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The Commissioner of Income Tax Versus The Commissioner Corporation of Chennai

Demand the property tax for the buildings used by the petitioner Department which is owned by the President of India - Held that:- A clear exemption being granted, the levy or collection of property tax by the respondent Corporation on the buildings owned by the Union of India is unauthorised and illegal. Therefore, if any such tax have been collected, the same requires to be refunded. So far as the service charges are concerned, it seems that the Union of India had already agreed before the Hon .....

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ounsel replied by stating that there is no dispute to the said fact and the petitioner themselves have stated so in their letter dated 28.01.2009 stating that they are paying service charges to the Corporation of Chennai, half yearly, based on 33 1/3% of the property tax. Therefore, this submission is taken on record to state that there is no default on the part of the petitioner in remitting the service charges. - In the light of the above stated legal position, the writ petition is dispose .....

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petition is closed. No costs. - W.P.No.6164 of 2009, M.P.No.1 of 2009 - Dated:- 11-8-2016 - T. S. Sivagnanam, J. For Petitioner : Mr.T.Ravikumar For Respondent : Mr.K.Soundararajan ORDER Heard Mr.T.Ravikumar, learned counsel appearing for the petitioner and Mr.K.Soundararajan, learned Standing counsel appearing for the respondent Corporation. 2. The petitioner in this writ petition is the Commissioner of Income Tax, Chennai and the challenge is to the order passed by the respondent Corporation w .....

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ding payment of property tax. However, at the relevant point of time viz., 2007-08, it appears that based on some circular which was prevailing during the said period and on certain advice, some amounts were remitted by the petitioner Department. But the respondent Corporation has received those amounts and issued receipts as if they were remitted towards the payment of property tax. 4. The petitioner addressed the respondent by letter dated 28.01.2009 stating that the Income Tax Department is p .....

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and Accounts Office have raised an objection and therefore, the petitioner requested that no demand need be raised in respect of the aforesaid building and if already raised may kindly be kept in abeyance. 5. In response to the said communication, the impugned letter has been sent by the Assistant Revenue Officer of the Respondent Corporation stating as if they have collected the amount as Service Charges [wrongly mentioned as Service Tax]. 6. The learned counsel for the petitioner invited the a .....

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ce Charges in respect of all the buildings and there is no dispute on the said fact. 7. Though the respondent Corporation have been served and they have entered appearance through a counsel, till date no counter affidavit has been filed. However, the learned Standing Counsel appearing for the respondent on instructions from the officials present in the Court submits that though the receipts are property tax receipts, what was collected from the petitioner was only the service charges and only th .....

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ned by the Union. 9. In the case of Municipal Corporation, Amritsar (Supra) the postal department was served with demands by the Corporation calling upon them to clear the arrears of property tax. The similar stand as taken in this writ petition was taken by the Posts and Telegraphs Department stating that in terms of Article 285(1) of Constitution of India, properties are exempt from tax. In fact in the said case, the question was whether the demand so made was by way of Service charges or tax .....

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the Constitution, clause (2) of Article 285 was not attracted and the Municipal Corporation was restrained from demanding tax by way of service charges from railways. 11.More recently in the case of Rajkot Municipal Corporation and others v. Union of India reported in (2013) 14 Supreme Court Cases 599, similar issue arose and ultimately an agreement was arrived at between the parties where the Union of India agreed to certain aspects. At this stage, it would be useful to refer to few of the con .....

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rty tax levied on private owners, depending upon whether the Union of India or its department is utilising the full services, or partial services or nil services. The Union of India represented by its department concerned will enter into agreements/understandings in regard to service charges for each of its properties, with the respective municipal corporation. 12. It is further brought to the notice of this Court that identical issue came up for consideration before this Court when the Corporat .....

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