High court asks ZP CEO for affidavit in property tax

High court asks ZP CEO for affidavit in property tax

Mangalore Today News Network

Mangaluru Jan 19, 2018: The Karnataka High Court has directed Dakshina Kannada Zilla Panchayat CEO to file a personal affidavit stating the reasons for denying exemption of property tax to Bhuvanajyothi Educational Trust.

Justice Vineeth Kothari also said that if he fails to file the affidavit before the next date of hearing, then he wil have to appear before the court and deposit Rs 50,000 by way of security deposit from his personal resources.

Justice Kothari was hearing a petition filed by the trust challenging the Zilla Panchayat CEO’s order asking it to pay property tax.

The petitioner is an educational trust and runs a residential school comprising over 400 students and 60 teaching and non-teaching staff members at Shirthady village in the district.

The bench also issued a notice to Gram Panchayat, Shirthady, Zilla Panchayath and the state government.

The petitioner’s counsel submitted that the petitioner is an educational institution and a trust and is entitled to exemption from property tax under Rule 6(c) of the Karnataka Panchayat Raj (Grama Panchayat Tax and Fees) Rules, 1994, which exempts, buildings and lands used solely for charitable or public religious purposes (not specifically covering educational institutions) and not let out for rent.

The counsel also submitted that the petitioner is also exempted from Income Tax under section Section 12A r/w 80G of the Income Tax Act.

The counsel submitted that the Gram and Zilla Panchayats denied the property tax exemption to the petitioner on the ground that it is paying income tax and is not entitled to such  an exemption from property tax. The Panchayat also stated that the petitioner has let out a portion of their premises to a commercial bank, therefore it loses its exemption.

The court, however, observed that the Panchayat’s premises for denying the exemption from property tax does not exist as the petitioner has not let out any portion of his land to any bank and has also obtained the certificate from the Gram Panchayat that six banks in the Gram Panchayat area are at the addresses different from the address of the petitioner.

The court also stayed the operation of the impugned order of the CEO of the Zilla Panchayat and asked the respondents to file their responses within four weeks.  The matter was adjourned to February 15 for hearing