1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.2226 OF 2009 Vivekanand Medical Research Society, Vidyanagar, Latur through it's President Shri Dr.Ashok Laxmanrao Kukade. .. Petitioner Versus 1. The Union of India, through the Under Secretary ITA-II, Ministry of Finance, Dept. of Revenue Central Board of Direct Taxes, New Delhi. 2. The Secretary, Ministry of Science & Technology, Department of Scientific & Industrial Research, Technology Bhavan, New Mehrauli Road, New Delhi - 110 0016. 3. The Commissioner of Income Tax, Aaykar Bhavan, Aurangabad. .. Respondents ... Mr.Pradeep Deshmukh, Advocate holding for Mr. H.A. Joshi, Advocate for petitioner. Mr. Alok Sharma, Advocate for respondents. ... CORAM : A.M. KHANWILKAR & S.S. SHINDE, JJ. DATE : 11TH FEBRUARY, 2010 2 PER COURT : Rule. Rule made returnable forthwith. With the consent of parties, the petition is taken up for final hearing at the admission stage. Heard learned Counsel for the parties. 2. In spite of notice issued as back as on 14-07-2009 and appearance was entered on behalf of the respondents through Advocate on that date, no reply has been filed to counter the assertions made in the present petition. The challenge in the present petition filed under Article 226 of the Constitution of India is essentially to the decision of the Central Board of Direct Taxes, as communicated to the petitioner, by the Under Secretary of Ministry of Finance dated 02-05-2008. The said communication reads thus: "F.No.203/2/2008/ITA.II BY SPEED POST Government of India, Ministry of Finance, 3 Department of Revenue, Central Board of Direct Taxes. New Delhi, the 2nd May, 2008 To M/s Vivekanand Medical Research Society, Vidya Nagar, Latur, Maharashtra. Dear Sir, Subject:-Application for renewal of approval u/s 35(1)(ii) of the Income-tax Act, 1961, for the period from 1.4.2006 afterwards -regarding. Please refer to the above application filed by you. 2. After careful examination of the application as well as other details furnished by you from time to time, it is noticed that no scientific research activity, which is an essential requirement to qualify for approval u/s. 35(1)(ii) of the Income-tax Act, 1961, has been carried out by you. Accordingly, the "prescribed authority" has held that Vivekanand Medical Research Society is NOT a fit case for grant of approval under that section. It is, therefore, regretted that your application for approval under section 35(1)(ii) of the Income- tax Act, 1961, has been rejected. Yours sincerely, (sd/-Surender Pal) Under Secretary(ITA.II) 4 Copy to: Commissioner of Income-tax, Aurangabad, Mahaashtra-431002. Sd/- Surender Pal. Under Secretary (ITA.II)," 3. The criticism of the petitioner to the approach of the Central Board of Direct Taxes is that the finding recorded that no scientific research activity is carried out by the petitioner is untenable if not perverse. In that, the Department which is expected to renew the recognition of the petitioner society for Scientific and Industrial Research Organization namely Ministry of Science & Technology, Department of Scientific & Industrial Research and Technology has already accepted the claim of the petitioner society by issuing renewal of recognition for the period from 01-04-2006 upto 31-03-2009. During this relevant period, the request for granting exemption under Section 35 of the Income-tax Act, 1961 was made by the petitioner which has been considered by the 5 Ministry of Finance, Department of Revenue, Central Board of Direct Taxes. For the sake of convenience, we think it appropriate to reproduce the recognition order passed by the Ministry of Science & Technology, Department of Scientific & Industrial Research dated 10th May 2006 which was in force till 31-03-2009. Same reads thus: "Government of India Ministry of Science & Technology, Department of Scientific & Industrial Research, Technology Bhavan, New Maharuli Road, New Delhi-110016 Telegram:SCIENCTECH/ Telephone No.0507373,0502134, 0502122,0502123, 0502124,0502100(EPABX) Fax-0500029,0500007 By Registered Post: No.14/63/88-TU-V Date 10 May 2006 The Secretary Vivekananda Medical Research Society, Vidya Nagar, Latur 413531. Subject: Renewal of Recognition of Scientific and Industrial Research Organisations(SIROs). 6 Dear Sir, This has reference to your application for renewal of recognition of Vivekananda Medical Research Society, Latur as a Scientific and Industrial Research Organisation (SIRO) by the Department of Scientific and Industrial Research under the Scheme on Recognition of Scientific and Industrial Research Organisations (SIROs) 1988. 2. This is to inform you that it has been decided to accord renewal of recognition to Vivekananda Medical Research Society,Latur from 1.4.2006 to 31.3.2009. The recognition is subject to terms and conditions mentioned overleaf. 3. Receipt of this letter may kindly be acknowledged. Yours faithfully, Sd/- ( R.R. Abhyankar) Scientist-G" 4. In the light of the opinion of the Ministry of Science and Technology, it is doubtful whether the Central Board of Direct Taxes can form a different opinion about the nature of activity of the petitioner and proceed on the assumption that no scientific research activity was being carried out by the petitioner. If such approach is impermissible, the question of 7 sustaining the conclusion reached by the Central Board of Direct Taxes as noted in the communication dated 02-05-2008 cannot stand the test of judicial scrutiny. In any case, from the communication dated 02-05-2008 it is not possible to discern that the renewal of Scientific and Industrial Research Organisation granted by the Ministry of Science and Technology, Government of India, was in fact reckoned by the Central Board of Direct Taxes while deciding the claim of the petitioner. 5. In the circumstances, we think it appropriate to set aside the impugned decision and instead, direct the Central Board of Direct Taxes to reconsider the case of the petitioner, on its own merits, in accordance with law, after giving fair opportunity to the petitioner, in that behalf. All questions are left open to be decided on its own merits by the appropriate authority. The remanded proceedings be finally disposed of by the Central Board of Direct 8 Taxes, expeditiously as possible and in any case, not later than three months from today. 6. The petition is disposed of accordingly. Rule made absolute on the above terms. ( S.S. SHINDE, J. ) ( A.M. KHANWILKAR, J.) sut/FEB10/wp2226.09