Case Law Details
Bihar State Text Book Publishing Corporation Vs CIT (Patna High Court)
The sole issue arising consideration in the present proceedings is as to whether the petitioner is entitled to exemption in terms of Sections 10 sub Section 23C(iiiab) of the Income Tax Act or not.
Certain facts are not in dispute. The petitioner, namely, Bihar State Text Book Publishing Corporation, incorporated under the Companies Act, 1956, is wholly owned by the Government of Bihar and as such is an instrumentality of the State. It undertakes activities of printing, publishing and distribution of textbooks under the State. Before this Court it is also not in dispute that the petitioner was incorporated solely for educational purpose. Also, it is wholly or substantially financed by the Government. However, whether it generates profit or is established to generate profit, needs to be examined.
It is also not in dispute that petitioner received a notice dated 28.1.2010 (Annexure-1) issued under Section 148 of Income Tax Act, 1961 (hereinafter referred to be as ‘the Act’), by the Assistant Commissioner of Income Tax, Circle-2, Patna, informing his reasons to believe that income assessable is chargeable to tax for the assessment year 2006-07 and as to why it be not so done. Petitioner assailed the said notice by filing the instant petition on 30.11.2010 and vide interim order dated 21.12.2010, this Court, directed the Revenue not to take any coercive action pursuant to any order of re-assessment which may be passed in such proceedings.
It is a matter of record that pending consideration of the present petition, assessment proceedings were concluded with the passing of assessment order dated 23.12.2010 by Additional Commissioner of Income Tax, Range-2, Patna, (Annexure-10) which is placed on record vide separate application. As is evident from the said order, the petitioner received subsidy @ 50% on the general sales amounting to Rs.8 crore 43 lakh (approximately). Hence the Assessing Officer determined the Income chargeable to tax amounting to be Rs.7,66,06450/-.
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