IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 6^TH DAY OF FEBRUARY 2026 BEFORE THE HON'BLE MRS JUSTICE K.S.HEMALEKHA WRIT PETITION NO. 100630 OF 2024 (T-IT)

BETWEEN:

RANI CHANNAMMA UNIVERSITY (A UNIVERSITY ESTABLISHED UNDER SECTION 3(1E) OF THE KARNATAKA STATE UNIVERSITIES ACT, 2000, VIDYASANGAMA, NH-04, BELAGAVI-591156, KARNATAKA, REPRESENTED BY ITS REGISTRAR, SMT. RAJASHREE H.JAINAPUR.

…PETITIONER (BY SRI. ASHOK A. KULKARNI, ADVOCATE)

AND:

1. THE UNDER SECRETARY (ITA-1) CENTRAL BOARD OF DIRECT TAXES, (ITA -1 DIVISION), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-10001.

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BENGALURU-560027, KARNATAKA.

…RESPONDENTS (BY SRI. M.THIRUMALESH, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH BY A WRIT OF CERTIORARI OR A DIRECTION IN THE NATURE OF CERTIORARI, THE COMMUNICATION U/S 10(46) OF THE ACT BEARING NO. F. NO. 196/24/2021-ITA-1 DATED. 12-12-2023 PASSED BY THE 1^ST RESPONDENT IN ANNEXURE-E, FOR BEING ILLEGAL UNLAWFUL, ARBITRARY AND VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE; AND ETC.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA

ORAL ORDER

1. The petitioner – University has called in question the communication dated 12.12.2023 (Annexure-E) issued by the first respondent, whereby the application submitted by the petitioner seeking issuance of notification under Section 10(46) of the Income Tax Act, 1961 (‘the Act’, for short), came to be rejected.

2. Brief facts of the case:

2.1. The petitioner is a statutory University established under Section 3(1E) of the Karnataka State Universities Act, 2000 (‘KSU Act’, for short), enacted by the State Legislature, and is engaged in imparting higher education for the benefit of the general public.

2.2. The petitioner is a non-profit institution and is statutorily prohibited from carrying on any commercial activity. Its income consists of grants from the State Government, fees collected from students, examination fees, interest on deposits, and other incidental receipts directly connected with its educational objects.

2.3. It is stated that the petitioner was earlier granted registration under Section 12AA and exemption under Section 10(23C)(vi) of the Act.

2.4. The petitioner also submitted an application dated 27.03.2021 before the second respondent seeking issuance of a notification under Section 10(46) of the Act. Pursuant thereto, the petitioner submitted detailed explanations and justifications as called for by the Department.

2.5. However, by the impugned communication dated

12.12.2023 (Annexure-E), the first respondent disposed of the said application without affording the petitioner an opportunity of hearing and without examining the merits of the petitioner’s eligibility under Section 10(46) of the Act.

2.6. Aggrieved by the said communication, the petitioner is before this Court.

3. Contention of the petitioner:

3.1. Learned counsel for the petitioner contends that the petitioner-institution squarely satisfies all the conditions prescribed under Section 10(46) of the Act and that the impugned communication has been issued in gross violation of the principles of natural justice, without granting an opportunity of being heard.

3.2. It is further submitted that the rejection is based on an erroneous assumption that the registration under Section 12AA or exemption under Section 10(23C)(vi) of the Act bars consideration of an application under Section 10(46) of the Act, which is legally unsustainable.

3.3. In support of the said contention, learned counsel for the petitioner has placed reliance