M/s Manidhaneyam Charitable Trustrepresented by its Managing TrusteeThiru Sa.Duraisamy v. Fort St.George

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28-08-2007CORAM:THE HONBLE MR.JUSTICE M.CHOCKALINGAMW.P.NO.8616 OF 2007 and MP.Nos.2 and 3 OF 2007M/s Manidhaneyam Charitable Trustrepresented by its Managing TrusteeThiru Sa.Duraisamy ... Petitioner Vs.1.The Government of Tamil Nadu represented by its Secretary, Revenue Department, Fort St.George, Chennai.2. The Sub-Registrar, Office of Sub-Registrar, Velachery, Chennai 600 042.3. The Inspector General of Registration, Registration Department, Chennai 600 028. ... Respondents Petition filed under Article 226 of the Constitution of Indiapraying to issue a writ of Certiorarified Mandamas as stated therein.For petitioner : Mr.Philip George For Respondent No.1 to 3:Mr.N.Senthil Kumar Additional Government Pleader O R D E R The petitioner, a Charitable Trust represented by its ManagingTrustee, has sought for a writ of Certiorarified mandamus to quash thenotice issued by the second respondent on 18.9.2006 in Na.Ka.No.158/06 andalso to direct the second respondent to return the document viz. gift deedregistered on 10.07.2006 by giving effect to the remission as perG.O.1224/Revenue dated 25.4.1964 read with G.O.Ms.No.224/Commercial Taxes(J1)/dated 11.12.2003. https://hcservices.ecourts.gov.in/hcservices/

2. The Court heard the learned counsel on either side.3. The case of the petitioner, as could be seen from theaffidavit filed in support of the petition and also after hearing thelearned counsel for the petitioner, is that he is the Managing trustee ofthe trust in question, and the petitioner was registered vide the Deed ofDeclaration of Trust dated 24.1.2005. It is also registered as a PublicCharitable Trust under Section 12AA of the Income Tax Act 1961 by theDirector of Income Tax (Exemptions) vide his order No.DIT(E) No.2 (970)/04-05 dated 18.5.2005 and approved by the Director of Income Tax(Exemptions) under Section 80G of the Income Tax Act, 1961, vide his orderNo.DIT(E) No.2 (970)/04-05 dated 18.5.2005 for the period from 17.02.2005to 31.03.2006. Further,the petitioner had filed an application forrenewal of the approval under Section 80(G) before the Director of IncomeTax (Exemptions) on 6.2.2006, well before the expiry of the approval andthe same was also approved by the Director of Income Tax(Exemptions) forthe period from 1.4.2006 to 31.03.2006 vide his order No.DIT(E) No.2(970)/04-05 dated 22.08.2006, that one Sa.Duraisamy, the sole and absolute ownerof the property comprised in T.S.No.66/9 (Old S.No.33), BlockNo.20,Velachery Village, Mambalam-Guindy Taluk, Chennai District,measuring an extent of 40.70 cents, being 17,746 sq.ft. of land with thebuilding measuring about 5457 sq.ft. built thereupon, has executed a giftdeed on 10.07.2006 transferring the property to the petitioner. At thetime when the deed of gift was placed for registration before the secondrespondent, the petitioner had claimed one half (50%) remission of stampduty leviable on the above transaction of Gift in view ofG.O.Ms.No.1224/Revenue dated 25.4.1964 read with G.O.Ms.No.224/CommercialTaxes(J1)/dated 11.12.2003. The second respondent had accepted the deed ofgift dated 10.7.2006 and registered the same after payment ofRs.2,90,300/- along with Rs.45,250/- worth stamp paper, totally a sum ofRs.3,35,550/- towards stamp duty, being 50% of the stamp duty on the valueof the property. The second respondent issued the impugned notice on18.9.2006 demanding a sum of Rs.4,39,983/- being the remission of StampDuty claimed by the petitioner on the ground that the approval underSection 80G of Income Tax Act was granted subsequent to the registrationof the Gift deed. The petitioner has also filed a petition dated 6.10.2006before the third respondent praying for clarification in this regard anddirection to the second respondent to return the gift deed dated10.07.2006, by accepting the claim of the petitioner. But they have notpassed any order thereon. Under compelled circumstances, the petitionerhas filed the present writ petition before this Court. 