TaxTMI 
TaxTMI 
2016 (4) TMI 294
X X X X Extracts X X X X
X X X X Extracts X X X X
....) [Respondent No. 1] and the Central Board of Direct Taxes ('CBDT') [Respondent No. 2] respectively, treating the wealth tax returns filed by the Petitioners as invalid and rejecting the Petitioners' application under Section 10 (2) (b) of the Wealth Tax Act, 1957 ('WT Act') for claim of refund of the wealth tax payment on the ground that Petitioners were not entitled to exemption. 2. The facts in all these petitions are more or less similar. Illustratively, the facts in Writ Petition (Civil) 2303 of 2001 are discussed in detail. 3. The Petitioner in W.P. (C) No. 2303 of 2001, Wular Trust, was formed on 12th November 1987. It obtained registration as a charitable trust under Section 12A (a) of the Income Tax Act, 1961 ('IT Act') on 21st March 1988. The Petitioner-Trust was holding shares of Bajaj Auto Limited ('BAL') as on 31st March 1991. In terms of Section 11 (5) of the IT Act read with Section 13 (1) (d) of the IT Act, the shares held by the charitable trusts were required to be invested in conformity or modes that had been specified in Section 11 (5) of the IT Act, failing which, the exemption provided to the charitable trusts from payment of income tax would be forfeite....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 11 of the IT Act. Consequently, by way of abundant caution, the Petitioner belatedly filed its return of wealth for the AY 1991-92 under protest on 26^th November 1993 disclosing its total wealth at Rs. 1,81,24,600. The Petitioner paid self-assessment tax, including interest for late filing of return, in the sum of Rs. 5,43,692. In the said return, the Petitioner claimed that it was entitled to exemption under Section 5 (1) (i) of WT Act. 9. By an order dated 30th November 1993, which is impugned in the present writ petition, the Additional Director of Wealth Tax (Exemption) [Respondent No. 1] informed the Petitioner that the return of wealth tax filed by the Petitioner was time barred and accordingly treated as invalid. 10. By letters dated 20th November 1993 and 19th June 1996 the Petitioner requested Respondent No. 1 to regularize the assessment proceeding for the AY 1991-92 by issuing notice under Section 17 of the WT Act or to refund the wealth tax of Rs. 5,43,692 paid by it under protest. A reminder was sent on 10th June 1997. 11. Having failed to receive any response from Respondent No. 1, the Petitioner on 17th April 1998 filed a petition before the CBDT [R....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Petitioner did not claim any exemption under Section 11 of the IT Act. In terms of the amendment, the asset held by the Petitioner namely shares of BAL was required to be disinvested before 31st March 1992. This meant that on the due date for filing the income tax return, i.e., 31st October 1991, the Petitioner was ineligible to exemption under Section 11 of the IT Act. Later when the wealth tax return was filed on 26th November 1993 for AY 1991-92 claiming exemption in terms of the amendment to Section 11 of the IT Act. 16. Mr. Vasdev placed reliance on the order dated 20th November 2001 of the ITAT for the AY 1990-91 which in turn upheld the order dated 29th December 2000 of the CIT (A). By the said order, the CIT(A) had reversed the order of the AO which denied the Petitioner's claim for exemption under Section 11 of the IT Act. Likewise, by order dated 27th January 2005 the ITAT had dismissed the Revenue's appeal for the AY 1991-92. Mr. Vasdev also referred to the order of the ITAT in respect of the wealth tax return for the AY 1992-93 which followed the decision of the Madras High Court in Commissioner of Income Tax v. Kumudam Endowments (2000) 242 ITR 159 (Mad). In sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to any reliefs as claimed in the petition. Under the Finance (No. 2) Act of 1991, an amendment was brought about in Section 13 (1) (d) of the IT Act whereby clause (iia) was inserted in the proviso with retrospective effect from 1st April 1983 which provided that for a charitable trust to retain its exemption under Section 11 (5) of the IT Act, it was required to disinvest its shares/assets, after the expiry of one year from the end of the previous year in which such asset is acquired or 31st March 1992, whichever was later. This was later extended till 31st March 1993. It was in view of the above amendment that the Petitioner filed its revised return on 18th January 1992 under the IT Act claiming exemption under Section 11 of the IT Act. 20. However, for the reasons best known to it, the Petitioner did not file a wealth tax return. The Respondent is right in contending that there was no valid reason given by the Petitioner in not filing the wealth tax return within the stipulated time when it had filed its income tax return on 28th June 1991 and a revised return on 18th January 1992. 21. The other fact that has not been disputed by it is that the Petitioner filed the weal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,412. The appeals filed by the Department under the Income Tax Act as well as Wealth Tax Act are still pending." 24. Significantly, in the rejoinder-affidavit filed by the Petitioner the reply to the above paragraph reads as under: "N. In reply to contents of para 5 (N) of the counter affidavit, it is submitted that the appeal filed by Respondent No. 1 against the orders of CIT (Appeals) has been dismissed by the Hon'ble ITAT vide its orders dated 20th November 2001 (Annexure I), 27th January 2005 (Annexure 2) and 23rd May 2001 (Annexure 3) respectively. Under the circumstances, the Hon'ble Court may order the Respondents to refund the tax paid by the Petitioner along with interest accrued thereon." 25. In other words there is no denial by the Petitioner that on the date of filing of the wealth tax return it had failed to comply with the essential conditions for claiming exemption. 26. This fact by itself distinguishes the decisions relied upon by the Petitioner in support of its plea and in particular the decision of the Madras High Court in Commissioner of Income Tax v. Kumudam Endowments (supra) which was followed by the ITAT in its orders, referred to hereinabove, i....