9911796707
TMI Blog2003 (4) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the building for the years 1977-78 to the present day. 2. Prior to 1994, house tax in respect of properties in Delhi was imposed under the Punjab Municipal Act, 1911. The Punjab Act was repealed by the New Delhi Municipal Council Act, 1994 (briefly the NDMC Act) as far as New Delhi is concerned with effect from the day that the respondent No. 1 Council was established under Section 3 read with Section 416(1) of the latter Act. According to the appellant it had till that time, paid some amounts of money towards the demands raised by the respondent No. 1 on account of property tax and had also applied to the respondents for grant of exemption. According to the appellants, there was no response to the appellants representation. The appellant filed a Writ Petition before the High Court at Delhi specifically impugning two bills raised by the Municipal Corporation dated 20.7.90 and 31.5.91 which were for the sums of Rs. 69,14,792.71 and Rs. 6,13,492 respectively. Interim protection was given tot he appellant No. 1 by the High Court and the demands were stayed. The appellant then filed eight more writ petitions before the High Court questioning the subsequent demands on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that "the user of the income from the building is wholly irrelevant for the purposes of grant to a building". The claim of the society was rejected because it was said that to accede to the claim would have far reaching consequences. It was said that although the income may get exemption in income tax but in the Municipal Act, there is no such concept of granting exemption to the property just because that income is being utilised for charitable purposes". Decisions of the Delhi High Court and of this Court were considered in coming to the conclusion that no exemption for the portion in occupation of the tenants is available as the portions were not used for charitable purposes. An apprehension was expressed that if the interpretation sought to be placed by the appellant society were accepted, then any society could claim exemption on the ground that rental income would be used for charitable purposes. This, according to the Assistant Secretary, was not the intention of the (SIC). According it was held that no exemption could be granted under Section 62(1)(a) read with Section 62(2) in respect of the portion of the building which had been rented out by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 20th August 2001 have been brought on record. An order passed by the Advisor (Revenue) of the NDMC dated 22nd March 2002 limited to the question of fixation of the rateable value of the rented portion for the purposes of house tax has also been brought on record. The order records that the self-occupied portion of the building has been exempted from payment of property tax. However, it is clear from the body of the order, that it was not passed in response to the appellant's application for grant of exemption to the appellant under the provisions either of the Punjab Act or the NDMC Act. 9. Under the Punjab Act, the tax on all property was imposed under Section 61. The statute itself did not allow for any specific exemption in respect of any class of property and left it to the discretion of the Committee or the State Government to grant exemption in the circumstances prescribed. The "Committee" has been defined in Section 3(4) as the Municipal Council or a Nagar Panchayat, as the case may be constituted under Section 12 of the Act. Section 70 of the Punjab Act provided for the 'Power of the Committee in regard to taxes'. Sub-section (2) of Section 70 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ldings vested in the Council in respect of which the said tax, if levied, would under the provisions of this Act be leviable primarily on the Council; (c) agricultural lands and buildings (other than dwelling houses). (2) Lands and buildings or portion thereof shall not be deemed to be exclusively occupied and used for public worship or for a charitable purpose within the meaning of Clause (a) of Sub-section (1) if any trade or business is carried on in such lands and buildings or portion thereof or if in respect of such lands and buildings or portions thereof, any rent is derived. (3) Where any portion of any land or building is exempt from the property tax by reason of its being exclusively occupied and used for public worship or for a charitable purpose such portion shall be deemed to be a separate property for the purpose of municipal taxation." 12. If one analyses the relevant clauses of Section 62(1), lands and buildings or portions of lands and building are exempt from property tax if they are: (i) exclusively occupied by a society or body for a charitable purpose; (ii) such society or body is supported wholly or in part by voluntary contributions; (iii) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upied by the Trust was rented out to a Press. The Municipal Corporation had sought to levy property tax under the Delhi Municipal Corporation Act, 1957 in respect of the entire premises. The Trust filed a writ petition claiming total exemption from payment of property tax under Section 115(4) of the 1957 Act before the High Court at Delhi. The writ petition was allowed by the learned Single Judge who held that the Trust was entitled to claim total exemption from payment of tax under Section 115(4) of the 1957 Act except in respect of that portion which was rented out. However, the learned Judge held that even from the rental value, the Trust was entitled to claim exemption in the proportion of the income accruing to it from the publication of children's book which was held to be a charitable purpose. The Division Bench partly allowed the Municipal Corporation's appeal holding that in view of the mandatory provisions of Section 115(4) of the New Delhi Corporation Act, exemption from the payment of property tax could not be allowed in respect of the area which was rented out or not occupied by the Trust itself for charitable purposes within the meaning of the 1957 Act. The fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Children Book Trust made an observation that: ".....if the profits or income of trade or business is devoted to a charitable purpose and no part thereof is distributed among the members as dividends or bonus, then that trade or business is a means to an end. It is charity. But, if there is a trade or business carried on in a land or building and its profits are not applied to a charitable purpose, Sub-section (6) says that that part of the land or building where a trade or business is carried on or from which rent is derived, will be subject to tax." 17. However, these observations were made in the context of Section 115(4) [Section 62(1) of the NDMC Act)] which envisages societies occupying the subject premises, making profit or deriving income. The proviso to Sub-section 4, Clause (a) requires such profits or income to be utilised in promoting the objects of the society and not to be paid by way of dividend or bonus to the members of the society. It was in that connection that the Court made the observation quoted above. The observation would not be relevant to a situation where property is not in occupation of the Society at all but is rented out. 18. Coming to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
