)(vi) of the Act cannot be extended in relation to the funds referred to in the 5th proviso. 3. I find substance in the contention of the learned counsel for the petitioner. Mere non- compliance of the 5th proviso, by itself, will not disentitle the petitioner from getting the approval as contemplated under Section 10(23C)(vi) of the Act. The Chief Commissioner has not considered the matter in the right legal perspective. The matter requires to be reconsidered by the Chief Commissioner in accordance with law. Hence, I make the following order: The impugned order dated 19.06.2009 (Annexure-A) is set aside. The matter is remitted to

WP No.64630/2009 : 4 : the Chief Commissioner of Income Tax, Hubli, for reconsideration in accordance with law. All contentions of both the parties are kept open. Petition allowed. SD/- JUDGE Kms