1974 (9) TMI 47 - HC - Income Tax

Summary

Issues:
1. Exemption under section 10(23) of the Income-tax Act, 1961 for a sports trust.

Analysis:
The petitioner, a sports trust, sought exemption under section 10(23) of the Income-tax Act, 1961, to be notified by the Government of India. The trust was initially granted a certificate under section 88 of the Act by the Commissioner of Income-tax, which was later revoked. The Central Board of Direct Taxes rejected the petitioner's application for exemption under section 10(23), stating that the trust was not entitled to the exemption as it promoted various sports activities without confining itself to a specific sport. The petitioner challenged this decision through a writ petition seeking a mandamus to direct the Central Board of Direct Taxes to grant the exemption.

The High Court held that the authority to grant exemption under section 10(23) lies with the Central Government, not the Central Board of Direct Taxes. Referring to the case law of Carborundum Universal Ltd. v. Union of India, the court emphasized the distinction between the two authorities. As the Central Board of Direct Taxes does not have the power to decide on exemptions under section 10(23), the rejection order issued by them was deemed invalid. Consequently, the court dismissed the writ petition seeking a mandamus against the Central Board of Direct Taxes.

The court acknowledged that the Central Board of Direct Taxes could have forwarded the application to the appropriate authority for consideration, even though it was not mandatory. The petitioner was advised to pursue the matter directly with the Central Government, which has the jurisdiction to grant the exemption under section 10(23). The court highlighted the possibility for the Central Board of Direct Taxes to return the application to the petitioner for submission to the Central Government or to forward it themselves. The petitioner was granted the liberty to approach the Central Government for a review of the exemption application. The court concluded the judgment by dismissing the writ petition without imposing any costs on the petitioner.