Tirath Ram Shah Charitable Trust vs Union Of India & Others
2011 Latest Caselaw 956 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

+               Writ Petition (Civil) No. 7582/2008

Tirath Ram Shah Charitable Trust         ....Petitioner
                Through Mr. Ajay Vohra, Advocate.

                         VERSUS

Union of India & Others                   .....Respondents
                 Through       Mrs. Prem Lata Bansal, Sr. Advocate
                               with Mr. Deepak Anand, Advocate.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
                              ORDER

% 17.02.2011

By order dated 27th January, 2010, learned counsel for the

respondent - Director General, Income Tax (Exemption) was asked to

take instructions whether the matter can be remanded for fresh

consideration on the application under Section 10(23C)(vi a) of the

Income Tax Act, 1961 (Act, in Short). Learned counsel for the

respondent has not been able to obtain instructions in the said regard.

2. In view of what has been stated in the order dated 27th January,

2010 and in view of the factual matrix of the case, we are of the view

that this is an appropriate case which should be remanded for fresh

decision.

3. The petitioner Tirath Ram Shah Charitable Trust established and

has been running a hospital-cum-nursing home since 1955. The said

trust was granted registration under Section 12A and approval under

Section 80G of the Act. On 6th November, 2003, Director General,

Income Tax (Exemption), Kolkata notified that the petitioner was

covered under Section 10(23C) (vi a) of the Act.

4. On 5th June, 2007, the petitioner filed an application in Form 56D

for grant of exemption and continuation thereof under Section

10(23C)(vi) and (vi a) of the Act for the assessment year 2008-09

onwards. The application was required to be disposed of on or before

30th June, 2008. As per the case of the respondent, at the fag end of

the limitation period, on 16th June, 2008 notice was issued to the

petitioner fixing a hearing on 24th June, 2008. No one appeared for the

petitioner on 24th June, 2008. Consequently, an ex-parte order dated

27th June, 2008 was passed rejecting the application. The case of the

petitioner is that they never received the notice issued on 16th June,

2008 and were not aware of the hearing fixed on 24th June, 2008.

5. The petitioner had filed an application under Section 154 of the

Act claiming that they were not served with the notice for hearing and

that the ex-parte order should be recalled. The said application has

been dismissed recording that the notice dated 16th June, 2008 was

sent by speed post but there was no appearance on behalf of the

petitioner.

6. The petitioner trust was granted approval under Section 12A of

the Act, in 1973. They were also granted approval under Section 80G of

the Act. There is also no dispute that vide notification No. 60/2003,

Director General, Income Tax (Exemption), Kolkata had notified the

petitioner under Section 10(23C) (vi a) of the Act. Similarly, it is

undisputed that application in Form 56D was filed for grant/

continuation of exemption under Section 10(23C)(vi) and (vi a) of the

Act for the assessment year 2008-09 onwards on 5th June, 2007.

Unfortunately, the proceedings were not taken up right till the fag end

of the limitation period which was to expire i.e. on 30th June, 2008.

Notice may have been issued on 16th June, 2008 for hearing fixed on

24th June, 2008, but there is no proof of service or delivery. The

petitioner has disputed and denied that the said notice was served on

them and had filed an affidavit of Dr. Bharat Singh, Medical

Superintendent of the College that they had not received the notice.

The affidavit had been disbelieved and not relied upon in the order

dated 19th August, 2008 dismissing the application under Section 154 of

the Act. However, the Director General of Income Tax (Exemption) did

not take steps to verify from the postal authorities whether or not the

notice sent by speed post was delivered. The stand of the petitioner is

that there was no cause or reason why they should not appear. The

consequence of rejection of the application for grant and continuation

of registration under Section 10(23C)(vi) & (vi a) are harsh and adverse.

It is difficult to accept that the petitioner was avoiding or deliberately

avoided appearance. The impugned ex-parte order was passed in

haste and hurry and without giving full and fair opportunity to the

petitioner.

7. Accordingly, we feel that the impugned order dated 27th June,

2008 should be set aside and the matter remanded for fresh decision of

the Director General of Income Tax (Exemption), Delhi.

8. To avoid any further delay, the petitioner is directed to appear

before the Director General of Income Tax (Exemption) on 17th March,

2011 at 2.30 PM when a further date of hearing will be fixed. As a

considerable time has elapsed, the Director General of Income Tax

(Exemption) will try and dispose of the application for exemption in

Form 56D filed on 5th June, 2007 expeditiously and preferably within a

period of four months from 17th March, 2011. The matter will be

decided on merits without being influenced by the earlier orders.

10. The writ petition is accordingly partially allowed to the above

extent and the impugned orders dated 27th June, 2008 and 19th August,

2008 are hereby set aside.

SANJIV KHANNA, J.

CHIEF JUSTICE FEBRUARY 17, 2011 KKB