Tax Practitioners Benevolent Fund, a Public Charitable Trust Vs. Commissioner of Income Tax-1 - Court Judgment

Excerpt:
- section 10: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre, jj] admission to professional colleges - technical courses - publication of brochure on basis of which candidates seek admission to various institution keeping in mind their merit and preference of colleges held, for ensuring adherence to proper appreciation of an academic course, it is essential that the method of admission is just, fair and transparent. the first step in this direction would be publication of a brochure on the basis of which the applicants are supposed to aspire for admission to various institution keeping in mind their merit and preference of college. brochure, firstly has to be in conformity with law and the statutory scheme notified by the competent authority. it is a complete and composite document as it deals with the scheme for conducting their entrance examinations, declaration of results, general instructions and method of admission, etc. this brochure is binding on the applicants as well as the authorities. this brochure or admission notification issued by the state or other competent authority cannot be altered at a subsequent stage particularly once the process of admission has begun. there is hardly any exception to this accepted rule of law. section 10: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre,jj] admission to professional colleges - technical courses - approval to additional seats or to start new course - cut off dates held, the settled principle of law is that merit of the applicant is the primary criteria which would determine his rank as well as the college where he would be entitled to admission. this rule should not be frustrated as it will tantamount to entirely upsetting the object of admissions based on merit oriented method and would cast cloud on the fairness and transparency of the method of admission. one of the ways in which merit can be defeated is allowing increase in the intake strength or commencement if new colleges beyond cut-off date and admissions beyond the last date specified in the notification/calendar issued by the concerned authorities. this can be illustrated by giving an example. college a which is running a professional course like engineering or mba etc. has an intake capacity of 60 seats which has duly been notified in the information brochure. however, after the cut-off date, approval is granted by the aicte and thereafter, the process is taken up by the state and the intake capacity of the college is increased by 30 more seats. these seats would obviously, not be notified in the information brochure and the candidate who are meritorious and for whom college a; be the college of reference could not get seats or give preference as the seats were limited. none had the proper knowledge about the increase in intake of seats though at a much subsequent stage and may be even after the last date of admission is over either by themselves or under the order of the court even it is put on the internet or given in the newspaper, the candidates of higher rank or meritorious candidates would not be able to avail of that benefit because they have already submitted the testimonial, have paid their fees and the courses have commenced. in that situation, for variety of reasons, they may not be able to take admission in the institution of their higher preference while the candidates of much lower merit will be admitted to that course. besides defeating the merit, it has been commonly noticed that the late admissions made by the colleges directly effect notified candidates who have questioned it more than often as their admission process is not so just, fair and transparent which has given rise to the litigation. it is also a kind of back door entry method. another serious consequence that result from such admissions is shortening of the academic courses in an undesirable manner. it is expected of other candidate selected to a professional course that he or she would complete the course in its entirety and not by missing more than a month or so in joining the said course. this results in lowering the excellence of education as well as harms the academic standard of professional education. admission to professional colleges: [swatanter kumar, c.j., a.p. deshpande & smt. nishita mhatre, jj] technical courses - held, in process of admission to professional colleges relating to technical courses, primarily three institutional bodies are involved. (i) all india technical council for technical education, (ii) state of maharashtra through director of technical education and (iii) university to which such institution is affiliated the role of all these institutions in distinct and different but for a common object. primary of the rule of all india council for technical education (aicte) is now well settled but that certainly does not mean that role of the state government and for that matter the university is without any purpose or of no importance. the council is the authority constituted under the central act with the responsibility of maintaining education standards and judging upon the infra-structure and facilities available for imparting such professional education. its opinion is of utmost importance and shall take precedence over views of the state as well as that of the university. the concerned department of the state and the affiliating university has a role to pay but it is limited in its application. they cannot lay down any guidelines or policies which would be in conflict with the central statute or the students laid down a by the central body. state can frame its policy for admission to such professional courses but such policy again has to be in conformity with the directives issued by the central body. while the state grants its approval and university its affiliation for increased intake of seats or commencement for a new course/college, its directions should not offend and be repugnant to what has been laid down in the condition of approval granted by the central authority or council. what is most important is that all these authorities have to work ad idem as they all have a common object to achieve i.e. of proper imparting of education an ensuring maintenance of proper standards of education, examination and ensuring proper infrastructure for betterment of educational system. only if all these authorities