National Horticulture Board vs Chief Commissioner of Income Tax

This petition seeks quashing of order dated 26-3-2008 passed by the Chief Commissioner of Income Tax, Haryana Region, Panchkula rejecting the application of the petitioner u/s 10(23C)(iv) of the Income Tax Act, 1961 (for short, "the Act").

Case of the petitioner is that the petitioner-Board has been set up by the Government of India as an autonomous society under the Societies Registration Act, 1860 to promote integrated development in Horticulture. The petitioner was exempt u/s 10(23C)(iv) of the Act in the years from 1987-88 to 2007-08 and was also registered as a trust u/s 12A of the Act. After amendment of Section 10(23)(iv) of the Act on 30-3-2007, the authority to grant exemption was vested in Chief Commissioner instead of Central Government and the petitioner made an application to the said authority. The Chief Commissioner dismissed the application on the ground that audit reports in Form No. 10BB were not filed with the returns and the same were filed later, but were not dated as required under 10th proviso of the said provision.

Learned counsel for the petitioner submits that the requirement of the proviso in question has been substantially complied with. The procedural requirement of the audit report being filed along with the returns cannot be so strictly construed as to defeat the very object for which the provision has been enacted. No prejudice whatsoever is caused, if a report not filed with the return but filed separately is also taken into account.

We find merit on the contention raised.

The view taken in the impugned order is highly technical. The provision having been substantially complied with, the audit report should have been taken into account even if, strictly speaking, it was not filed with the return and not in Form 10BB but in Form 10B as stated in the impugned order. This made no difference to the spirit of the requirement laid down.

Accordingly, we allow this petition and quash the impugned order Annexure P-l and direct respondent No. 1 to take a fresh decision in accordance with law, within one month from the receipt of a copy of this order.

The petition is disposed of.