1982 (4) TMI 138 - AT - Income Tax

Religious institution denied tax exemption on income by Tribunal; estoppel not applicable

Radha Swamy Sat Sang. Versus Income-Tax Officer.

The Tribunal upheld the judgment of the Allahabad High Court, denying exemption of income derived by a religious institution under sections 11 and 12 of ... High Court, Tribunal's Order Issues:1. Interpretation of the judgment of the Allahabad High Court regarding the exemption of income derived by a religious institution under sections 11 and 12 of the Income-tax Act, 1961.2. Consideration of the assessee's alternative submission based on the ground of estoppel.3. Review of the additions made by the departmental authorities to the income of the assessee.4. Application of the rule of 'stare decisis' and estoppel against statute in tax litigation.Analysis:Issue 1:The judgment of the Allahabad High Court answered a question regarding the entitlement of income derived by a religious institution to exemption under sections 11 and 12 of the Income-tax Act, 1961, in the negative, favoring the department over the assessee. The Tribunal was required to pass an order conformably to this judgment. The learned counsel for the assessee argued that an alternative submission based on the ground of estoppel should be considered and disposed of by the Tribunal. However, the Tribunal held that an independent and fresh examination of the issue had already been conducted by both the Tribunal and the High Court, making it unnecessary to revisit the matter beyond the jurisdiction established by the High Court's judgment.Issue 2:The assessee's counsel pressed for the consideration of grounds related to the refund claimed and the alleged unlawfulness of the assessment. The counsel contended that the applications for refund filed by the assessee should not have been converted into proceedings for assessing the total income. The Tribunal was urged to delete the additions made by the departmental authorities to the assessee's income. However, the Tribunal, after considering the submissions and relevant decisions, rejected the grounds raised by the assessee, emphasizing that the matter had already been extensively examined by both the Tribunal and the High Court.Issue 3:The counsel for the revenue contested the contentions raised by the assessee, arguing that seeking a decision in favor of the assessee after an adverse judgment by the High Court was impermissible. The revenue's counsel also opposed the grounds related to estoppel, asserting that such contentions were misconceived. The Tribunal, after a thorough review of the arguments and legal principles, upheld the additions made by the departmental authorities to the income of the assessee, citing relevant Supreme Court judgments on the doctrine of estoppel.Issue 4:The Tribunal delved into the application of the rule of 'stare decisis' and estoppel against statute in tax litigation. Quoting Supreme Court decisions, the Tribunal emphasized that estoppel cannot be invoked against a statute, and public duties imposed by statute cannot be hindered by estoppel. The Tribunal rejected the assessee's contentions based on estoppel and stare decisis, aligning its decision with the principles outlined in the cited judgments.This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal, the arguments presented by both parties, and the legal principles applied in reaching the decision.