High Court Of Delhi
Director Of Income Tax vs. Raunaq Education Foundation
Section 10(22)
Asst. Year 1987-88, 1998-99
Madan B. Lokur & V.B. Gupta, JJ.
IT Appeal No. 1318 of 2006
30th April, 2007
Counsel Appeared
Ms. P.L. Bansal, for the Appellant : Anoop Sharma with Manu Giri, for the Respondent
JUDGMENT
MADAN B. LOKUR, J. :
The Revenue is aggrieved by an order dt. 6 Jan., 2006 passed by the Tribunal, Delhi ‘A’ Bench, in ITA No. 2590/Del/2002, relevant for the asst. yr. 1987-88 and ITA No. 2591/Del/2002, relevant for the asst. yr. 1998-99. The sole question that has arisen in this appeal is whether the assessee who is entitled to exemption under s. 10(22) of the IT Act, 1961, can claim the benefit thereof for the purpose of income deemed to be chargeable to tax under s. 68 of the Act. ?
According to the AO, the undisclosed income could not be exempted under s. 10(22) of the Act and the CIT(A) upheld the view taken by the AO. On further appeal, the Tribunal considered the provisions of ss. 4 and 5 of the Act r/w s. 2(24) and 2(45) as well as s. 10(22) of the Act and came to the conclusion that the use of the word ‘income’ in sub-s. (22) of s. 10 of the Act is wide enough to include deemed income under s. 68 of the Act. Learned counsel for the assessee has drawn our attention to Orissa State Warehousing Corporation vs. CIT (1999) 153 CTR (SC) 177 : (1999) 237 ITR 589 (SC), wherein the Supreme Court has interpreted s. 10(29) of the Act which uses the expression ‘derived from’ which expression is missing in s. 10(22) of the Act. The Supreme Court held that the expression ‘derived from’ is intended to give a restrictive meaning to the word ‘income’ as used in s. 10(29) of the Act and, therefore, proceeding on that basis, the Supreme Court decided against the assessee. We find that the words ‘derived from’ (or some other similar words) do not occur in s. 10(22) of the Act and, therefore, the word ‘income’ as occurring in s. 10(22) cannot be given restrictive meaning and must be given its natural meaning or the meaning ascribed to it in s. 2(24) of the Act.
It is well-settled that exemption provision must be strictly construed but when it is found that an exemption is available then it must be given its full play. This has recently been held by the Supreme Court in P.R. Prabhakar vs. CIT (2006) 204 CTR (SC) 27 : (2006) 284 ITR 548 (SC) in the following words : “It is now a well-settled principle of law that although the exemption provisions are to be construed strictly as regards the applicability thereof to the case of the assessee, once it is found that the same is applicable, the same are required to be interpreted liberally. [See Tata Iron & Steel Co. Ltd. vs. State of Jharkhand (2005) 4 RC 641; (2005) 4 SCC 272; Government of India vs. Indian Tobacco Association (2005) 5 RC 379; (2005) 7 SCC 396 and CCE vs. Hira Cement (2006) 6 RC 219; (2006) 2 JT 369 (SC)]. It is also trite law that an exemption is to be granted unless it is expressly taken away. [See Adityapur Industrial Area Development Authority vs. Union of India (2006) 5 Scale 321].”
8. In view of the above, we do not find any infirmity in the decision of the Tribunal. No substantial question of law arises for consideration. Dismissed.
[Citation : 294 ITR 76]
