Punjab-Haryana High Court
Sigma Health Training Institute ... vs Central Board Of Direct Taxes And Others on 17 September, 2012
Bench: Ajay Kumar Mittal, Rakesh Kumar Garg
CWP No.1391 of 2012 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
CWP No.1391 of 2012 (O&M)
Date of decision:17.9.2012
Sigma Health training Institute (Regd.) Society, 71, New Grain Market,
Gill Road, Ludhiana (Punjab) through its President Shri Chander
Bhanot
...Petitioner
Versus
Central Board of Direct Taxes and others
...Respondents
CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE RAKESH KUMAR GARG
Present: Mr. Pankaj Jain, Advocate for the petitioner.
Ms. Savita Saxena, Advocate for the revenue.
Ajay Kumar Mittal,J.
CM No.8554 of 2012
1. Rejoinder to the written statement is taken on record. Civil Miscellaneous application stands disposed of.
CWP No.1391 of 2012
2. The petitioner claims that it is a charitable institution and is entitled for benefit under Section 10(23C) (iiiad) of the Income Tax Act, 1961 (in short, "the Act"). Through the present petition filed under Articles 226/227 of the Constitution of India, the petitioner has impugned Annexures P.8 and P.10 dated 13.9.2011 and 3.11.2011 respectively whereby the respondent-Chief Commissioner has declined exemption to the petitioner.
3. Briefly, the facts as narrated in the petition may be noticed. The petitioner is a registered society under the societies Registration Act, 1860. It is engaged in imparting education in nursing courses in and around CWP No.1391 of 2012 2 the State of Punjab. The petitioner is imparting courses of ANM (Auxiliary Nurse and Midwifery), GNM (General Nursing and Midwifery), B.Sc. Nursing, B.Sc. Nursing Post Basic, Msc Nursing courses to the aforesaid students and the fee structure charged from these students is in accordance with the rates approved by the Government of Punjab and Indian Nursing Council, Delhi. On 27.9.2010, Annexure P.2, application in Form No.56D supported with documents praying for grant of exemption for the period from 31.3.2010 to 31.3.2013 under Section 10(23C) (iiiad) of the Act was made. On 11.8.2011, Annexure P.5, notice was issued to the petitioner requiring it to produce the books of account for the period financial years 2009-10 to 2011-12. The petitioner requested for an adjournment on the ground that its President and Accountant were away to Faridkot for counselling of the students. The case was fixed on 2.9.2011 and finally on 13.9.2011, Annexure P.8 order for rejection of the application for exemption was passed. Aggrieved by the order, the petitioner vide application dated 29.10.2011, Annexure P.9 prayed for review of the order. The said application was also rejected vide order dated 3.11.2011, Annexure P.10. Hence the present petition.
4. Learned counsel for the petitioner submitted that the Chief Commissioner of Income Tax, respondent No.3 had declined grant of exemption as is discernible from perusal of order dated 13.9.2011, Annexure P.8 that the assessee was required to explain regarding the utilization of surplus funds for the assessment years 2006-07 to 2010-11 and whether it was applying its profits wholly and exclusively for the objects for which it was established. According to the learned counsel, respondent No.3 had recorded that the assessee had not given any details with regard to the aforesaid information which could have been examined CWP No.1391 of 2012 3 by respondent No.3 while adjudicating the application for exemption filed by it. He referred to Annexure P.9 application which was submitted by the petitioner to the Chief Commissioner of Income Tax on 29.10.2011 wherein in para 2, it has been stated as under:-
"Petition on form No.56D, along with paper book containing 736 pages, was submitted to your good self, seeking exemption/approval under section 10(23C)(VI). In response to learned AO's queries, detailed replies containing full information were submitted, vide reply dated 25.4.2011 containing 11 paras and reply dated 5.8.2011 containing 9 paras. The counsel for the assessee duly attended before the learned AO on all the dates of hearing including the last date 24.8.2011. Audited account statements and balance sheets for earlier years and the year under consideration, and all other details were duly submitted on record. The learned AO never found any discrepancy, nor she has made any local enquiries by visiting the institution which is reputed and well know in Punjab. There is no violation of any object nor there any commercial activity. The petitioner therefore awaited fair justice. However, we are shocked to find now that the learned AO did not recommend the exemption. We have also been deprived of any hearing before Hon'ble CIT II who has forwarded the report in question."
5. On the aforesaid premises, it was submitted that the accounts and the balance sheets for the earlier years and the year under consideration were produced before the Assessing officer. The report which was furnished by the Assessing Officer stating that no such material had been produced was wrong. On the other hand, learned counsel for the revenue supported the order passed by the department.
6. Learned counsel for the assessee submitted that even if what has been recorded by respondent No.3 in the order, the petitioner is now prepared to produce the relevant record once again before him for deciding CWP No.1391 of 2012 4 the application for exemption afresh in case an opportunity is provided to it.
7. After hearing learned counsel for the parties and perusing the record, in the interest of justice, we consider it appropriate to remand the matter to respondent No.3 to adjudicate the same after affording an opportunity to the petitioner to produce the books of account including balance sheets and it shall be open for respondent No.3 to pass a fresh order after examining the relevant record so produced by the petitioner in accordance with law. Ordered accordingly. As a consequence, the petition is allowed and the impugned orders dated 13.9.2011 and 3.11.2011, Annexures P.8 and P.10 respectively are set aside.
(Ajay Kumar Mittal)
Judge
September 17, 2012 ( Rakesh Kumar Garg)
'gs' Judge