THE HONBLE SRI JUSTICE C.V.NAGARJUNA REDDY AND HONBLE SRI JUSTICE T.AMARNATH GOUD WRIT PETITION No.22727 of 2017 27.11.2017 Between: Telangana State Pollution Control Board ..Petitioner And Commissioner of Income-tax (Exemptions), Hyderabad and others ..Respondents Counsel for petitioner: Mr.Y.Ratnakar Counsel for respondents: Mr.J.V.Prasad, senior standing counsel for Income Tax Department Court made following: 2 CVNR,J & TA,J W.P.No.22727 of 2017 27.11.2017 ORDER: (Per Hon ble Sri Justice C.V.Nagarjuna Reddy) This writ petition is filed for mandamus to set aside order in F.No.CIT(E)/Hyd/10(23C)(iv)/2016-17, dated 07.03.2017, of respondent No.1 Commissioner of Income Tax (Exemptions), Hyderabad. petitioner has also sought for consequential direction to respondent No.1 to grant approval under Section 10(23C)(iv) of Income Tax Act, 1961 (for short Act ) in pursuance of its application, dated 30.09.2015. 2. We have heard Mr.Y.Ratnakar, learned counsel for petitioner, and Mr.J.V.Prasad, learned senior standing counsel for Income Tax Department appearing for respondents. 3. admitted facts are that Andhra Pradesh Pollution Control Board (APPCB) was constituted in composite State of Andhra Pradesh under provisions of Water (Prevention and Control of Pollution) Act, 1974 (for short Water Act ) and it was granted approval under Section 10(23C)(iv) of Act by Chief Commissioner, Exemptions-III, Hyderabad, vide his order, dated 29.09.2010, as result of which, APPCB was not liable to pay tax from assessment year 2009-10. Consequent on bifurcation of composite State of Andhra Pradesh on formation of State of Telangana, latter has constituted petitioner Telangana State Pollution Control Board, for State of Telangana under G.O.Ms.No.2, Environment, Forests, Science & Technology (Env.) Department, dated 07.07.2014, under provisions of Section 4 of 3 CVNR,J & TA,J W.P.No.22727 of 2017 27.11.2017 Water Act. newly constituted Board (the petitioner) has subsequently adopted Air (Prevention and Control of Pollution) Act, 1981. 4. petitioner has pleaded, with reference to which there is no dispute, that purposes and objects for which it was constituted are identical to that of APPCB. In respect of financial year 2014-15 (assessment year 2015-16), petitioner has made application in Form No.56 along with enclosures, for exemption under Section 10(23C)(iv) of Act on 30.09.2015 in Office of Income Tax Exemption Circle. case was posted to 11.12.2015 by Exemption Circle for enquiry and hearing as required under second proviso to Section 10(23C)(iv) of Act. On that day at 11.30 a.m., executives looking after accounts of petitioner along with its Chartered Accountant appeared before respondent No.4. Assistant Commissioner of Income-tax (Exemptions), Hyderabad. said functionary directed petitioner to file audited accounts for financial year 2014-15 and said papers were filed in inward counter on same day under acknowledgement. petitioner has further pleaded that thereafter, its officers made periodical enquiries, which revealed that matter is pending consideration. After waiting for more than one year, Principal Secretary of petitioner has addressed letter/representation, dated 22.02.2017, to respondent No.1 referring to facts narrated above. In paragraph 5 of said letter, it is stated by petitioner that as per ninth proviso to Section 10(23C) (iv) of Act, order of rejection has to be passed within 4 CVNR,J & TA,J W.P.No.22727 of 2017 27.11.2017 twelve months from end of month in which application in Form No.56 was received and that since such application was received on 30.09.2015 and no order was passed rejecting said application, order is deemed to have been passed granting petitioner exemption under Sub-Clause (iv) to Section 10(23C) of Act. On receipt of this letter, respondent No.1, by order, dated 07.03.2017, has informed petitioner that its application in Form No.56 along with enclosures was taken on file by respondent No.4 and said officer has inadvertently issued notice calling for details without knowledge of undersigned (respondent No.1); that time limit prescribed for grant of approval/rejection of exemption is twelve months from end of month in which application in Form No.56 was filed and that as neither application was filed by petitioner before competent authority nor factum of filing of such application before respondent No.4 was brought to knowledge of competent authority within stipulated time, there cannot be deemed approval of application. In light of said reasons, respondent No.1 has held that application filed by petitioner on 30.09.2015 is not maintainable. Feeling aggrieved by this order, petitioner has filed this writ petition. 5. It is not in dispute that respondent No.1 is competent authority to receive applications for exemption. However, when application for exemption in Form No.56 was filed by petitioner on 30.09.2015 before respondent No.4, said functionary has not returned same. On contrary, he has sent notice of enquiry, 5 CVNR,J & TA,J W.P.No.22727 of 2017 27.11.2017 in pursuance of which, he has held enquiry and directed petitioner to submit audited accounts, which was complied with by petitioner. Even thereafter, application was not returned by any of respondents on ground that it was not maintainable. It is only when after petitioner has addressed letter, dated 22.02.2017, that respondent No.1 has rejected petitioner s application. 6. It is not pleaded case of respondents, as reflected in counter-affidavit, that petitioner has filed application for exemption before wrong authority, deliberately. pleadings in counter-affidavit are not suggestive of any mal intention on part of petitioner to file application before wrong authority. Therefore, we have no reason to reject to plea of petitioner that inadvertently, application was filed before respondent No.4. When petitioner filed application before wrong authority, same should have been returned. As noted hereinbefore, instead of returning petitioner s application, enquiry was held and additional material was sought for, obviously making petitioner to believe that its application is pending consideration. Therefore, on facts of case, blame is equally apportionable to both parties. If petitioner is entitled to exemption on merits, it would be iniquitous to deny consideration of its application, merely because it was not addressed to correct authority. Therefore, we are of opinion that it would be in fitness of things, if application, dated 30.09.2015, filed by petitioner is treated as one filed before competent authority i.e., respondent No.1. 6 CVNR,J & TA,J W.P.No.22727 of 2017 27.11.2017 7. Accordingly, respondent No.4 is directed to forward application filed by petitioner for exemption in Form No.56 along with enclosures to respondent No.1 within two weeks from date of receipt of copy of this order. Within two months thereafter, respondent No.1 shall hold enquiry, pass appropriate order and communicate same to petitioner. 8. Subject to above directions, Writ Petition is disposed of. 9. As sequel to disposal of Writ Petition, W.P.M.P.No.27988 of 2017 filed by petitioner for interim relief shall stand disposed of as infructuous. C.V.NAGARJUNA REDDY, J T.AMARNATH GOUD, J 27th November, 2017 GHN Telangana State Pollution Control Board v. Commissioner of Income-tax (Exemptions), Hyderabad and other