Judgment · High Court · 2003

Present: Ms. Machi Tewatia, Advocate for the petitioner I MCD. Mr. Hi. Narula, Advocate for the respondent. The petitioner Corporation has impugned the order of the çpellate authority dated 10.09.2002 in terms whereof the appeal filed by respondent No. I was allowed and the mplete building was gninted exemption under Section 115(4) of the Delhi Municipal Corporation Act, 1957 (hereinafter to be referred to as. 'the DMC Act' ) from paviñent of property tax. The assessing aithority passed the order in the remanded case to determine this issue regarding exemption from payment of property ta* in view of the judgments of the Supreme.. Court. The assessing authority granted exemption for the sel1-oaupied portion. but held that the area, which is rented out, is subject to property tax. The relevant records were produced before the assessing authority and the assessing authority was of the view that the purpose of the grant of ezeinption is nnt to enhance the income of the assessee to make surplus over expenditure as was being done in the present case.

The appellate authorit y, hver, found that the full property Is liable to be exempted from propert y tax, since there was no distribution of dividend or bonus. The only issue agitated by learned counsel for the petitioner Corporation is that the impugned order of the appellate authority insofar it grants exempion from payment of property tax for the portion, which is rented out, cann be sustained in view of a recent judgment of the Supreme Court in Jndian Red Cross Socie i New Delhi Munici pal Committee & Ors, 2003 W AD (S.C.) 491. In the said case, the Supreme Court was concerned with the provisions of Secti 62 of the New Delhi Municipal Act, 1994. (hereinafter to be referred to as, 'the NDMC Act' ), which is Signature Not Verified Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared the digital data is as per the physical file H.C.D.-I (a) Continuation Sheet (cid:9) Sr.

No. Orders Supreme Court that he statutory exemption is not available to the soctoty if a building is not selfoccupied but is rented out, It was held that the Section does not make any allowance even if rental ncome is used for charitable purpose. The Supreme Court considered its earlier decision in Municival Co,voration of Delhi it Chikfren Book Trust. 1992 (3) SCC 390 and heki that the observations made in the said judgment were made in the context of Section 115(4) of the DMC Act, which envisages societies occupying the subject matter premises, making profit or deriving income and not inconnection with wbereapropertyisnotinoccupationofthesocietyatall, but is rented out. In view of the aforesaid, the plea raised by the petitioner is no more res integra-and is, in fact, fully covered by the aforesaid judgment of the Supreme Court in Indian Red Cross Societ y 's case (supra). However, learned counsel for the. respondent seeks to contend that some of the observations made in Children Book Trust's case (supra) have not been taken into acount by the subsequent judgment of the Supreme Court in Indian Red Cross Society's case (supru), though he does not seriously dispute the fact, that the issue r ised by the petitioner Corporation is covered by the judgment in Indian Red Cross Society 's case (supra).

In my considered view, once the Supreme Court in Indian Red Cross Socierv's.case (supra) has considered the earlier judgment n Children &kk Trust's (supra), it is not open to the respondent counsel topl otherwise. In view of the aforesaid. the impugned order of the appellate authority is quashed to the extent it grants exemption from payment of property tax to respondent No. 1 assessee in respect of the portion of the property, which has been rented out and to that extent the order of the assessing aBthcrity is sustained. C ies to SHRI SHYAM SALES 02-03