Point of Law: Taxation - Exemptions - Where there are two exemption notifications that cover the goods in question, assessee is entitled to benefit of that exemption notification which gives him greater relief, regardless of fact that notification is general in its terms and other notification is more specific to goods.

ORDER :

T. Vinod Kumar, J.

By these two separate writ petitions, the petitioners are questioning the action of the respondents, in particular the 1st respondent, in not notifying the petitioners under Section 10(46) of the Income Tax Act, 1961 (for short, ‘the Act’). Hence, these writ petitions are being disposed of by a common order.

2. The Telangana State Pollution Control Board (for short ‘TSPCB’) is the petitioner in W.P.No.4834 of 2020, while Andhra Pradesh Pollution Control Board (for short ‘APPCB’) is the petitioner in W.P.No.15629 of 2020.

3. Both the petitioners are constituted by the State Governments under Section 4 of Water (Prevention and Control of Pollution) Act, 1974 and Section 5 of the Air (Prevention and Control of Pollution) Act, 1981 and are established for the purpose of administering and controlling various steps relating to reduction of pollution and hazardous waste of all kinds, as per the statutory provisions of the said statutes.

4. It is the case of the petitioner-TSPCB that on its application, the prescribed authority viz., the 2nd respondent, granted approval under Section 10(23C)(iv) of the Act with effect from the Assessment Year 2014-15 onwards.

5. Similarly, it is the case of the petitioner-APPCB that the prescribed authority granted approval to it under Section 10(23C)(iv) of the Act with effect from the Assessment Year 2010-11 onwards.

6. It is the common case of the petitioners that though the petitioners were approved by the 2nd respondent and granted exemption under Section 10(23C) of the Act, the 3rd respondent denied the benefit of exemption on its income under the Act, for one or other reason and the matters are pending consideration in appeal before the appellate forum.

7. The petitioners contend that Parliament by the Finance Act, 2011, inserted sub-section (46) to Section 10 of the Act, with effect from 01.06.2011; that the said provision being more apposite to the activities carried on by the petitioners, the petitioners submitted applications dt.07.03.2017 and 08.03.2017, respectively, for being notified under Section 10(46) of the Act; that the petitioners satisfy the conditions specified under Section 10(46) of the Act; that similarly placed Pollution Control Boards of the other States, have been notified under Section 10(46) of the Act; and that despite the petitioners making applications for issue of notification under Section 10(46) of the Act, which would entail the petitioners to avail exemption on their income, the said request of the petitioners is not being considered and the petitioners are not notified under Section 10(46) of the Act.

8. Counter-affidavit on behalf of the respondents is filed opposing the claim of the petitioners.

9. Heard Sri Y. Ratnakar, learned counsel for the petitioners, and Sri K. Raji Reddy, learned Senior Standing Counsel appearing on behalf of the respondents.

10. The fulcrum of the petitioners contention is that in view of insertion of sub-section (46) to Section 10 of the Act with effect from 01.06.2011, the petitioners being i) established under Central Act, ii) Constituted by the State Government, iii) the activities carried on are for the benefit of general public, and iv) not engaged in any commercial activity, are eligible for being notified under Section 10(46) of the Act. The consequence of being notified under Section 10(46) of the Act, would make the petitioners entitled to claim exemption on its income under the Act.

11. It is also contended that the petitioners being instrumentality of State constituted to implement and enforce the provisions of Central enactment, they are entitled to immunity from Union taxation under Article 289 of the Constitution of India. It is thus, claimed that the petitioners having made applications to the 2nd respondent during the financial year 2016-17, they are required to be notified under Section 10(46) of the Act from the Assessment Year 2016-17 and on being notified, the petitioners would surrender the approva