2015 (7) TMI 537 - HC - Income Tax

Exemption under Section 10 (22) and under Section 10 (23C) - ITAT allowed claim - Held that - As decided in Assam State Text Book Production and Publication Corpn. Ltd., Vs. Commissioner of Income Tax, Guahati-I 2009 (10) TMI 60 - SUPREME COURT the High Court, in its impugned judgement, has not considered the historical background in which the Corporation came to be constituted; secondly, the High Court ought to have considered the source of funding, the share-holding pattern and aspects, such as Return on Investment; thirdly, it has not considered the letters issued by C.B.D.T. which are referred to in the judgement of the Rajasthan High Court granting benefit of exemption to various Board/Societies in the country under Section 10(22) of the Act; fourthly, it has failed to consider the judgements mentioned hereinabove; and lastly, it has failed to consider the letter of the Central Government dated 9th July, 1973, to the effect that all State-controlled Educational Committee(s)/Board(s) have been constituted to implement the Educational policy of the State(s), consequently, they should be treated as Educational Institution. Although the substantial questions of law need not be answered but the operative arrangement as directed by the Supreme Court may have to be adopted even in these appeals of remanding the matter to the Assessing Officer for denovo consideration in the light of the decision of the Supreme Court and the decisions of the Rajasthan High Court and Orrisa High Court referred to therein, which have been affirmed by the Supreme Court. - Decided in favour of revenue for statistical purposes.

Summary

Issues:
Department's appeal regarding exemption under Section 10 (22) and 10 (23C) for multiple assessment years.

Analysis:
The appeals were filed by the Department against a common decision of the Income Tax Appellate Tribunal regarding a single assessee for twenty-two separate assessment years. The respondent claimed exemption under Section 10 (22) for certain years and under Section 10 (23C) for others. The Assessing Officer believed the respondent had received one-time financial assistance, a finding upheld by the first Appellate Authority. However, the Tribunal disagreed, stating the assessee received continuous financial assistance from the State. The Department raised substantial questions of law related to the eligibility of exemption under Section 10(23-C) and the jurisdiction of the ITAT in allowing relief. The High Court, after considering the Supreme Court's decision in a similar case, concluded that the questions had already been answered by the Supreme Court. As no contrary decision was presented by the department, the High Court decided to remand the matter to the Assessing Officer for reconsideration in line with the Supreme Court's decision and other relevant judgments. The appeals were allowed to this limited extent.

The respondent's counsel agreed to the remand and requested the appeals be disposed of, leaving all questions open for fresh consideration by the authorities based on the Supreme Court's decision and other relevant judgments. Consequently, the appeals were allowed on the mentioned terms, with no costs imposed.