SIMPKINS SCHOOL Vs. DIRECTOR GENERAL OF INCOME TAX

JUDGEMENT

(1.) The petitioner is a society duly registered under the Societies Registration Act since 1982 and is running an educational institution known as Simpkins School at Agra. The petitioner has been enjoying exemption under Section 10(22) of the Income Tax Act, 1961 (hereinafter referred to as the Act) upto the assessment year 1998-99. By Finance Act No.2 of 1998 w.e.f. 1st April, 1999 Section (22) of the Act was omitted and an analogous provision Section 10(23C)(vi) was brought into existence with effect from the same date. Under Rule 2BC of the Income Tax Rules if the gross receipts are below Rs.1 crore, approval is not required but if the gross receipts exceeds Rs.1 crore, approval is required to be taken under Section 10(23C)(vi).

(2.) The petitioner contends that even after coming into existence the provision of Section 10(23C)(vi) of the Act, the gross receipts for the assessment year 1998-99 till assessment year 2002-03, being less than Rs.1 crore, the petitioner did not apply for approval. Since its gross receipts exceeded Rs.1 crore in the assessment year 2003-04, the petitioner applied for approval of exemption before the Commissioner of Income Tax, Agra by moving an application in the prescribed form 56-D under Rule 2CA on 22nd March, 2003 praying for exemption under Section 10(23C)(vi) of the Act for the assessment year 2003-04 and 2004-05. Another application was filed on 31st May, 2006 before the Director General of Income Tax (Investigation), Lucknow for the assessment year 2004-05, 2005-06, 2006-07. This application was filed before the Director General of Income Tax (Investigation), Lucknow on the ground that the jurisdiction of the petitioner was centralized in the year 2004 in the wake of search and seizure action under Section 132(1) of the Act. Another application before the same authority was filed on 27th March, 2007 for the assessment year 2007-08. Another application was filed on 31st March, 2009 before the Chief Commissioner of Income Tax for the assessment year 2007-08, 2008-09 and 2009-10, which was moved through the Commissioner of Income Tax, Central, Kanpur. All the aforesaid applications for approval of exemption for the assessment years 2003-04 upto 2009-10 remained pending.

(3.) For the assessment year 2010-11, the petitioner filed an application dated 24th March, 2010 before the Director General of Income Tax (Investigation), Lucknow for exemption under Section 10(23C)(vi) of the Act. This application was rejected by the impugned order dated 31st March, 2011.