4. The Court heard the learned counsel for the respondent.5. It is not in controversy that the petitioner wasregistered as a Public Charitable Trust under Section 12AA of the IncomeTax Act,1961 and it was also approved by the Director of Income Tax underSection 80G of the Income Tax Act by order dated 18.5.2005 for the periodfrom 17.2.2005 to 31.3.2006. When the gift deed was executed by one https://hcservices.ecourts.gov.in/hcservices/ Duraisamy in respect of the immovable property, the same was placed forregistration on 10.7.2006 in the office of the second respondent, thepetitioner had claimed one half (50%) remission of stamp duty leviable onthe above transaction of Gift in view of the G.O.No.1224/Revenue dated25.4.1964 read with G.O.N.224/Commercial Taxes (J1)/dated 11.12.2003, andalso in view of the approval under Section 80G of the Income Tax Act. Itis not in controversy that accepting the same, the document was registeredas gift deed.Thereafter the impugned notice was served demanding a sumof Rs.4,33,983/- being the remission of stamp duty claimed by thepetitioner. Aggrieved over the same, the petitioner had filed a petitionbefore the third respondent on 6.10.2006, but the same was not consideredby the third respondent. Hence, the above writ petition has been broughtforth for the relief as stated above.6. The petitioner has claimed remission of 50% stamp dutyleviable on the above transaction of gift, in view of G.O.No.1224/Revenuedated 25.4.1964 along with G.O.224, Commercial Taxes(J1) dated 11.12.2003. 7. Item 47 of G.O.1224 dated 25.4.1964 reads as follows: All gifts or settlements for charitable orreligious purposes-Duty reduced to one half of theduty leviable on such instruments (G.O.Ms.No.639,revenue dated 20th march, 1948 and G.O.Ms.No.2993,revenue dated 15th December, 1948)". Provided that, the above gift will apply only in the case being society ortrust approved under Section 80G of the Act, 1961 Central Act 43 of 1961.From the reading of the above G.O., it is abundantly clear that theremission of 50% of stamp duty is to be given, on the petitionersatisfying two conditions, firstly, the gift or settlement should be onefor charitable or religious purpose, secondly, the said donee, societyor trust should have been approved under Section 80G of the Income Tax Act1861. In the instant case, it is not in controversy that the petitioner'ssociety, a charitable trust, originally applied for benefits underSections 80G of the Act and the same has been approved from 17.2.2005 to31.3.2006. From the materials available on record, it is quite clear thatrenewal was applied even before 31.3.2006. It would clearly reveal thatthe renewal application was made as early as 6.2.2006 and renewal was alsogranted under Section 80G of the Income Tax Act from 1.4.2006 to31.3.2009. It was also made clear in the order that the renewal was validin respect of the donation received by the trust from 1.4.2006 to31.3.2009. In the instant case, the document of gift was actuallyregistered on 10.7.2006. When the document was registered, it has got tobe examined under Section 80G of Act. Now the petitioner, on notice, wasdirected to make the above said payment as stamp duty only for the reasonthat the approval under Section 80G of the Act was granted subsequent tothe Registration of the Gift deed. After looking into the materialsavailable on record, this Court is of the considered opinion that thenotice itself has been issued erroneously. Though the order of renewal waspassed by the department on 27.7.2006 on an application made by the https://hcservices.ecourts.gov.in/hcservices/ petitioner on 6.2.2006, it is made clear in the order itself that therenewal under Section 80G of the Act would have given effect from 1.4.2006to 31.3.2009 and even this order has not been placed before the authorityand the authority, having not looked into the order of exemption, issuednotice, which in the opinion of the Court, is bad and invalid. In theinstant case, once the petitioner was entitled to have remission of 50% ofthe stamp duty by the operation of the G.O., referred viz. G.O.Ms.No.1224Revenue Dated 25.4.2004 and it was also had its approval on the relevantdate, i.e., on 10.7.2005, without any hesitation, the above writ petitionhas got to be strictly ordered.8. With the above observation, the writ petition is ordered. Nocosts. Consequently, MP.Nos.2 and 3 of 2007 is closed. VJYsd/-Asst.Registrar/true copy/Sub Asst.RegistrarTo1. The Secretary, Revenue Department, Fort.St.George, Chennai.9.2. The Sub Registrar, O/o sub registrar, Velachery, Chennai42.3. The Inspector General of Registration, Registration Department, Chennai28.4. The Section Officer, V.R.Section , High Court, Madras. (to sent the records immediately)+ 1 cc to Mr.Philip George Advdocate SR.NO.53911MS(CO)RD 14.9.07W.P.NO.8616 OF 2007ANDM.P.NOs.2 and 3 OF 2007