COMMISSIONER OF INCOME TAX Vs. VISVESVARAYA TECHNOLOGICAL UNIVERSITY

JUDGEMENT

(1.) THE Income Tax Department is before this Court in this appeal filed under Section 260 -A of the Income -tax Act, 1961 (for short, 'the Act'). Though this Court vide order dated 20 -3 -2012 admitted the appeal to consider three questions of law. We are of the opinion that following questions of law is sufficient to consider this appeal and the same is as under: 1. Whether on facts and in law, ITAT is right in holding that the CIT cannot withdraw recognition under Section 80 -G(5) of the Act on the basis of wrong application submitted by the assessee for renewal of recognition when the facts stated in the order itself prove that the assess University is not eligible for exemption under Section 10(23 -C)(iii -ab) of the Income -tax Act, 1961? The respondent is a University established under Visvesvaraya Technological University Act, 1994. The respondent submitted an application for renewal of the exemption certificate issued under Section 80 -G of the Income Tax Act. The respondent made this renewal application under a bona fide impression that the exemption certificate requires renewal. The Commissioner noticed that Section 80 -G came to be amended to the effect that exemption granted prior to 1 -10 -2009 need not require renewal. The Commissioner while rejecting the application for renewal had withdrawn the exemption granted under Section 80 -G of the Act on the ground that there is violation of conditions specified in exemption certificate. Aggrieved by this order of the Commissioner, the respondent filed an appeal before the Tribunal and under the impugned order, the Tribunal set aside the order of Commissioner. Therefore, Revenue is before this Court.

(2.) WE heard arguments on both the side and perused the entire appeal papers. A perusal of the impugned order passed by the Commissioner specifies that what was pending consideration before him was the application filed by the respondent for renewal of exemption certificate. Without issuing a notice specifying what are the conditions violated by the respondent and without providing an opportunity the impugned order came to be passed withdrawing the exemption granted under Section 80 -G of the Act. It is open for the Commissioner to initiate separate proceedings, issue necessary notice, provide opportunity and then pass appropriate orders in accordance with law relating to withdrawal of exemption certificate. Without following this procedure, the Commissioner committed a mistake in passing the order of withdrawal. Therefore, in the facts and circumstances of this case, the Tribunal has rightly reversed the findings of the Commissioner, The impugned order passed by the Tribunal is in accordance with law. Accordingly, we answer the question of law framed above against the revenue and in favour of the assessee. Accordingly, the appeal is hereby disposed of.