Delhi High Court
Gakko Bunka Education Soceity vs South Delhi Municipal ... on 30 October, 2014
Author: Manmohan
#34
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 5874/2014
GAKKO BUNKA EDUCATION SOCEITY ..... Petitioner
Through Mr. Mohit Kumar Shah, Advocate
versus
SOUTH DELHI MUNICIPAL CORPORATION
AND ANR. ..... Respondents
Through Mr. Gaurang Kanth, Advocate
% Date of Decision : 30th October, 2014
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
JUDGMENT
MANMOHAN, J: (Oral)
1. Present writ petition has been filed seeking quashing of the condition
in Para No.(ii) sub para (ii) imposed by the respondents vide letter dated 05 th
March, 2013 while sanctioning the additional FAR for the petitioner's
School building situated at Sector A, Pocket B & C, Vasant Kunj, New
Delhi whereby the petitioner was asked to deposit Rs.2,07,73,000/- towards
the additional FAR charges. Petitioner also prays for quashing the
Order/Letter bearing No. D/1018/EE (Bldg) HQ-1/South DMC/2013 dated
19th December, 2013 issued by the respondent No.2 whereby it refused to
refund the aforesaid amount deposited by the petitioner under protest
towards the additional FAR charges. The relevant portion of letter dated
19th December, 2013 reads as under:-
"1. Such exemption is available to the Societies as per Gazette
Notification 17th July, 2012 in whose favour the land was
allotted. In the instant case, the land under reference was
allotted by the D.D.A. in favour of the Embassy of Japan and not
in favour of Gakko Bunka Education Society;
2. The Ministry of External Affairs, vide its letter dated
20.12.1989 (condition No.7), envisages clearly that the school
premises will not be entitled to privileges and immunities, as
normally extended to premises of Foreign Diplomatic and
Consular Missions;
3. The land belongs to the Embassy of Japan and the Society
i.e. Gakko Bunka Education Society, claiming the exemption of
additional FAR Charges has been formed for the purpose to run
the School only."
2. Mr. Mohit Kumar Shah, learned counsel for petitioner states that in
1989 the Ministry of External Affairs had granted permission to Embassy of
Japan to open and run the Japanese School. In pursuance to said
recommendation, Delhi Development Authority (hereinafter referred to as
'DDA') had allotted a land admeasuring 3.0134 acres in Sector A, Pocket B
& C, Vasant Kunj, New Delhi for construction of Japanese School.
3. On 30th December, 2003, the Embassy of Japan entered into a
Memorandum of Understanding with petitioner-Society for running and
managing the Japanese School since the Embassy of Japan was engaged in
various other works and found it difficult to run the day-to-day business of
the school. The petitioner-Gakko Bunka Education Society is stated to be
registered vide Registration No. S/47461/2003 under the Societies
Registration Act, 1860.
4. Mr. Shah states that petitioner-society is a charitable organization as it
undertakes educational activities and has obtained the Certificate dated 28th
March, 2005 under Section 12A of the Income Tax Act, 1961 (for short
'Act, 1961'). Consequently, according to him, the petitioner-society is
registered as a charitable institution and is exempt from payment of income
tax.
5. He states that the petitioner society vide Resolution dated 01 st
October, 2012 authorised the then Principal Mr. Haruhisa Usui to apply for
sanction of building plans for additional construction to be carried out in the
already existing building of the Japanese School. He points out that the
respondent No.1, vide its letter dated 05th March, 2013, sanctioned the
building plans for the proposed construction by the petitioner subject to the
deposit of an amount of Rs.2,07,73,000/- on account of additional FAR
charges as a pre-condition for the release of sanction.
6. On receiving the said letter, the petitioner contacted the respondents
and during the said meetings, it was pointed out to the officers of the
respondent No.1 that the petitioner is an educational institution exempt
under the Income tax Act, 1961 and hence the petitioner is entitled for the
benefit of the Notification dated 17th July, 2012. However, according to Mr.
Shah, the officials of the respondents clarified that it was internally decided
by the senior officials of the North Delhi Municipal Corporation that the
benefit of the DDA's notification dated 17th July, 2012 would be extended
only to those institutions who can produce certificate under Section 80G of
the Income Tax Act, 1961. He stated that since the respondents were not
releasing the petitioner's sanction plan, the petitioner was left with no option
but to succumb to the illegal demand made by the respondents under protest.
7. Though Mr. Shah admits that land was allotted in favour of Embassy
of Japan and not in favour of petitioner-society, yet he contends that the
issue of ownership is irrelevant for the purposes of refund of additional FAR
charges. In support of his contention, Mr. Shah relies upon the DDA
Notification dated 17th July, 2012. He points out that the Notification dated
17th July, 2012 is an amendment to an earlier Notification dated 23rd
December, 2008. The relevant portion of the said Notifications reads as
under:-
A) Notification dated 23rd December, 2008:-
6. (g) Additional @ 50% of the updated
FAR charges for Zonal market rate of South & Dwarka Rs. 29525/-
institutional Intuitional properties North, East, West, Rs.13008/-
plots i.e. for those disposed by & Rohini
including auction as well as for Narela Rs.9691/-
hospital plots. those properties which
were allotted to private
Parties. This is not This is not application to those
applicable to those institutions which were allotted land
institutions which were @Re.1/- for whom no such charge is
allotted land @Rs.1/- for Recommended.
whom no such charges is
recommended.
