TaxTMI 
TaxTMI 
2011 (3) TMI 526
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....nbsp;(ii) Whether in the facts and circumstances of this case the learned Income-tax Appellate Tribunal was justified in holding that the assessee society had not violated the provision of section 13(1)(c) of the Act even though it was diverting substantial fund through its sub-contractors to the founder author of the trust who is a person covered under section 13(3)(a) of the Act? (iii) Whether in the facts and circumstances of the case the learned Income-tax Appellate Tribunal was justified in allowing exemption under section 11 in complete oversight of the fact and law that the founder author is a person covered under section 13(3)(a) of the Act and is deriving; benefit from the assessee trust directly or indirectly and therefore, hit by the provisions of section 13(1)(c) of the Act? (iv) Is the appeal maintainable in view of the scope and sweep of section 260A of the Act, having Act, having been concluded by findings of facts? and (v) Whether or not the appeal raises a substantial question of law in view of the parameters of section 260A of the Act? 2. The department of Income-tax has preferred this appeal under section 260A of the Act,....
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....nal amount from the users to run and maintain the latrines, which naturally brings certain money every year. The respondent, therefore, submitted its returns for the period in question showing NIL income because the receipts were shown as not taxable in view of its aims and objects, as well as its registration under section 12A of the Act. 3.1 The learned assessing officer selected the respondent's case for the period in question for scrutiny, and notices under sections 143(2) and 142(1) of the Act were issued. After a detailed hearing, the learned assessing officer did not accept the returns of the respondent. He held that the alleged activities of the respondent are not charitable activities within the meaning of section 2(15) of the Act as it stood at the relevant point of time. He, inter alia, held that the alleged activities of the respondent, namely, maintenance of latrines, is not within the aims and objects and, therefore, cannot enjoy the benefit of exemption from tax under the Act. He has also held that the respondent has received huge sums of money from the users of latrines which is indicative of commercial activity and disentitles the respondent for the benefit of e....
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....ed by the learned Commissioner, and upheld by the learned Tribunal, and the present appeal does not raise any substantial question of law within the meaning of section 260A of the Act. 6. We have perused the materials on record, and considered the submissions of learned counsel for the parties. We shall first of all consider the preliminary objection raised by the learned counsel for the respondent section 260A of the Act is reproduced hereinbelow: "260A. (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal [before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law. (2) [The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be-] (a) filed within one hundred and twenty days from the date on which the order appealed against is [received by the assessee or the Chief Commissioner or Commissioner]; (b)** ** ** (c) in the ....
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....fter it reaches the conclusion that, in view of the materials on record, no person duly instructed in law can reach that conclusion. In other words, it is not possible to reach the conclusion as has been arrived at by the first appellate court. This well-established principle has avowed public policy that there should be finality to judgments and orders of courts and quasi-judicial authorities. Judicial experience has shown that unlimited number of appeals is never conducive to administration of justice. One author has gone to the extent of observing that unlimited number of appeals is only permissive of substituting one speculation on facts for another. The position is far more stringent for the appellant in the present case in contra-distinction to the second appellate jurisdiction under section 100 of the Code of Civil Procedure, inasmuch as the second appeal before the High Court is the third forum for the appellant, whereas the present forum is the fourth one. This, to our mind, it is a vital aspect of the matter and the appellant will have to make out a strong case of substantial questions of law to maintain this appeal. 8. Speaking on the scope of second appeal within the....
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....ee forums. The findings of facts recorded by the learned assessing officer have not found favour by the learned Commissioner as well as the Tribunal. The issues are concluded by concurrent findings of facts. In such a situation, the needless emphasis placed by the learned Assistant Standing Counsel on the order of the learned assessing officer is completely misplaced. He was unable to point out any change of circumstance which enabled the learned assessing officer to take a different view from those taken by the authorities under the Act with respect to the same respondent and its ancillary organizations with respect to the past periods. It is in fact evident from the impugned order that the assessment with respect to the respondent in identical situation for the period A.Y. 2004-05, the learned Tribunal had found in favour of the respondent which attained finality, no appeal having been taken to the High Court. We further observe from the materials on record that the respondent's returns for the next period, namely, A.Y. 2005-06, were accepted in full. On the self-same facts, the learned assessing officer for the period in question has taken a different view without any change of ....
