(Prayer: Petition filed under Article 226 of The Constitution of India praying for the issuance of Writ of Certiorarified Mandamus calling for the records of the first respondent in his file No.HQ 30(31)/CCIT-VI/2011-12 dated 30.9.2011 and quash the impugned order with a direction to the first respondent pass an order in accordance with law.)
1. The petitioner is the Project Implementation Agency (in short 'Agency') set up under the aegis of the Government of Pondicherry under Government Order Ms.No.57 dated 27.04.2005. The Agency was set up to address and resolve the delirious effects and consequences of the Tsunami that had struck the Indian coast on 26.12.2004, leaving lakhs of persons in need of rehabilitation. It was thus that the Society was constituted comprising almost wholly of officers of the Government of Pondicherry.
2. The main objects of the Agency are as follows:
'i. Carrying out (i) repair and reconstruction of houses which have been damaged or by tsunami, and (ii) construction of new houses in resettlement areas; through, inter alia, provision of financial assistance to beneficiaries, public construction and public-private partnerships; and
ii. Provision of facilities and amenities related to housing construction and reconstruction, comprising, inter-alia, access road, internal roads, water connections, latrines, storm drains, electrification, rainwater harvesting structure and other community infrastructure facilities.
ii. Resettlement of people affected families through inter alia, construction of new house and provision of related facilities and amenities.
iv. Carrying out a program to revitalize the livelihoods of tsunami affected families engaged in the fisheries infrastructure through, inter alia, repair of harbours, repair or acquisition of patrol boats, clearing of bar mouth and estuaries, and provision of aqua culture infrastructure; and (b) re-establishment of safety-at-sea system and services.
v. Carrying out a program to revitalize the livelihoods of tsunami affected families engaged in agriculture, horticulture and livestock through, inter alia, (a) restoration and reclamation of damaged agriculture and horticulture lands, farm ponds, and dug wells; (b) repair and reconstruction of damaged infrastructure and up gradation of veterinary care services; and (c) promotion of sustainable management of coastal land and water resources.
vi. Carrying out a program for technical assistance and capacity building for housing reconstruction program in the several areas including preparation of housing designs, land management; resettlement planning, land use zoning and demarcation and training masons.
vii. Carrying out a program for (A) engaging the tsunami affected communities, especially the most vulnerable groups, in planning, deciding and implementing the housing reconstruction program and the livelihood restoration program and (B) developing and strengthening mechanisms for communication, transparency and grievance redress.
viii. Carrying out studies for assessment of the vulnerabilities and longer term issues and the needs associated with coastal zone protection and hazard risk management, and especially the vulnerabilities with Pondicherry and Karaikal regions in Union Territory of Pondicherry.
ix.(A) Carrying out studies for (i) developing fisheries policy, and (ii) identifying possible new forms of livelihood support in coastal villages and training programs required for undertaking such new forms of livelihood support; and (B) Conducting training programs so identified.
x. Carrying out a program to assist in project management and supervision through, inter alia, undertaking technical and financial audits, quality assurance reviews, and continuous environmental and social assessment.
xi. Provision of office equipment, furniture and vehicles to assist in implementing the objectives.'
3. The modus operandi followed by the Society is that Government Orders are periodically issued, for the disbursal of funds sanctioned and granted by the World Bank through the Government of India as well as deploying funds granted by the Central Government and the Pondicherry Government, of their own.
4. The initial grant was a sum of Rs.1.00 Crore received from the Government of Pondicherry under G.O.Ms.No.87 dated 20.07.2005. This Government Order prescribed the norms and conditions under which the activities would be carried out. The periodic grants addressed specific requirements towards rehabilitation of affected people and re-constitution/revitalisation of the affected areas. A perusal of the various Government Orders circulated show that the Government was identifying such specific needs, on an evolving basis, such as, (i) construction of disaster relief centres, (ii) construction of Taluk Offices to liason between the Government and people for ensuring that the funds deployed are utilised in the best possible manner, (iii) towards Grants-in-aid for various miscellaneous works in connection with Tsunami, (iv) for the construction of Anganwadi Buildings destroyed by the Tsunami, and many others.
5. The provisions of Section 10(23C)(iv) of the Income Tax Act, 1961 (in short 'Act') entitle a fund or an institution established for charitable purposes approved by the prescribed authority to exemption in regard to its income, having regard to the objects of such fund or institution and its importance throughout India or throughout the States of India.
6. The petitioner sought exemption under the aforesaid provision in respect of the incomes granted to it for deployment and use in rehabilitation of Tsunami affected persons. Initially applications for the years 2006-07 to 2009-10 were rejected on the ground that the same were belated, having been filed on 24.03.2010. Condonation was sought from the Central Board of Direct Taxes in terms of Section 119(2)(b) of the Act and the delay in filing of the applications condoned by the Board. Thereafter, the petitioners' applications for the periods 2006-07 to 2009-10 as well as for the period 2010-11 seeking recognition under Section 10(23C)(iv) of the Act were taken up for consideration. The Chief Commissioner of Income Tax, (R1) while considering the applications has undertaken an analysis of the tender notices/work orders issued, coming to the conclusion that substantial expenditure appear to have been, in his view, expended on work other than Tsunami relief/rehabilitation work. The nature and classification of the work as detailed by him is as follows:
Nature of Work
1. Filling the low lying sire at RS.No.9/6, Reddiyarpalayam Revenue Village, Pondicherry, the sire for construction of State Level Emergency Operation Centre at Puducherry.
