B.N.MAHAPATRA, J. - (1.) THE petitioner has filed this writ petition claimingseveral reliefs. However, Mr. SaswatAcharya, learned counsel appearing for the petitioner confined those to following reliefs: (i) To quash order dated 13.08.2010 (Annexure -1) passed by opposite party No.1 -Income Tax Officer (TDS), Cuttack rejecting the petitioner's application dated 04.09.2009 (Annexure -5) made in Form 13 for issuance of No -Deduction certificate under Section 197 of the Income Tax Act, 1961 (for short, "Act, 1961") to different persons for the financial year 2009 -2010. (ii) To declare the action of the opposite parties, particularly, opposite party no.1 and opposite party No.3 in sitting over the petitioner's application for issue of No -Deduction Certificate filed on 22.06.2009 followed by two reminders dated 04.09.2009 and 25.02.2010 for 14 months and pushing it to beyond the financial years 2009 -10 and ultimately rejecting the same on 13.08.2010 in spite of the direction of this Court in its order dated 09.07.2010 to issue No -Deduction Certificate under Section 197 of the Act, 1961 within a period of four weeks from the date of the order as deliberate and illegal.
(2.) PETITIONER 's case in a nutshell is that it is a non -profitmaking organization, involved in the general public utility to ensure payment of wages of the labourers as well as their welfare, without involvement in any activity of trade, commerce or business. Petitioner's Trust was created under the recommendation of Justice H.R. Khanna, Former Judge, Supreme Court of India to smoothen the process of payment to labourers engaged by stevedores. Stevedores under the Paradeep Port for cargo handling were engaging group of labourers, on their own choice, on pick and choose basis, for which few group of labourers, were getting constant engagement and other were remaining completely unemployed. That apart, stevedores having their business interest were negotiating with labour leaders to get their work done at reduced rate. This led to fierce infighting between different groups of labourers and ultimately ended up in loss of life and property. In the year 1984, it took such an ugly turn that the Inspector -in -Charge of Paradeep Police Station and his associates together with four labourers lost their lives. Therefore, to solve this problem the Government intervened and the matter came up before the Hon'ble Supreme Court of India inParadip Port Trust vs. Paradip Dock &Mazdoor Union, Civil Appeal No.1422 of 1990. The Hon'ble Supreme Court vide order dated 15.03.1990, directed to constitute a High Powered Committee under Chairmanship of Mr. H.R. Khana, Former Judge, Supreme Court of India with two members nominated by the Ministry of Surface Transport, one of whom is a representative of that Ministry and another is an expert in Port Management. The High Powered Committee had to decide the question of listing the unlisted labourers and their welfare measures at Paradeep Port Trust. As per recommendation of the Hon'ble Former Justice Mr. H.R. Khanna, Supreme Court of India, a body was formed in the name of petitioner -Management Committee (CFH) Scheme. The petitioner -Committee comprises all "Stevedores", "Senior Officials of Paradeep Port Trust" and "Labour Representatives from different labour Unions" to manage uniform engagement of labourers and disbursement of wages ensuring their welfare, health, housing and retirement benefit etc., so as to ensure that no labour of the pool is exploited by any of the Stevedores. Thus, the power of disbursement of wage was withdrawn from the stevedores and was entrusted to the pool constituted by the petitioner - Management Committee (CFH) Scheme. With this backdrop, the petitioner -charitable organization registered under Section 12AA of the Act, 1961. The petitioner has filed its returns and assessment havebeen completed for past years by treating the petitioner as a Charitable organization, income whereof is exempted under Section 11 of the Act, 1961. Throughout its existence for more than a decade no tax has been paid by it for any one of the assessment years except assessment year 2004 -05 and 2005 - 06, where a suo -motu revision was being initiated by the Commissioner of Income Tax, which has been subsequently quashed by the learned Income Tax Appellate Tribunal, Cuttack Bench, Cuttack that resulted in NIL demand for both the years. For the year in question, petitioner's application for grant of No -Deduction Certificate under Section 197 was processed and in response to the further query made by opposite party No.1, the petitioner filed the copies of last two years audited accounts and copy of the last assessment order on 04.09.2009. After receipt of the compliance, the concerned section lost the original application somewhere in the office, as a result of which the petitioner again had to file another copy along with all the enclosures on 25.02.2010 accompanied with a request to dispose of the application of the petitioner at an early date. Since no -deduction certificate was not issued in terms of Section 197(1) of the Act, 1961, an informal complaint was filed before the Commissioner of Income Tax but the same did not yield any result. In sheer, desperation, the petitioner was forced to invoke the extra ordinary jurisdiction of this Court by filing W.P.(C) No.5458 of 2010 praying inter alia for issuance of No -Deduction Certificate under the Statutory provision of the Act. The said writ petition was disposed of on 09.07.2010 with a direction to the opposite parties to consider the application of the petitioner for grant of no -deduction certificate in accordance with law and dispose of the same within four weeks from the date of the order. Thereafter, the petitioner approached opposite party No. 1 for issuance of no -deduction certificate in terms of the order of this Court dated 09.07.2010 passed in W.P.(C) No.5458 of 2010 and the same was disposed of only on 13.08.2010 rejecting the application of the petitioner on the plea that since the financial year had already lapsed, certificate under Section 197 of the Act, for the financial year 2009 -10 cannot be issued. Hence, the present writ petition.
(3.) MR . S.K. Acharya, learned counsel appearing for thepetitioner submitted that due to dilatory tactics of opposite party nos. 1 to 3 and particularly, the action of opposite party No. 1 for non -compliance of the order of this Court, the petitioner is now falling within the mischief of the penal and prejudicial proceedings under Section 40 (a)(ia) of the Act, 1961. Since, No - Deduction Certificate had not been issued to the petitioner in time, some principals who engage the services of the labourers through the petitioner trust, made payments to the petitioner deducting TDS from such payments, whereas other principals have not deducted TDS considering the fact that the petitioner has been getting the No -Deduction Certificate in the past. Consequently, the petitioner faces a double edged sword in the manner of wrongful collection of taxes form the payments made by principals after deducting TDS and disallowances under Section 40(a)(ia) for payments made by principals without deducting TDS. Even though for the immediately preceding year i.e. the financial year 2008 -09, no - deduction certificate was issued to the petitioner under Section 197 of the Act, but the same was not considered by opposite party Nos.1 to 3 while rejecting the application of the petitioner for issuance of no -deduction certificate under Section 197 of the Act for the financial year 2009 -10.;