Rajasthan Technical University vs Income Tax Officer

Narendra Kumar Jain-I, J.—Heard learned counsel for the petitioner. Petitioner has preferred this writ petition challenging impugned order dated 26.07.2011(Annexure-3), whereby Respondent No. 1, income tax Officer has over-ruled the objection of the petitioner that petitioner-University is exempted u/s 10(23C) (iiiab) of the Income Tax Act, 1961(for short ''the Act'') and has directed the petitioner to file copy of income tax return and audit report for the year under consideration.

From the submission, pleadings and documents enclosed with the writ petition, it appears that for assessment year 2007-08, a notice dated 08.07.2011(Annexure-2) was given to petitioner-University. The petitioner filed its reply/objection petition dated 12.07.2011(Annexure-7), seeking exemption from the applicability of the Act u/s 10(23C)(iiiab) of the Act. Learned Income Tax Officer vide its order dated 26.07.2011 came to a conclusion that the petitioner is not exempted u/s 10 (23C)(iiiab) of the Act. Para 3 of the order is reproduced as under:

Point-wise reply on the issue raised vide your written submission are as under-

(i) There is no dispute on the objects of the society.

(ii) The University was required to get approval u/s 10(23C) of the Income Tax Act, 1961, as the University is not wholly or substantially financed by the Government and is therefore, not exempt u/s 10(23C)(iiiab). This issue is clear from table, which specify the receipts from affiliated colleges and students and the grants received by the University from the Government-

Table is enclosed as Annexure-A in separate sheet

It is clear from the table that the University is neither wholly nor substantially financed by the Government as the grant of the government over total receipts of the university is ranging from 0.28% to 27.51% in F.Y. 2006-07 to 2010-11. Hence it cannot be said that the university is wholly or substantially financed by the government. It is an autonomous institute substantially financed by the examination fee etc. received from affiliated colleges, students studying in the university etc. Hence, it is not exempt u/s 10(23C)(iiiab) of the Income Tax Act, 1961. Consequently income of the assessee is taxable.

Hence your reply is not proper on this issue.

Submission of learned counsel for the petitioner is that reasons assigned by the Income Tax Officer for not accepting the objection of the petitioner are illegal and without jurisdiction, therefore, this Court should interfere in the said order and quash the same.

I have considered the submission of learned counsel for the petitioner and examined the impugned notice(Annexure-2), objection petition of the petitioner (Annexure-7) and the impugned order dated 26.07.2011(Annexure-3).

It appears that impugned order dated 26.07.2011 is only an interim order. Income Tax Officer will now pass the final order u/s 143(3) read with Section 147 of the Act and as admitted by learned counsel for the petitioner, the said order will be appealable before appellate authority. Submission of learned counsel for the petitioner is that impugned order is final and the same cannot be challenged in any other proceedings, except by way of this writ petition.

The submission of learned counsel for the petitioner is not correct and tenable. Every interim order, passed by any Quasi-Judicial Authority or the Court, can always be challenged in regular appeal filed against final order, therefore, as and when an assessment order u/s 143(3) read with Section 147 of the Act is passed against the petitioner, then the petitioner will have a right to file appeal against final order and in the said appeal, the petitioner will be entitled to challenge the impugned order dated 26.07.2011 also. Ordinarily, interim order cannot be allowed to be challenged at every stage, like present one. The petitioner will have a right to challenge the impugned order in regular appeal against final order, in case, necessity so arises. With the aforesaid observation and liberty, writ petition stands disposed of.