TMI Blog2009 (7) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... ARNIK JJ. S. G. Dastur with K. B. Bhujle for the petitioner. B. M. Chaterjee with Y. Patki and P. S. Sahadevan for the respondents. JUDGMENT The judgment of the court was delivered by 1. <!--?xml:namespace prefix = st2 ?--> FERDINO I. REBELLO J.- Rule. By consent of the parties, heard forthwith. 2. The petitioner is a public trust whose sole activity is of running educational institutions. Up to the assessment year 1988-89, the income of the petitioner was exempted under section 10(22) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). Section 10(22) was omitted by Finance (No. 2) Act, 1998, with effect from April 1, 1999, i.e., from the assessment year 1999-2000 and the exemption for the income of an educational institution like the petitioner-trust was provided in the amended section 10(23C)(vi). The said section 10(23C)(vi) of the Act, as applicable for the assessment year 1999-2000, reads as under : "10. Incomes not included in total income.-In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- . . . (23C) any income received by any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed not be set out including those which have been incorporated pursuant to the amendment allowed by this court by an order dated March 26, 2009. 7. Though various contentions have been raised on behalf of the petitioner, it is pointed out that the order passed by the first respondent is without jurisdiction and consequently on this point alone the petition has to be allowed and the order is liable to be set aside and the matter remanded for consideration by the prescribed authority, which, according to the petitioner, is the Central Board of Direct Taxes and not respondent No. 1, i.e.) Director General of Income-tax (Investigation), Pune. 8. Replies have been filed on behalf of the respondents. The passing of the impugned order was justified. By our order dated June 22, 2009, after hearing the parties, the court had directed the respondents to clarify as to who is the prescribed authority. Pursuant to that, an affidavit has been filed by Mr. Dharamchand Nemichand Parikh, Deputy Director of Income-tax (Investigation) (H. Qrs.), Pune. Reliance is placed on rule 2CA of the Income-tax Rules, 1962. Reliance is also placed on a notification dated May 30, 2007. Based on the Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad-IV, Ahmedabad; (ii) for cases falling in the jurisdiction of Director of Income-tax (Exemption), Bangalore the prescribed authority shall be Chief Commissioner of Income-tax, Bangalore-I Bangalore ;" 11. From a reading of rule 2CA of the Rules, it would be clear that in respect of application received prior to April 3, 2001, the prescribed authority under sub-clauses (vi) and (via) of clause (23C) of section 10 of the Act shall be the Central Board of Direct Taxes constituted under the Central Board of Revenue Act. In section 10(23C), the expression used is "prescribed authority". Prescribed authority is not defined under the Act. Under the Rules framed the prescribed authority has been defined for the purpose of sub-clause (vi) and (via) as the Chief Commissioner or Director General, and in respect of applications received prior to April 3, 2001, as the Central Board of Direct Taxes. There is also a proviso to rule 2CA(1A) which sets out that in respect of application received prior to April 3, 2001, where no order has been passed granting approval or rejecting the application as on May 31, 2007, the prescribed authority under sub-clauses (vi) and (via) of clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only argument advanced on behalf of the respondents has been that if the notification of May 30, 2007, is considered, it would be clear that the Central Board of Direct Taxes has authorised the Chief Commissioner or the Director General. It is the submission on behalf of the respondents that there is delegation of powers by the Central Board of Direct Taxes in favour of the Director General. Let us examine the said contention. 15. The Rules made are pursuant to the power conferred on the Central Board of Direct Taxes under section 295 of the Act. The Rules so made, in so far as section 10(23C)(via) is concerned, have defined the "prescribed authority" in respect of applications made prior to April 3, 2001, and which were not disposed of by May 31, 2007, as the Central Board of Direct Taxes. The notification issued on May 30, 2007, would be referable to rule 2CA (1) which has notified the Chief Commissioner or the Director General, generally, i.e., without any territorial jurisdiction. There are several Chief Commissioners or Directors General for various commissionerates or areas throughout India. The notification only spells out which of the Directors General or Chief Co ..... 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