High Court of Delhi was dealing with the petition filed raising a common question of law, namely, as to whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was correct in allowing the appeal of the assessee ignoring the fact that the assessee has paid most of the scholarship amount to the students of a particular religious community which is a clear violation of Section 13(1)(b) of the Income Tax Act, 1961.
Appellant’s Contention:
Learned counsel for the appellant submitted that the Tribunal, while passing the impugned order, overlooked the fact that the Assessing Officer had found that the Respondent had given merit-cum-scholarship/financial assistance to candidates predominantly belonging to a particular religious community which is violative of Section 13(1)(b) of the Act. It was submitted that the advertisement for educational scholarship was published by the assessee in Urdu language and, that too, in one newspaper only. According to the counsel, this clearly indicates that the assessee wanted to restrict the circulation of the scholarship advertisement as its intent was to provide benefit to a particular religious community only.
HC’s Observations:
After hearing both the sides Court stated that both, the Commissioner Income Tax (Appeal) and Tribunal, have given a concurrent finding of fact that the benefit of scholarship to the poor and needy students was not confined to students of a particular community and a perusal of the list submitted by the assessee showed that the benefit had been granted to students from all communities without any discrimination.
HC stated that “just because advertisement was published in Urdu language and that too in one newspaper, it cannot be presumed that it was targeted at the students belonging to a particular community only. Undoubtedly, the principle of res-judicata and estoppel are not applicable in taxation matters. However, it has been held that a departure from a finding during the past years would result in a contradictory finding. Consequently, this Court is of the view that consistency of approach must be maintained.”
Case Title: Commissioner of Income Tax Delhi v. Hamdrd National Foundation
Citation: ITA 117/2021
Decided on: 6th April 2022
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