2017 (9) TMI 836 - HC - Income Tax

Grant of exemption/according recognition - date on which the Himachal Pradesh Road Transport Corporation General Provident Fund Trust, came to be created vide Trust Deed - Held that - The efficacy of such recognition under the Act, 1952, was till the formation of the Trust which was as of 01.04.1998. It is not that at no point in time, recognition either under the provisions of the Act, 1952 or Income Tax Act, 1961 was accorded to the petitioner. At this point in time, it be also observed that the Mandi Kullu Road Transport Corporation and the Himachal Government Transport were amalgamated with the formation of a new body known as Himachal Road Transport Corporation w.e.f. 01.10.1974. From the order dated 25.06.2008, so passed by the Central Board of Direct Taxes, we find that there is no discussion or finding on these aspects and all this despite petitioner having urged the same in the grounds of appeal. As such, on this short ground alone, without adjudicating the petition on merits, more specifically, applicability of Rule(s) 77/78 of the Income Tax Rules, 1962, we dispose of the present petition with a direction to the Central Board of Direct Taxes to take a fresh decision pertaining to the period 01.04.1998 till 30.10.2002. Parties to appear before the Board on 17.10.2017. Decision be taken within a period of three months thereafter.

Summary

Issues Involved:
1. Failure to consider petitioner's ground for grant of exemption/recognition by the appropriate Authority.
2. Recognition of the Trust under the Employees Provident Fund and MPF Act, 1952.
3. Lack of discussion or findings on crucial aspects in the order passed by the Central Board of Direct Taxes.

Analysis:
1. The petitioner was aggrieved by the fact that the Central Board of Direct Taxes did not consider the petitioner's ground for grant of exemption/recognition starting from 01.04.1998 when the Himachal Pradesh Road Transport Corporation General Provident Fund Trust was established. Despite the petitioner raising this issue, the appropriate Authority did not address it, even though recognition to the Trust was granted from 31.10.2002 onwards.

2. Before the formation of the Trust in 1998, the predecessor of the petitioner had already received recognition under the Employees Provident Fund Act, 1952. A communication dated 19.10.1973 from the Department of Income Tax confirmed the recognition of the provident fund of the Mandi Kullu Road Transport Corporation under the said Act. The Trust was formed on 01.04.1998, following the amalgamation of Mandi Kullu Road Transport Corporation and Himachal Government Transport into the Himachal Road Transport Corporation in 1974.

3. The Court noted that the order passed by the Central Board of Direct Taxes in 2008 did not address the crucial aspects raised by the petitioner, despite these issues being highlighted in the grounds of appeal. Therefore, the Court directed the Central Board of Direct Taxes to reevaluate the matter for the period between 01.04.1998 and 30.10.2002, without delving into the merits of the case or the applicability of specific Income Tax Rules. The parties were instructed to appear before the Board for a fresh decision by a specified date, with a three-month timeline given for the decision to be made, and any pending applications were disposed of accordingly.