work in a co-ordinated manner and with co-operation they would be able to achieve the very object for which all these entities exist admission to professional courses: [swatanter kumar, c.j.,a.p. deshpande & smt. nishita mhatre, jj] admission schedule - interference by courts held, all the expert bodies viz. aicte as well as directorate of education in consultation with the departments of the state regulating the process of admission and maintenance of standards of education had notified a legal binding document specifying dates and schedule for various matters in relation to admission of students and commencement of courses. there has to be so compelling circumstances and grounds before the court to interfere with the prescribed schedule. it is neither so arbitrary nor so perverse, keeping in view the essential features relating to imparting education to professional courses that it should invite judicial chastisement to the extent of laying down entirely new schedule. merely because there has been some delay on the part of either of these authorities to timely grant of either of these authorities to timely grant or decline approval and permission to commence a course per se would not be sufficient ground for disturbing the notified schedule and timely commencement of courses. - 14. section 2(15) of the income tax act defines charitable purpose including relief of the poor, education, medical relief and the advancement of any other object of general public utility. if by applying the said definition to the chartered accountants' benevolent fund having objects noted above, the director of income tax (exemption) new delhi, was satisfied to grant exemption to the chartered accountants' benevolent fund under section 80-g of the income tax act, it is difficult to fathom the reasoning of the present respondent while considering the same definition under section 2(15) of the income tax act, 1961, to say that all the objects of the petitioner trust stated at (a) are not charitable in nature inasmuch as the trust is meant for the benefit of a specific group of people i. 15. thus we are satisfied that the order dated 21-1-2002 passed by the office of the income tax i, nagpur, is unsustainable and the application made by the petitioner for grant of exemption under section 80-g needs reconsideration in accordance with law.r. m. lodha, j.1. heard.2. rule. returnable forthwith. mr. a. s. jaiswal, advocate waives service for sole respondent.3. by consent, rule is heard finally at this stage.4. tax practitioners benevolent fund is the petitioner before us. it is a public charitable trust registered under the bombay public trust act, 1950 having registration no. e-1484 (n). inter alia, the said public trust has been constituted to provide assistance to necessitous persons or tax practitioners or their widows, children and dependent and carry on any other act for the advancement of general public utility without distinction of sex, colour, caste, creed or religion.5. the said public trust is also registered with income tax department under section 12(a) of the income tax act. on 9-9-1988 the petitioner trust applied for exemption in the prescribed form under section 80-g of the income tax act before the commissioner of income tax and placed before it the objects of the petitioner trust inter alia providing for financial assistance for maintenance, education or any other similar purpose to necessitous persons, wives and children of persons who are or have been in practice of taxation and support to the relatives or other dependent of a person who has been in practice of taxation and who has died without leaving a widow or child. the said application seeking exemption under section 80-g of the income tax act has been rejected by the income tax officer (hq) (tech) for commissioner of income tax i, nagpur, by order dated 21-1-2002 giving rise to the present petition.6. the objects of the trust in trust deed dated 21-10-1997 provide inter alia thus :--(a) to provide financial assistance for maintenance, education or any other similar purpose to necessitous person beingi) persons who are or have been in practice of taxation, orii) wives and children of persons who are or have been in practice of taxation, or iii) widows and children of deceased persons who have been in practice of taxation, or iv) relatives or others who were dependent for support on a person who has been in practice of taxation and who has died without leaving a widow or child, orb) do any other act for the advancement of general public utility without distinction of sex, colour, caste, creed or religion, and other charitable objects.'7. while rejecting the application made by the petitioner under section 80-g, it was observed by the concerned income tax officer that none of the objects at (a) were charitable in nature inasmuch as the trust is meant for the benefit of a specific group of people i.e. tax practitioners and their relatives and the objects stated at (b) are vague.8. in assailing the aforesaid order dated 21-1-2002, one of the contentions advanced before us by the counsel for petitioner is that another public charitable trust viz. the chartered accountants' benevolent fund having identical objects for the benefit of necessitous person, chartered accountants, or their widows, children and dependents, exemption has been granted under section 80-g of the income tax act.9. the averments made in paragraph 7 of the writ petition reads thus:--'it may be noted that in respect of another trust viz. 