2018 (5) TMI 959 - HC - Income Tax

Recovery of house tax - Petitioner-institution being a charitable organization as exempted from payment of house tax - Held that - No substance in the submissions of the learned counsel for the petitioner nor the counsel for the petitioner produced any material to support his contention that only because of having the exemption from payment of income tax being the charitable trust under Section 12-A of the Income Tax, the petitioner is entitled to get the exemption from payment of house tax. The petitioner has failed to satisfy the query of the Court with regard to the assessment proceedings related to house tax of the properties of the petitioner-hospital. He has only placed the copy of the recovery notice issued by the Chief Assessment Officer, Nagar Nigam, Jhansi (Annexure-6) which clearly indicates that the annual assessment of the petitioner-hospital is of ₹ 71,94,950/- and the house tax is chargeable at the rate of 10% and there are dues to the tune of ₹ 1,07,92,425/- on which the interest is calculated to the tune of ₹ 12,95,091/-. The current year tax is assessed being 10% of the annual assessment of the property which comes to ₹ 7,19,495/- and the outstanding dues are shown to the tune of ₹ 1,15,11,920/-. The actual outstanding amount is calculated at ₹ 1,28,07,011/-. The Court has enquired from the counsel for the petitioner about the assessment of the property and the assessment orders. - Appeal dismissed.

Summary

Issues:
Recovery of house tax exemption for a charitable organization.

Analysis:
The petitioner, a charitable organization, challenged a demand notice for house tax. Previous writ petitions directed the competent authority to decide objections within three months. An interim order was to continue until objections were resolved. Another writ petition was dismissed earlier. The impugned order considered the hospital's activities, noting charges for general and private wards. The respondent concluded that, besides an exemption certificate under Section 12-A of the Income Tax Act, no other material justified house tax exemption. The petitioner's counsel failed to provide evidence supporting exemption based on income tax exemption. The recovery notice showed outstanding dues of ?1,28,07,011. The counsel could not provide assessment orders or satisfactory replies. Previous orders indicated pending objections against assessment orders.

The Court found no substance in the petitioner's submissions and dismissed the writ petition. The petitioner was advised to appeal if desired. The Court declined interference due to factual disputes best resolved by the relevant authority and appellate body.