TMI Blog2005 (3) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... 1941. By a deed, the appellant-Trust declared and affirmed to be a public trust with charitable or religious objects. The State of Tamil Nadu issued G.Os being G.O.Ms. No. 1947 dated 17.9.1976, 2056 dated 4.10.1976 and 2625 dated 27.12.1976 respectively declaring the norms for exemption from the payment of Urban Land Tax under the Act. The said G.O. stipulated that all institutions recognized as charitable institutions under the Indian Income Tax Act will be dealt as such under the Act. It is also stipulated that exception is to be given if the income is used solely for the objectives and purpose of the Trust. It is pertinent to notice that the appellant-Trust was recognized as a public charitable trust under Section 12A(a) of the Income Tax Act vide order 29.4.1977 passed by the Income Tax Appellate Tribunal. In this context, it is pertinent to notice that the appellant claims exemption of the land held by it for the period from 1965 to 1976 from the payment of urban land tax under the Act. Since the order was passed on 29.4.1977 by the Income Tax Appellate Tribunal recognizing the appellant-Trust as a charitable Trust under Section 12A(a) of the Act, the appellant cannot clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Appeal No. 1190 of 1999 along with C.M.P. No. 11716 of 1999 which was again dismissed by the Division Bench on 30.7.1999. Aggrieved by that, the appellant preferred the special leave petitions on 16.12.1999 and this Court granted leave on 11.2.2000. We heard Mr. Uday U. Lalit, learned senior counsel appearing for the appellant-Trust and Mr. S. Balakrishnan, learned senior counsel appearing for the respondents. Leaned senior counsel appearing for the appellant invited our attention to the orders passed in various writ petitions, the Government Orders and also of the impugned orders and the orders passed by the authorities rejecting the claim for exemption. He submitted that the appellant-Trust was entitled to exemption from paying urban land tax as it met the criterion laid down in the Government Order G.O.Ms. No. 2625 (Rev) dated 27.12.1976, which clearly stated that all institutions recognized as charitable institutions under the Income Tax Act will be dealt as such for the purpose of concessions under the Act. He would further submit that the High Court has failed to appreciate that the entitlement to exemption from paying urban land tax should have been decided in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant-Trust itself requested for the disposal of its application in terms of the judgment and order dated 18.4.1988 passed by the learned single Judge of the High Court and thereafter the respondents asked the appellant to make the fresh application along with audited statements. Unfortunately, the subsequent G.O. Ms. No. 1834(Rev) dated 29.10.1983 was not brought to the notice of the learned single Judge while disposing of writ Petition No. 1562 of 1982. The authorities while considering the claim for exemption as per the orders of the Court considered all the earlier G.Os and G.O.Ms. No. 1834(Rev) dated 29.10.1983 and rejected the claim for exemption made by the appellant. G.O. Ms. No. 1834(Rev) dated 29.10.1983 was already in existence when the authorities considered the application on 4.10.1988 for claim for exemption and rejected the same by a detailed order. The contention of the learned senior counsel appearing for the appellant that the criteria laid down in G.O. Ms. No. 2625 (Rev) dated 27.12.1976 alone should have been taken into consideration and not the other G.Os has no force since while construing the claim, after remand, the authorities are under obligation to cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above concessions. These concessions will now be given with retrospective effect from the Faslis from which such exemption has been prayed for by the respective institutions provided that there will be granted as provided for in the G.O. first cited on specific application to Government and on the basis of the recommendation of the Empowered Committee. It is seen from the above G.O. that the total exemption from payment of urban land tax be given to all educational, religious charitable and philanthropic institutions in respect of vacant land and land on which buildings have been constructed from which the institutions derive income which is being used solely for their objectives and purposes. The G.O. further stipulates that if there is violation in the use of or diversion of the income derived from the urban land, the full urban land tax is to be levied as provided for in the Act. The G.O. further states that these concessions will now be given with retrospective effect from the Faslis from which such exemption has been prayed for by the respective institutions provided there will be granted as provided for in the G.O. first cited that is G.O. Ms. No. 1947 (Rev) dated 