'the chartered accountants' benevolent fund' new delhi which has got exactly identical objects with the only difference that the petitioner trust is for the benefit of tax practitioners and their dependents while the said another trust is for the benefit of chartered accountants and their dependents, has been granted exemption certificate under section 80-g by the income-tax department. a true copy of the memorandum of association and rules and regulations of the said 'the chartered accountants' benevolent fund' is filed herewith and is marked as annexure-8'.10. in reply affidavit filed on behalf of the respondent, the exemption granted to the chartered accountants' benevolent fund under section 80-g by the director of income tax (exemption) new delhi is not disputed.11. however, it is submitted that the grant of exemption to chartered accountants' benevolent fund does not entitle the petitioner to exemption as in the opinion of the respondent the objects of the petitioner do not fall within the prescribed parameters. paragraph 5 of the reply affidavit reads thus:--'5. the respondent further submits that on enquiry it is found that the chartered accountants benevolent fund, new delhi has been granted exemption under section 80-g by the director of income tax (exemption) new delhi. the initial exemption was granted for the period 19-12-1985 to 31-12-1986. the exemption has been renewed from time to time and the last order of renewal is passed on 13-9-2000 renewing the approval till 31-3-2003. the respondent submits that the grant of exemption to the chartered accountants benevolent fund does not entitle the petitioner to exemption as in the opinion of the respondent the objects of the petitioner do not fall within the prescribed parameters.'12. the petitioner has placed on record the memorandum of association and rules and regulations of the chartered accountants' benevolent fund. the objects of the chartered accountants' benevolent fund as reflected therefrom read thus :--'the objects for which the fund is established is to provide financial assistance for maintenance, education or any other similar purpose to necessitous person, being :-- (a) persons who are or have been members of the institute, whether subscribers to the fund or not; or(b) wives and children of persons who are or have been members of the institute, whether subscribers to the fund or not; or(c) widows and children of deceased persons who have been members of the institute, whether subscribers to the fund or not; or(d) relatives or others who were dependent for support on a person who has been a member of the institute, whether subscriber to the fund or not; and who has died without leaving a widow or child.'13. if the objects of the chartered accountants' benevolent fund as noted above justify the grant of exemption under section 80-g of the income tax act to the chartered accountants' benevolent fund a charitable trust, we hardly find justification in refusing the petitioner-tax practitioners benevolent fund having similar objects the grant of exemption under section 80-g. section 80-g of the income tax act does not contemplate different yardstick and different parameters being applied to the different trusts having similar objects and similar purpose. it is not open to the income tax department to apply different norms to different trusts having similar objects seeking grant of exemption under section 80-g. close comparison of the objects of the petitioner-tax practitioners benevolent fund and the objects of the chartered accountants benevolent fund would show that the objects are not only similar but virtually identical to provide financial assistance for maintenance, education or any other similar purpose to necessitous persons. in the case of the chartered accountants' benevolent fund, the said provision for financial assistance for maintenance, education or any other similar purpose to necessitous persons is meant for the persons who are or have been members of the institute of chartered accountants of india while the objects of the tax practitioners benevolent fund is to provide financial assistance for maintenance, education or any other similar purpose to necessitous persons who are or have been in practice of taxation. it is true that exemption under section 80-g to the chartered accountants' benevolent fund has been granted by the director of income tax (exemption) new delhi while the petitioner's application for grant of exemption under section 80-g has been rejected by the office of the commissioner of income tax-i, nagpur, but the different officers under the income tax act authorised to consider the application for grant of exemption under section 80-g has to apply the same norms, yardstick and parameters while considering the applications under section 80-g and the similar persons cannot be treated differently merely because the officers happen to be different having different territorial jurisdiction.14. section 2(15) of the income tax act defines charitable purpose including relief of the poor, education, medical relief and the advancement of any other object of general public utility. if by applying the said definition to the chartered accountants' benevolent fund having objects noted above, the director of income tax (exemption) new delhi, was satisfied to grant exemption to the chartered accountants' benevolent fund under section 80-g of the income tax act, it is difficult to fathom the reasoning of the present respondent while considering the same definition under section 2(15) of the income tax act, 1961, to say that all the objects of the petitioner trust stated at (a) are not charitable in nature inasmuch as the trust is meant for the benefit of a specific group of people i.e. tax practitioners and their relatives and the objects stated at (b) are vague. if the objects to provide financial assistance ' for maintenance, education or any other similar purpose to necessitous person who are or have been members of the institute of the chartered accountants of india was not found to be an object meant for the benefit of the specific group of people i.e. members of the institute of chartered accountants of india by the director of income tax (exemption), new delhi, while considering the application made by the chartered accountants' benevolent fund for exemption under section 80-g, it is difficult for us to accept the reasoning of the present respondent for the self same objects of the petitioner-tax practitioners benevolent fund, the objects are for benefit of specific group of people i.e. tax practitioners and their relatives.15. thus we are satisfied that the order dated 21-1-2002 passed by the office of the income tax i, nagpur, is unsustainable and the application made by the petitioner for grant of exemption under section 80-g needs reconsideration in accordance with law.16. consequently we allow the writ petition in part, set aside the order dated 21-1-2002 passed by the office of commissioner of income tax-1, nagpur and restore the petitioner's application under section 80-g of the income tax act, 1961 for reconsideration by the concerned authorities in accordance with law. the respondent is expected to take fresh decision on petitioner's application under section 80-g as directed above expeditiously and preferably within four months from the date of receipt of this order. no costs.