2. Construction of 8 class rooms in Government Girls High School, Kalaapet, Puducherry.
3. Construction of District Level Emergency Operation Centre and Additional Office Accommodation for Revenue Department, Puducherry.
4. Construction of Anganwadi Centre building (2 Nos) (Zone-II & III) at Kalapet for Department of Women and Child Development, Puducherry.
5. Construction of Anganwadi Centre building (1 No) (Zone-I) at Kalapet for Department of Women and Child Development, Puducherry.
6. Construction of Anganwadi Centre building (1 No) at Veerampattinam for Department of Women and Child Development, Puducherry.
7. Construction of Anganwadi Centre building (1 No) at Nallavadu for Department of Women and Child Development, Puducherry.
8. Construction of State Level Emergency operation centre at East Coast Road near Jeeva Rukmani Mandapam, OCP in Puducherry.
9. Construction of a Taluk office of Oulgaret in Puducherry.
10. Construction of a separate building for Taluk Office in Puducherry.
11. Improvement to the existing Krishna Nagar main road and drainage arrangement (From Thiruvalluvar Nagar Road junction to 5th cross) in Puducherry.
12. Improvement to the existing Krishna Nagar main Road and drainage arrangement (From 5th cross to 20th cross) in Puducherry.
13. Formation of internal Roads at Krishna Nagar on the northern side of the Main Road in Puducherry.
14. Formation of Internal Roads at Krishna Nagar on the southern side of the Main Road in Puducherry.
15. Formation of internal roads at Ezhil Nagar and Devaki Nagar and improvements to the existing internal roads at Suriya Gandhi Nagar and Vasanth Nagar in Puducherry.
16. Construction slipway, power room, winch room and boat repair yard for Karaikal fishing Harbour.
17. Providing internal and external electrification for Revenue Office, Puducherry.
18. Conveyance and filling the low lying areas in Puducherry with red earth available at Kalapet.
19. Construction of District Level Emergency Centre and Additional Accommodation for Department of Revenue and Disaster Management in Puducherry.
20. Construction of working standard Laboratory for Legal Metrology Department at Pakkamudayanpet in Puducherry.
21. Construction of Karuvadi kuppam drain from Muthialpet foot bridge to State Border in Puducherry.
22. Construction of chill plant, fish processing Unit and two sumps for Karaikal fishing Harbour under Emergency Tsumani Reconstruction Project (ETRP)
22. Construction slipway, power room, winch room and boat repair yard for Kariakal fishing Harbour (2nd call)
23. Designing, providing, construction Erection and commissioning, startup and performance trial run for 3 months followed by 1 year free O & M of 1 MLD capacity effluent treatment plant based on SBR technology for Karaikal Fishing Harbour on DBOT basis.
24. Providing aluminium partition to the Taluk office in Puducherry.'
7. Since, according to R1, the construction of Taluk Offices, creation of additional office accommodation, construction of classrooms, filling of low lying areas not affected by Tsunami, electrification of the Revenue Offices, construction of drains from one area to another and the expending of amounts on beneficiaries at Yanam were unconnected to the Tsunami itself, such expenditures would disentitle the Society to the recognition sought.
8. In my considered view, R1 has proceeded on a misconception of the entire matter. The petitioner before me is a Society that has been constituted under the Government of Pondicherry for a specific purpose, being the redressal of the effects and ramifications of the 2004 Tsunami. Each facet of the identified and expenditure incurred is covered by a Government Order. These facts are not disputed by the first respondent. However, according to him, the expenditures incurred are not directly connected with Tsunami rehabilitation. I am unable to agree. Every expenditure is seen to be intrinsically connected with rehabilitation and restoration work necessitated by the Tsunami. Moreover, it also does not stand to reason that the expenditure should be incurred only in places where Tsunami had specifically hit, since the impact of the same was felt over a wide radius.
9. I am thus of the considered view that the reasoning in the imp
Please Login To View The Full Judgment!
ugned order is flawed. In fact, while elaborating on the nature of work performed that, according to R1 disentitle the petitioner to the recognition sought, he cites the concerned Government Orders relied upon by the petitioner in respect of that very work itself. This only illustrates that the works in question, and consequently the expenditures, are covered by the Government Orders. It is indeed a laudable activity that is being carried out by the Agency and the view taken by R1 in this matter does not take into account the purpose of constitution of the Agency and the grievances that it was meant to alleviate. 10. Learned counsel for the petitioner circulates an order of assessment for the subsequent year passed by the Assessing Authority, i.e., A.Y.2011-12, where the Assessing Authority has accepted the claim of the petitioner for the subsequent year and rightly so. 11. In the light of the discussion as above, the impugned order is set aside. The first respondent will pass an order granting exemption in terms of Section 10(23C) of the Act within a period of four (4) weeks from date of receipt of a copy of this order. 12. The Writ Petition is allowed. No costs. Consequently, connected Miscellaneous Petitions are closed.