- (1.) In this writ petition the petitioner has prayed for a writ, order or direction in the nature of certiorari to quash the order dated 25.3.2009 (Annexure No.8) passed by the first respondent i.e. the Chief Commissioner of Income Tax, Allahabad for assessment years 2007-08, 2008-09 and 2009-10 under Section10 (23 C)(vi) of the Income Tax Act 1961 (hereinafter referred as theAct).
(2.) Briefly stated the facts of the present case are that the petitioner is a society registered under the Societies Registration Act having registration No. 2358/83-84 renewed up to 14.12.2010 vide renewal order dated 21.2.2006 (Annexure No.1). It moved an application dated 25.3.2008 (Annexure No. 3) for approval of the institution for exemption of Income under Section 10 (23 C) (vi) of the Act in prescribed form no. 56 D before the respondent claiming it to be engaged in the activity of imparting education. On the said application, the respondent called for report from the CIT Allahabad. On the submission of the report dated 5.3.2009 (Annexure No.4), the respondent issued a show cause notice dated 6.3.2009 (Annexure No.6) to the petitioner enclosing therewith the copy of the report and certain other documents and required the petitioner to produce the books of account, copies of assessment order and the details of ownership of movable and immovable properties held in the name of society. Certain other queries were also made. The petitioner filed the reply dated 17.3.2009 (Annexure No.7) to the report of CIT Allahabad. The petitioner submitted as under : "1. The applicant society has submitted exhaustive details and documents before the Assessing Officer for the purposes of her report on society's application for approval. This report of the Commissioner of Income tax has been submitted without considering the report of the AO and without providing opportunity to the applicant society. 2. The Society is running educational institution and has been granted exemption of income under Section 10(22) of the Income-tax Act, 1961 for several earlier assessment years. In the assessment for the Ays : 1985-86; 1986-87 and 1988-89 the order of CIT (Appeals) allowing exemption of income u/s 10(22) of the Income-tax Act, 1961 upheld by ITAT, Allahabad. The Departmental application for reference and appeal has been rejected by ITAT and hon'ble High Court, respectively. Copy of respective orders of ITAT and High Court Allahabad are filed enclosed here with for your honour's immediate ready reference. 3. Learned CIT, Allahabad has submitted his report dated: 06.03.2009, mainly on the basis of findings in order of ITAT for AY; 1989-90 which is subjudice and is not yet final. He has erred to disregard the decision of ITAT for immediately preceding year and earlier two years which are in favour of the applicant society on the issue of exemption of income u/s 10(22) of the Act. The order of ITAT for the Assttt. Years 1985-86; 1986-87 and 1988-89 have become final by the order of hon'ble High Court. 4. The appeal of the applicant society has been listed for hearing before the hon'ble High Court in this week. There are all possibilities that the society's appeal will be decided shortly and the controversy arising from the order of ITAT for AY:1989-90 will be decided, hopefully in favour of the society. 5. During the years for which approval has been applied the coaching activity is run by a private limited company in which none of the members of the society is participating. The company is assessed to tax separately and liable to pay taxes on its income. The observation of the learned CIT on this point is without any basis. 6. The object of the society is to impart education and it is running an educational institution. It is existing solely for educational purposes and its object is not to make profit. It is meeting all the conditions and requirements of Section 10(23C)(vi) of the Income-Tax Act, 1961. It has already been granted exemption of income u/s 10(22) of the Act for several earlier assessment years. The provisions of Section 10(23C)(vi) is analogous to the provisions of Section 10(22) of the Act. The educational objects of the society and the activity of giving education has neither been questioned nor challenged by any authority, so far. The utilization and application of income being subject matter of monitoring at the assessment stage as per the proviso to Section 10(23C)(vi) of the Act as held by hon'ble Supreme Court in case of American Hotel & Lodging Association Educational Institution Vs. CBDT and others, 2008 301 ITR 86, the compliance and non compliance of the same cannot be considered and gauged at the stage of granting approval by the prescribed authority."
(3.) The petitioner relied on the judgment of Hon'ble Supreme Court in the case of American Hotel & Lodging Association Educational Institute Vs. Central Board of Direct Taxes and others, 2008 301 ITR 86(Annexure No.7). The respondent considered the reply of the petitioner and passed the impugned order dated 25.3.2009 (Annexure No.8) and rejecting the application for grant of exemption under Section 10 (23 C) (vi) of the Act. Aggrieved with the order, the petitioner has filed the present writ petition.;