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....llowed by the learned assessing officer by his order dated 5-3-1998 (Annexure 9), whereby he held that Sulabh International is indeed a charitable society, its income is exempt under sections 11, 12 and 13 of the Act, it is not a benami organization of the petitioner, the fees payable to the petitioner was just and reasonable and for genuine and worth-while services. 7.2 Learned counsel has rightly relied on the judgment of a Division Bench of this Court in Dr. Narendra Prasad (supra), to which one of us (S K Katriar, J.) was a party. That was a case where the order of assessment had been passed by the Settlement Commission which was followed by the authorities under the Act in the subsequent years. During a period of 17 years, the view taken by the Settlement Commission was followed for 15 years, except for a brief period of two years in between when the learned assessing authority on the self-same facts had taken a different view. In other words, the view taken by the Settlement Commission was followed by the learned assessing authority for a long length of time preceding the two periods in question there as well as the periods following thereafter. This Court disapproved of s....
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....e of his jurisdiction in passing the order of assessment. In the facts and circumstances of this case, we are clearly of the view that the present appeal indeed does not give rise to any issue at all, let alone a substantial question of law. The issues are concluded by findings of facts. The appeal is not maintainable. 13. We must also deal with the issues elaborately argued by the learned counsel for the parties about the aims and objects of the respondent, particularly its functions relating to maintenance of the toilets. The learned assessing officer has held that maintenance of public latrines described, as Sulabh Shauchalaya are nowhere to be found in the aims and objects of the respondent and, therefore, does not qualify for exemption. The contention is stated only to be rejected. Law is well settled by a long line of authoritative pronouncements of Courts that every functionary has all the incidental and ancillary powers for the effective exercise of the dominant power, otherwise the dominant and the primary power may be rendered otiose. Taking cue from this salutary and well-established principle of law, it appears to us that the respondent has the necessary obligation t....
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....construct and get constructed house for the Bhangis. To make all efforts to improve the living conditions of the Bhangis. To ensure jobs to those Bhangis and their children who have been relieved from the course of cleaning service latrines. To arrange for education of Bhangis and their wards and to give them various kinds of vocational training. To make other necessary efforts for improving the lot of Bhangis." (Emphasis Supplied) 14. The contention of the learned Assistant Standing Counsel for the Revenue to the effect that maintenance of toilets are not an incidental activity essential to bring into fruition the stated aims and objects of the society is without any substance. Any construction or it accessories and fittings, falling into disrepair on account of use and wear and tear, become unfit for human use, undoubtedly require upkeep and maintenance. The aims and objects of the Society in clause 3(viii) enumerated hereinbefore clearly states construction of toilets. Though maintenance of toilets does not specifically find mention in the aims and objects, but maintenance is an essential and inalienable part of any civil construction whatever may be the scale of construct....
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....e powers to grant stay in a situation where section 255(5) of the Act does not seem to confer that power. The Supreme Court held that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective. The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. But the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. When section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employi....
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....ference to the honest tax-payers, instead of rattling them by inconsistent orders in similar situations. We are informed at the Bar that the department maintains volumes of best practices. The present litigation seems to be inconsistent with its catalogue of best practices. The department has not appreciated the pioneering work being carried on by the respondent and its ancillary organizations for amelioration of the miserable condition of Bhangis, and also for the health, hygiene and dignity of the deprived sections, of the country. However, paragraph 7 of the memorandum of appeal is reproduced hereinbelow: "7. That the founder author of the assessee is still actively working for it. In 2007, he represented it as founder on inauguration of world Toilet Summit in New Delhi, represented the assessee before Dr. Manmohan Singh, the Prime Minister of India and before the President of India Smt. Pratibha Devi Singh Patil. It is on record that in 2008 he represented Sulabh International at the UN on the occasion of formal launch of International year of sanitation, 2008." 19. We are in this connection reminded of the observations of a learned Single Judge of this Court with respect....
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....unimutable fact of life. It is stated in the counter affidavit filed on behalf of the State that at that time Sulabh Sauchalaya (later known as Sulabh International, respondent no.29) was among the first to challenge this practice and to call it the sign of degradation of man. Sulabh Sauchalaya not only advocated for abolishing the practice of scavengers carrying night-soil on their heads but also suggested the means to do so. It took up the scheme for conversion of service latrines into Water Seal Pot Hole Latrines (Sulabh Sauchalayas). The State Government on the basis of repeated decisions taken on different dates entrusted the job of conversion of service latrines into Water Seal Pot Hole Latrines and the construction of public lavatories all over the State to respondent no.29 Sulabh Sauchalaya. The organisation constructed public lavatories all over the State and change over was so rapid, noticeable and impressive that public lavatories all over the State got the popular name after the name of the organisation-Sulabh Shauchalayas. In this State public lavatories are still commonly known as Sulabh Shauchalayas. As part of the Government decision Sulabh Sauchalaya was also to gi....