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Orissa High Court
Dayavihar Junior College vs Ito (Exemption) on 19 March, 2026
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.7323 of 2026
Dayavihar Junior College, Kanas,
Puri .... Petitioner
Mr. Prakash Kumar Jena, Advocate
-versus-
ITO (Exemption), Bhubaneswar
and another .... Opposite Parties
Mr. Avinash Kedia, Junior Standing Counsel
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 19.03.2026
01. 1. Assailed in the writ petition is the order dated 2nd December,
2025 passed by the Commissioner of Income Tax
(Exemption), Hyderabad (opposite party No.2) under Section
264 of the Income Tax Act, 1961 (for short, "the IT Act")
pertaining Assessment Year 2016-17, whereby the revision
petition was rejected confirming the disallowance of claim
for exemption under Section 10(23C)(iiiad) in the
Assessment Order dated 11th January, 2024 passed by the
Assessment Unit, Income Tax Department, Faceless
Assessment, India for failure to file return of income under
Section 139 within due date.
2. It is submitted by Mr. Prakash Kumar Jena, learned Advocate
appearing for the petitioner that pursuant to notice issued
under Section 148 of the IT Act, the petitioner having filed
return on 28th March, 2023, in view of Section 148 of the IT
Act the same should have been considered as if it was filed
within the time stipulated under Section 139 of the IT Act. It
is further submitted that the petitioner is an educational
institution which is entitled to exemption from payment of
Income Tax under Section 10(23C)(iiiad) of the said and the
authorities concerned have adopted hyper-technical approach
and raised demand by rejecting the legitimate claim for
exemption made by the petitioner.
3. Mr. Avinash Kedia, learned Junior Standing Counsel seeks
two weeks' accommodation to obtain instruction and if
necessary to file counter affidavit in the matter.
4. List this matter on 9th April, 2026.
5. Considered the submissions of the learned counsels
appearing for the respective parties. Having gone through the
Assessment Order, it is revealed that the assessee has not
filed its return of income for Assessment Year 2016-17 in
compliance with provision under Section 139(1) of the IT
Act, but the assessee filed return of income on 23rd March
2023 in response to notice under Section 148 of the IT Act
and claimed exemption from payment of income tax under
Section 10(23C)(iiiad) of the IT Act. The assessing authority
having refused to consider the disclosures made in the return
so furnished in response to notice under Section 148 of the IT
Act raised a demand. Aggrieved by the said Order of
Assessment passed under Section 147 of the IT Act, the
petitioner approached the Commissioner of Income Tax
(Exemption), Hyderabad by way of revision application
under Section 264 of the IT Act which came to be rejected on
02.12.2025.
6. The submission of learned counsel for the petitioner that the
return furnished in pursuance of notice under Section 148 of
the IT Act is to be treated as if it is furnished under Section
139 of IT Act is supported by well-settled position
enunciated in Commissioner of Income Tax, Punjab Vs. Kulu
Valley Transport Company Private Ltd., (1970) 2 SCC 192.
7. In view of plain language contained in Section 148 of the IT
Act, this Court finds a prima facie case in favour of the
petitioner. The petitioner is entitled to conditional interim
order. In such view of the matter and taking into
consideration the Office Memorandum dated 31st July 2017
issued by Government of India, Ministry of Finance,
Department of Revenue, Central Board of Direct Taxes, the
petitioner is directed to deposit 20% of the demand of tax on
or before 31st March, 2026. On such deposit being made
within the period stipulated, no coercive measure shall be
taken against the petitioner for recovery of the balance
amount of demand till the next date of listing.
8. The Interlocutory Application is accordingly disposed of.
(Harish Tandon)
Chief Justice
Signed by: BICHITRANANDA SAHOO (M.S. Raman)
Reason: Authentication Judge
Location: Orissa High Court, Orissa
Date: 23-Mar-2026 15:34:32
Bichi
