U.P. FOREST CORPORATION AND ANR. versus DY. COMMISSIONER OF INCOME TAX, LUCKNOW

Citation: [2007] 12 S.C.R. 601 · Decided: 27-11-2007 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed

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Judgment (excerpt)

' J 
U.P. FOREST CORPORATION AND ANR. 
A 
v. 
DY. COMMISSIONER OF INCOME TAX, LUCK.NOW 
NOVEMBER 27, 2007 
B 
[ASHOK BHAN AND ALT AMAS KABIR, JJ.) 
Income Tax Act, 1961: ss.11 (J)(a), 12 and J 2A-Assessment of 
income-Application for registration under s. l 2A pending before 
Tribunal-Claim for exemption under s.11(1) (a) on the ground that C 
assessee is charitable institution-Assessing Authority holding that it 
is not charitable institution-Challenge against-Held: For claiming 
benefit under s. 11 (l)(a), registration under s. l 2A is must-Assessee 
not registered under s. l 2A hence not entitled to exemption under s. 
11 (l)(a)-Tribunal before whom application for registration pending D 
to take up matter on priority basis and decide same expeditiously-
Order of High Court remanding the matter in respect of main 
assessment shall remain in abeyance till matter regarding registration 
is decided finally by Tribunal. 
In the instant appeals, the question for consideration was: Whether 
the assessee-U.P. Forest Corporation was entitled to benefit of 
exemption unders. ll(l)(a) of the Income Tax Act, 1961, claiming itself 
as a charitable institution? 
Dismissing the appeals of assessee-Corporation as also of 
Revenue, the Court 
E 
F 
HELD: 1.1. For claiming benefit under s. ll(l)(a) of the Income 
Tax Act, 1961, registration under s.12A is a condition precedent. S.11 G 
provides for exemption of income which is applied for charitable 
purposes. S.12 is in the nature of an explanation of s.11. S.12A provides 
that provisions of ss.11 and 12 shall not apply in relation to income of 
any trust or institution unless certain conditions are satisfied. Unless 
601 
H 
602 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A and until an institution is registered under s. 12A of the Act, it cannot 
claim benefit of s. 11(1 )(a) of the Act. Keeping in view the factthat the 
appellant-Corporation has not been granted registration under s.12A 
of the Act, it is not entitled to claim exemption from payment of tax under 
ss. 11(1 )(a) and 12 of the Act. [Paras 11 and 12) [606-B, C; 607-A, BJ 
B 
Commissioner of Income-tax, Lucknowv. UP. Forest Corporation, 
[ 1998) 3 SCC 530 and Valjibhai Muljibhai Soneji v. State a/Bombay (now 
Gujarat), [1964) 3 SCR 686, referred to. 
1.2. However, in order to protect the interest of the assessee as 
C well as the Revenue, the Tribunal before whom the appeals are pending 
against the order passed by the Commissioner rejecting the application 
filed unders.12A of the Act, would 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 
D impugned order. Till then, the order of the High Court remanding the 
matter in respect of main assessment shall remain in abeyance. In the 
event the matter is finally decided in favour of the assessee-Corporation, 
it would be at liberty to get these appeals revived for a decision on 
merits. In case these appeals are re-opened at the instance of the 
E assessee, the appeals filed by the Revenue shall also get revived 
automatically for decision on merits. All questions are left open. 
[Para 14, 15and16) (607-D, E, F, G) 
CIVIL APPELLATE .nJRISDICTION: Civil Appeal No. 9432 of 
F 2003. 
From the Judgment and final Order dated 26.11.2002 of the High 
Court of Judicature at Allahabad in Income Tax Appeal No. 3 of2000. 
WITH 
G 
C.A. Nos. 9433, 9435-9437 of 2003 & 5552 of 2007. 
Anil Divan, A.K. Ganguli and Sunil Gupta, Jatin Zaveri, Prantap 
Kalra, R.B. Shukla, Ranvir, Rachana Srivastava and Noorullah for the 
Appellants. 
H 
Mohan Parasaran, ASG, Dr. R.G. Padia and R.K. Shukla, K.K. 
( 
U.P. FOREST CORPORATION v. DY. COMMISSIONER 603 
OF INCOME TAX, LUCKNOW [BHAN, J.] 
Senthivelan and Anjani Aiyagari (for B.V. Balaram Das) for the A 
Respondent. 
The Judgment of the Court was delivered by 
ASHOK BHAN, J. 1. Leave granted in S.L.P. (C) No. 7476 of 
2006. 
B 
2. The U.P. Forest Corporation (for short, 'the Corporation'), the 
appellant no.l in Civil Appeal Nos. 9432; 9333; 9435 and 9436 of2003, 
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 C 
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

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