B) Notification dated 17th July, 2012:-
Sl. No. Item. Modified Rates approved by the Ministry.
1. Additional FAR charges for No additional FAR charges to be
Institutional Plots. 6(g). recovered from Educational
societies/Health-care and Social welfare
societies having Income Tax Exemption.
The other contents of the notification dated 23/12/2008 will remain
unchanged........
(emphasis supplied)
8. Mr. Shah also points out that the Division Bench of this Court has
already allowed refund of additional FAR charges levied by respondent
No.1 in LPA 107/2014 , W.P.(C) Nos. 7921/2012, 1327/2013 and 915/2014.
He submits that on the principle of fairness, petitioner is also entitled to a
refund of additional FAR charges.
9. On the other hand, Mr. Gaurang Kanth, learned counsel for
respondents states that petitioner is not entitled for refund of additional FAR
charges as the ownership of land of Japanese school is in favour of Embassy
of Japan, whereas the application for sanction of building plan and for
refund of additional FAR had been made by the Principal of Japanese
School.
10. Mr. Kanth further states that in the meeting held on 18th March, 2013,
it was decided that refund of additional FAR charges would be made only to
those entities which furnish the proof of income tax exemption in the form
of 80G Certificate/Letter duly issued by the Income Tax Department. He
points out that petitioner had failed to furnish the certificate under Section
80G of the Act, 1961.
11. Having heard learned counsel for parties and having perused the
papers, it is apparent that the Japanese School is being run, operated and
managed by the petitioner-society and it is responsible for school's
administration as well as its day-to-day affairs including additional
construction therein. Some of the relevant terms of the Memorandum of
Understanding dated 30th December, 2003 executed between the Embassy of
Japan and the petitioner-society are reproduced hereinbelow:-
"7. The Society had been registered on 11th November, 2003
with the object of conducting the School in Delhi on the lines of
the education system of Japan;
NOW, THEREFORE, IT IS CONFIRMED AS FOLLOWS:-
I SCOPE OF UNDERSTANDING
From the designated date 30th December 2003, the
Society would render their services in the functioning of the
School, its administration and day-to-day affairs, and the
Embassy would provide such appropriate support and advice
for the purpose.
xxxx xxxx xxxx xxxx
III ROLE OF THE SOCIETY
xxxx xxxx xxxx xxxx
C. All liabilities, statutory or otherwise, in regard to the
running of the School, including statutory impositions, taxes,
rates, cesses, levies, and duties, shall be borne by the Society.
D. The Society shall be liable to obtain all clearances,
permits and comply with all legal requirements applicable."
12. Further, the documents on record show that the Principal of Japanese
School had applied for sanction of building plan on behalf of petitioner-
society in his capacity as its authorized representative and the respondents
had granted sanction to him for additional construction vide letter dated 05th
March, 2013.
13. In the opinion of this Court, respondents having received the FAR
charges and having granted the sanction to the petitioner-society is estopped
from challenging the locus of the petitioner-society from claiming refund of
the additional FAR charges. Also keeping in view the contemporaneous
documents like Memorandum of Understanding dated 30th December, 2003,
income tax exemption letter dated 18th March, 2005 and sanction letter dated
05th March, 2013, it cannot be said that the petitioner had resorted to
subterfuge to take advantage of DDA's notification dated 17th July, 2012.
14. This Court is of the view that the intent of the DDA Notifications
dated 23rd December, 2008 and 17th July, 2012, was to give exemption to the
Educational Societies having income tax exemption from payment of
additional FAR charges. If the intent was to exempt only the owners from
payment of additional FAR Charges, the same would have been
categorically and explicitly mentioned therein.
15. This Court is further of the opinion that in view of the petitioner
having been registered under Section 12A read with Section 12AA(1)(b) of
the Act, 1961, petitioner-society is a charitable institution, exempt from
payment of taxes and is entitled to the benefit of the Notification dated 17th
July, 2012. In fact, exemption under Section 80G of the Act, 1961 is a
benefit given to people who give donations to institutions having registration
under Section 12A of the Act, 1961.
16. The respondents' stand in the counter affidavit is not in consonance
with the DDA's Notification dated 17th July, 2012, which clearly stipulates
that no additional FAR charges shall be recovered from Educational
Societies having income tax exemption. The aforesaid DDA Notification
nowhere stipulates that a Certificate/Letter under Section 80G of the Act,
1961 is mandatory. Consequently, the respondents' stand that the benefit of
Notification dated 17th July, 2012 is restricted to only those institutions
which have exemptions under Section 80G of the Act, 1961, is untenable in
law.
17. The controversy at hand is also settled beyond doubt by the
Exemption letter dated 17th May, 2013 issued by the Office of the Director
of Income Tax (E). The relevant portion of the said letter reads as under:-
"Sub.: Request for issue of letter for exemption of Income - reg
Kindly refer to your letter dated 9/5/2013 on the
captioned subject. In this regard, it is clarified that by virtue of
certificate No. 1742 dated 28/03/2005 issued u/s 12A by this
office, your society is a charitable institution and its income is
exempt from tax as per provisions of Income-tax Act, 1961."
(emphasis supplied)
18. In view of the aforesaid, present writ petition is allowed and
respondent-Corporation is directed to refund the additional FAR charges to
the petitioner within a period of four weeks.
MANMOHAN, J
OCTOBER 30, 2014
rn
