2014 (4) TMI 828 - HC - Income Tax

Time granted to produce tax exemption certificate for educational institution impact fee claim

The court granted time for a charitable educational institution to produce a certificate under Section 80-G of the Income Tax Act to seek exemption from ... Exemption from the liability of the impact fee - Production of certificate of exemption u/s 80G of the Act – Charitable educational institution – Held that:- The fact that the Prescribed Authority Regulated Area has granted 15 days’ time to the assessee to produce the certificate from the Income Tax Department indicates that the Prescribed Authority Regulated Area would take into account the claim of the assessee in case the certificate u/s 80-G of the Income Tax Act is issued in favour of the assessee – it would be appropriate to grant time to the assesseee as prayed for to produce the certificate u/s 80-G of the Act. Issues:1. Exemption under Section 80-G of the Income Tax Act for a charitable educational institution.2. Validity of recovery citation for impact fee.Analysis:1. The petitioner, a charitable educational institution, sought exemption from an impact fee imposed by the Prescribed Authority. The Prescribed Authority granted time to produce a certificate under Section 80-G of the Income Tax Act. The petitioner applied for the certificate, pending a decision from the Income Tax Department. The recovery citation for the impact fee was issued before the certificate was granted, leading to the petition challenging the citation.2. The Standing Counsel argued that even if the certificate is granted, it may not have retrospective effect. The court acknowledged the petitioner's claim as a charitable educational institution and noted the Prescribed Authority's willingness to consider the exemption if the certificate is produced. The court granted time for the petitioner to submit the certificate, directing the Prescribed Authority to examine the claim and issue a reasoned order promptly upon receipt of the certificate.3. The court clarified that it did not express an opinion on the institution's charitable status or the effect of the certificate under Section 80-G. The judgment disposed of the petition, providing a deadline for producing the certificate. If the certificate is not submitted by the deadline, the recovery of the impact fee will proceed as arrears of land revenue. No costs were awarded, and a certified copy of the order was to be provided to the petitioner's counsel upon payment.This judgment highlights the importance of documentation and procedural compliance in seeking exemptions under tax laws for charitable institutions. It emphasizes the need for timely submission of required certificates and the authority's obligation to consider such claims in accordance with the law.