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2018 (5) TMI 440 - HC - Income TaxExemption of State Bar Council of Madhya Pradesh under Section 10(23A) - applicability to State Bar Council of Chhattisgarh - Held that:- The notification dated 9-8-1966 is a law within the meaning of Section 2(f) of the Act of 2000 which was in existence in the erstwhile State of M.P. exempting the State Bar Council of Madhya Pradesh under Section 10(23A) of the IT Act and would also be applicable to the State Bar Council of Chhattisgarh till it is modified or altered by the competent authority by virtue of the provisions contained in Sections 78 and 79 of the Act of 2000. In present case, it is quite vivid that the notification dated 9-8-1966 issued by the Central Government exempting the State Bar Council of M.P. from taxation of income other than those specifically excluded under Section 10(23A) of the IT Act, was applicable and was in force in the new State of Chhattisgarh with effect from 1-11-2000 and would fall within the meaning of law under Section 2(f) of the Act of 2000 and by virtue of that, the State Bar Council of Chhattisgarh was entitled to have exemption under Section 10(23A) of the IT Act from the operation of IT Act, but that was not understood properly by the Income Tax Authorities and holding that the petitioner Council is not entitled for the said exemption, the petitioner Council was assessed to income tax imposing tax liability to the extent indicated herein-above ignoring the law in force at the time of assessment and the order of recovery was passed. Petitioner Council was entitled and eligible to be exempted by virtue of the notification dated 9-8-1966 read with Sections 2(f), 78 and 79 of the Act of 2000 with effect from 1-11-2000, as it was not modified or altered by the Central Government upon reorganisation of the State of Chhattisgarh with effect from 1-11-2000 by the Act of 2000 and therefore the assessing authority has committed grave jurisdictional error in not holding so and proceeded to assess the tax liability of the petitioner Council under the IT Act
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