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Issues Involved:
1. Exemption from property tax for a charitable organization. 2. Applicability of the Punjab Municipal Act, 1911 versus the New Delhi Municipal Council (NDMC) Act, 1994. 3. Interpretation of Sections 60, 61, and 62 of the NDMC Act. 4. Grant of exemption for self-occupied versus rented portions of the property. 5. Authority and discretion under the NDMC Act to grant exemptions. Issue-wise Detailed Analysis: 1. Exemption from Property Tax for a Charitable Organization The appellant, a charitable organization, sought exemption from property tax for its building, arguing that the rent derived from the rented portions was utilized for charitable purposes. The appellant relied on the precedent set by the Supreme Court in Municipal Corporation of Delhi v. Children Book Trust, asserting that the entire building, including rented portions, should be exempt from property tax. 2. Applicability of the Punjab Municipal Act, 1911 versus the NDMC Act, 1994 Before 1994, property tax in Delhi was governed by the Punjab Municipal Act, 1911. The NDMC Act, 1994, replaced the Punjab Act for New Delhi. The appellant had previously been granted exemption under the Punjab Act for the self-occupied portion of the building, but no application for exemption was made for the years 1991-92 to 1993-94. The Assistant Secretary (Tax) examined the claim for exemption under both Acts and found that the exemption granted under the Punjab Act was limited to the self-occupied portion. 3. Interpretation of Sections 60, 61, and 62 of the NDMC Act Section 62(1) of the NDMC Act exempts lands and buildings used exclusively for charitable purposes from property tax, provided the organization is supported by voluntary contributions and does not pay dividends or bonuses to its members. However, Section 62(2) specifies that if any portion of the property is rented out, it does not qualify for exemption. The court clarified that the statutory exemption under Section 62(1) is a matter of right for self-occupied portions used for charitable purposes, but not for rented portions. 4. Grant of Exemption for Self-Occupied versus Rented Portions of the Property The Assistant Secretary granted exemption for the self-occupied portion of the building for the period 1991-92 to 2000-2001, provided the appellant continued to be supported by voluntary contributions and did not generate surpluses year after year. However, the claim for exemption for the rented portion was rejected, as the NDMC Act does not allow exemption for properties from which rent is derived, even if the income is used for charitable purposes. 5. Authority and Discretion under the NDMC Act to Grant Exemptions The appellant argued that the power to grant exemption had not been properly exercised by the respondent under Section 124 read with Section 72(e) of the NDMC Act. The court held that Section 72(1)(e) allows the Chairperson to amend the assessment list to reflect exemptions but does not confer discretion to grant exemptions. Section 124 empowers the Council to exempt classes of persons or properties by resolution, not individual cases. The court dismissed the appellant's claim for statutory exemption for the rented portion but allowed the appellant to apply to the Council for exemption under Section 124. Conclusion: The court dismissed the appellant's appeal for statutory exemption under Section 62 of the NDMC Act for the rented portion of the building. However, it granted the appellant the liberty to apply to the Council for exemption under Section 124, which allows the Council to exempt classes of persons or properties. The Council must dispose of the appellant's representation after providing an opportunity to be heard. There was no order as to costs.
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