17.9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of exemption to the religious charitable trust etc. In this context, it is useful to see the order dated 4.10.1988 passed by the Commissioner and Secretary to the Government, Revenue Department. A detailed order was passed by the Commissioner and Secretary to the Government of T.N. It is useful to reproduce paragraph 3 of the said order which reads as under: Section 29(k) of the Tamil Nadu Urban Land Tax Act, 1966 provides for grant of exemption to any Urban land actually used for religious, charitable or philanthropic purposes by such religious, charitable or philanthropic institutions but not including any Urban Land owned by such institutions and (i) which is vacant or (ii) in which buildings, from which income is derived, have been constructed. While examining the instant case with reference to above Section, it is seen that the trust owns 62 grounds and 2243 sq. ft. of Urban lands in Tondiarpet, T. Nagar and Thiruvottiyur Villages. The whole extent is assessed to Urban Land tax, for which it has sought exemption. The Urban lands in Tondiarpet Village are used for running cinema theatre, saw mill, godown etc. and the lands in T.Nagar and Thiruvottiyur villages are used a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the years 1976-77, 1977-78 and 1978-79 it has spent only 9.9%, 49.5% its net income for its objectives. ii) The whole extent of the lands are used for commercial and residential purposes. No piece of land is used for the charitable purpose. Further it has not produced any evidence to show that the income is spent for the objectives and purposes of the Trust. iii) Though the Trust has satisfied one of the norms that it has been recognized as a charitable institution under Section 12a(a) of the Income Tax Act, 1961 it has no binding force to exempt the lands owned by the Trust from the provisions of the Urban Land Tax Act also. iv) Further the lands owned by the Trust are not eligible for grant of exemption under Section 29(K) of the Act since the buildings are used as Cinema Theatre, Saw Mills, Godowns and let out for commercial/residential purposes. v) The Trust is also not eligible for grant of exemption Under Section 27(1) (Hardship clause) of the Act, because the lands are used for running cinema theatre, saw mill, godowns and let out for commercial/residential purposes and it derives a large income from the lands. Hence it has no undue hardship to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case and the Government is precluded from relying on the said G.O. The said ground is taken for the first time only in this Court saying that the entitlement from exemption should have been decided in accordance with law that existed in the assessment year for which the exemption was sought and not in accordance with any subsequent Government Order. Ground No. 12 taken in the writ appeal needs special mention in this context which reads as follows: In any event, the learned judge ought to have permitted the appellant to satisfy the requirements of G.O. Ms. 1834 Revenue dated 29.10.1983 as submitted as an alternative prayer by the appellant s counsel during the course of his arguments. In the matter of exemption, under the provisions of Tamil Nadu Land Tax Act, there is a marked difference between Sections 27 and 29 of the Act. Sections 27 and 29 of the Act read as under: 27. Power of Government to exempt or reduce urban land tax.- (1) The Government, if satisfied that the payment of urban land tax in respect of any class of urban lands or by any class of persons will cause undue hardship, they may, subject to such rules as may be made in this behalf, by ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot including any urban land \026 (a) which is vacant, or (b) in which buildings, from which income is derived have been constructed. Explanation .- For the removal of doubts, it is hereby declared that the urban land on which staff quarters including nurses quarters or any other buildings directly connected with the purposes of the said hospitals have been constructed shall be deemed to be urban land used for purposes directly connected with the said hospitals; (e) any urban land solely used for purposes connected with the disposal of the dead; (f) roads or urban lands used for communal purposes; (g) any urban land used for public purposes, provided that no rent is charged for, or no remuneration is derived from, such user; (h) any urban land used by schools, colleges or universities for purposes directly connected with education, but not including any urban land owned by such educational institutions and \026 (i) which is vacant, or (ii) in which buildings from which income is derived have been constructed. Explanation I.- For the purposes of this clause, schools or colleges shall mean only such schools or colleges which are educational institution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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