Commissioner of Income Tax Vs. M. Sarojini Devi - Court Judgment

Excerpt:
direct taxation - compensation - government acquired lands belonging to assessee - compensation awarded to assessee enhanced on appeal - state government appealed against enhancement before supreme court and same was pending - assessee entitled to interest on enhanced compensation - assessee liable to pay tax on interest - in case supreme court reversed judgment enhancing compensation assessee entitled to refund of tax. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. teacher employed in the school run by cantonment board being covered under rule 2 (f) of the cantonment fund servants rules, 1937 can file appeal under rules 13, 14 and 15 to authorities provided therein against any order imposing any penalties etc. [deolali cantonment board v usha devidas dongre, 1993 mah. lj 74; 1993 lab ic 1858 overruled]. -- maharashtra employees of private schools (conditions of service) regulations act, 1978 [act no. 3/1978]. sections 9 & 2(21): jurisdiction of school tribunal whether a school run by cantonment board is not a recognised school within the meaning of section 2(21)? - held, the act is enacted to regulate recruitments and conditions of employees in certain private schools and provisions of the act shall apply to all private schools in the state whether receiving any grant-in-aid from the state government or not. private school is defined in section 2(2) of the act as a recognised school established or administered by a management other than the government or a local authority. recognised means recognised by director, the divisional board or state board. thus as far as the first part of the definition of being recognised is concerned, it includes, as stated above, four directors, the divisional boards and four state boards. the second part of this definition which comes after the comma refers to any officer authorised by director or by any of such boards. the question to be examined is whether school run by the cantonment board could be said to be one run by any such boards. a private school has to be recognised by the state or the divisional board or by any officer authorised in that behalf. when this phrase namely: recognised by any officer authorised by the director or by any such boards, is included in the latter part of section 2(21), such boards will be of the level of the state board or the divisional board. the boards referred to in the definition of the word recognised means the boards which deal with education at levels other than that of the level at which primary schools are operating. thus for being recognised, the school has to be recognised by the board and therefore, it has to be operating at a higher level i.e., secondary level. section 2(21) of the act defines the term recognised. the last clause therein is by any of such boards. the term such is defined in oxford dictionary as of the kind or degree indicated or implied by the context. therefore, the term such board will have to mean a divisional board of or the level of divisional board or the state board. the divisional board holds the examination and issues certificates after 10th and 12th standard examinations. the state board advises the state government on policy matters, ensures uniform pattern of secondary and higher secondary education, lays down principles for determining syllabi, prescribes text books, etc. the cantonment board does not discharge any of such duties nor is there any other board or body under the cantonments act discharging any such duties. the duties of the cantonment board are laid down in section 62 and amongst others, clause (xiv) lays down the duties of establishing and maintaining or assisting primary schools only. the cantonment board is not required to enter into the area of secondary education. therefore, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. that being the position, it is not possible to accept it to be a recognised school for being a private school under the act. for the reasons state above, the school tribunal constituted under section 8 of the act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. [deolali cantonment board v usha devidas dongre, 1993 mah.lj 74; 1993 lab ic 1858 overruled]. bilal nazki, j.1. lands belonging to the assessee have been acquired by the government in the year 1966 and compensation was awarded by the land acquisition officer. on reference, compensation at higher rate was awarded. the assessee was held to be entitled to an interest of rs. 43,642/- for the period 18-5-1966 to 9-12-1975. the state government went in appeal against the enhancement made in the appeal. the appeal before the supreme court was pending. the income-tax officer held that the entire amount of interest on enhanced compensation should be brought to tax for the assessment year 1976-77. the order was challenged by way of appeal. the appellant assistant commissioner held that as the matter had not become final and an appeal was before the supreme court, the amount of interest received by the assessee could not be taxed. he relied on a judgment of this court in c.i.t. vs. smt. sankari manickyamma1. on further appeal before the tribunal, the same view was upheld relying upon the same judgment. thereafter at the instance of the revenue, the following question has been framed and referred to this court:' whether on the facts and in the circumstances of the case, the interest on compensation the assessment year for which the interest should be brought to tax is the one in which it was awarded or the year in which issue of quantum of compensation becomes final?'2.we have given the facts of the case somewhat in detail only because we have find that the question is not happily framed. the question, which needed to be answered, is 'whether the assessing officer has to wait till the final disposal by the final court in an acquisition matter before the interest accrued is taxed?' therefore, we are reframing the question in the above mentioned phraseology and we find that the question is already answered by the supreme court in rama bai vs. c.i.t.2. the fact that the compensation was enhanced by the high court in an appeal and the interest accruing to it was received by the assessee makes him liable to pay the tax. however, it will be spread over the period for which it accrued to him, in accordance with the supreme court judgment. in any case, if the judgment enhancing the compensation in favour of the assessee is reversed by the supreme court, then the assessee, even after payment of the tax on the accrued interest, would not be remediless. he can always seek the refund of the tax so paid, by making appropriate application for rectification of the assessment. the tribunal relied on judgment in smt. sankari manickyamma (1 supra) that obviously stands reversed in view of the judgment of the supreme court judgment in rama bai (2 supra). 3.for all these reasons, we answer the question in favour of the revenue as indicated above and against the assessee.