U.P. Forest Corporation And Anr vs Dy. Commissioner Of Income Tax, Lucknow

2. The U.P. Forest Corporation (for short, `the Corporation'), the appellant no.1 in Civil Appeal Nos. 9432; 9333; 9435 and 9436 of 2003, was constituted by a Notification issued under Section 3 of the U.P. Forest Corporation Act, 1974. In the year 1977, the Income-tax authorities issued a notice to the Corporation of file its return of income for the assessment year 1976-77 under the Income-tax Act, 1961 (for short, `the Act'). The Corporation challenged the said notice by filing Writ Petition No. 1568 of 1977 which was disposed of by the High Court by holding that the Corporation was a local authority under Section 10(20) of the Act and was entitled to claim exemption. Since the said order was not challenged by the Revenue, the same became final and remained in force till a contrary view was taken by this Court in respect of Assessment Years 1977-78, 1980-81 and 1984-85 in the case of Commissioner of Income tax, Lucknow v. U.P. Forest Corporation, reported in [1998] 3 SCC 530.

3. For the Assessment Year 1977-78, the Corporation's income was asssed by making some additions of income and deleting some deductions claimed in the return of income. On an appeal being filed, the Commissioner (Appeals) upheld that the Corporation was exempt from paying tax on the ground that it was a `local authority' within the meaning of Section 10 (20) of the Act. Insofar as the relief sought regarding additions of income and deletion of deduction in concerned, the Commissioner declined to decide the said issue. The Income Tax Appellate Tribunal (`the Tribunal' for short) set aside the said order of the Commissioner (Appeals) and held that the Corporation was not a `local authority' and remanded the appeals to the Commissioner (Appeals) for rehearing on merits on the issue of grant of relief relating to additions/deductions.

7. The appellant-Corporation, on 11th July 1988, moved an application before the competent authority for being registered under Section 12A of the Act which was rejected after a gap of nine years on 18th March 1997.

9. After the matter was remanded by this Court in the case of Commissioner of Income-tax, Lucknow v. U.P. Forest Corporation (supra), the Assessing Authority held that the appellant was not a charitable institution and assessed the income in respect of Assessment Years 1977-78, 1980-81 and 1984-85 to tax. Commissioner (Appeal) partly allowed the appeals of the appellant-Corporation granting some relief on issues of addition/deductions. The appellant-Corporation as also the Revenue filed appeals against the said order before the Tribunal. The Tribunal allowed the appeals filed by the Revenue and set aside the relief granted to the Corporation on the issue of additions/deductions on the ground that this Court had remanded the matter only to decide one issue.

13. We, accordingly, dismiss the appeals filed by the Corporation without deciding the merits of the dispute.

14. In view of the dismissal of these appeals, the appeals filed by the Revenue also stand dismissed. However, in order to protect the interest of the assessee as well as the Revenue, we direct the Tribunal, before whom the appeals are pending against the order passed by the Commissioner rejecting the application filed under Section 12A of the Act, to take up the matter on priority basis and decide the same as expeditiously as possible without being influenced by any of the findings recorded by the High Court in the impugned order.

16. It is further made clear that the order of the High Court remanding the matter in respect of main assessment shall remain in abeyance till the matter regarding registration is decided finally by the Tribunal.

17. No. costs.