2019 (4) TMI 1136 - HC - Income Tax

Exemption u/s 80G - petitioner society is liable to pay only 35% of the demanded amount for sanction of the map - HELD THAT - We find from the perusal of the record that the petitioners, who are a running charitable institution/ dental college, have already obtained certificate of exemption under section 80G. The Government order dated 2.4.2019 clarifies the earlier Government Order dated 18.7.2016 and states that the tax benefit is only admissible to the charitable societies who have obtained certificate under section 80G of the Act. The orders impugned in the present writ petition are prior to the Government Order dated 2.4.2019. We, therefore, set aside the impugned orders dated 26.2.2019 (Annexure 18 to the writ petition and 23.3.2019 (Annexure 19 to the writ petition) and remit the matter to the Vice Chairman, Ghaziabad Development Authority, Ghaziabad, respondent no.4 to re-examine the matter in the light of the Government Orders dated 18.7.2016 and 2.4.2019 expeditiously, preferably within a period of three months from the date of receipt of a certified copy of this order.

Summary

Issues:
Challenge to demand of compounding fees, development charges, plan fees, legal fees, and inspection charges for map sanction based on charitable status and tax exemption certificate under section 80G of the Income Tax Act, 1961.

Analysis:
The petitioners, a charitable society running a dental college, challenged the orders demanding various fees for map sanction. They contended that being a charitable institution with a tax exemption certificate under section 80G of the Income Tax Act, they were entitled to pay only 35% of the demanded amount as per a Government Order dated 18.7.2016. Subsequently, another Government Order dated 2.4.2019 clarified this position, stating that educational and medical charitable institutions with the tax exemption certificate were required to pay only 35% of the charges for map sanction. The petitioners argued that the impugned orders were invalid in light of these government orders.

The court noted that the petitioners had indeed obtained the tax exemption certificate under section 80G of the Income Tax Act. It observed that the Government Order dated 2.4.2019 specified that tax benefits were applicable only to charitable societies with such certificates. Importantly, the impugned orders were issued before the clarification provided in the Government Order dated 2.4.2019.

Consequently, the court set aside the orders dated 26.2.2019 and 23.3.2019 demanding fees for map sanction. The matter was remitted to the Vice Chairman of the Ghaziabad Development Authority to review it in light of the Government Orders dated 18.7.2016 and 2.4.2019 promptly, preferably within three months from the receipt of the court's order. The writ petition was disposed of with these directions.