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2015 (8) TMI 717 - HC - Income TaxExemption under Section 10 (23C)(vi) denied - whether we remit the matter to the CBDT once again for it to decide the question of approval or on the basis of available material, we direct the CBDT to grant the approval? - Held that - In Digember Jain Society (2009 (10) TMI 61 - DELHI HIGH COURT) this court had in fact issued a mandamus directing the revenue to grant exemption to the petitioner therein under Section 10(23C)(vi) of the said Act. The court, while doing so, also directed that the concerned authority would be free to incorporate stipulations and conditions in terms of the third proviso. We find that it is an admitted fact in the present case that the petitioner exists solely for educational purposes and not for the purposes of profit. These are the only requirements for grant of approval and, therefore, in the same manner as in the case of Digember Jain Society (2009 (10) TMI 61 - DELHI HIGH COURT) we issue a writ of mandamus directing the respondents to grant approval to the petitioner under Section 10(23C)(vi) of the said Act for the Assessment years 1999-2000 to 2001-02. However, we are making it clear that as the assessments for the three years in question are open, the Assessing Officer can certainly go into the question as to whether the conditions stipulated in the third proviso and the 13th proviso to Section 10(23C)(vi) of the said Act have been met and appropriate orders can been passed by the Assessing Officer in accordance with law.
Issues:
1. Rejection of application for exemption under Section 10(23C)(vi) of the Income-tax Act, 1961. 2. Influence of assessment orders on CBDT's decision. 3. Failure of CBDT to follow directions of the court. 4. Interpretation of the Supreme Court decision in American Hotel and Lodging Association case. 5. Consideration of third proviso conditions for grant of approval. Analysis: 1. The case involved a writ petition against the rejection of an application for exemption under Section 10(23C)(vi) of the Income-tax Act, 1961 for assessment years 1999-2000, 2000-01, and 2001-02 by the Central Board of Direct Taxes (CBDT). 2. The CBDT's decision was influenced by the findings of the Assessing Officer in the assessment orders, which had been set aside by the Income Tax Appellate Tribunal. The court found that the CBDT did not adhere to the directions given by the court and the Bombay High Court, leading to the rejection of the impugned order. 3. The CBDT failed to follow the court's directions and the Supreme Court decision in the American Hotel and Lodging Association case. The court noted discrepancies in the CBDT's interpretation of the Supreme Court decision, leading to a lack of compliance with legal principles and procedures. 4. The court emphasized the importance of considering the third proviso conditions for the grant of approval under Section 10(23C)(vi). It clarified that the Assessing Officer could examine whether the conditions stipulated in the third proviso and the 13th proviso to Section 10(23C)(vi) had been met for the assessment years in question. 5. Ultimately, the court issued a writ of mandamus directing the respondents to grant approval to the petitioner under Section 10(23C)(vi) for the relevant assessment years. It allowed the writ petition, specifying that the Assessing Officer could review compliance with the third proviso conditions and make appropriate orders in accordance with the law.
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