: The Telangana High Court issued notices to the Central Board of the Direct Taxes (CBDT), commissioner for income-tax appeals and others for issuing demand notices to the Telangana Building and Other Construction Workers Welfare Board, and orders by the commissioner of income-tax exemption, to pay 20 per cent of outstanding demand amount immediately. A division bench, comprising Justice Sujoy Paul and Justice Namavarapu Rajeshwar Rao, directed CBDT and others to submit a reply to the contentions of the petitioner, who said that the department had no jurisdiction or authority to demand the tax. Senior counsel Avinash Desai, representing the petitioner board, argued that it was a statutory board constituted under the provisions of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, in 2008.
Pursuant to an exemption notification dated 09.11.2017, the petitioner was not required to pay tax.
Further, he submitted that the board was a non-profit organisation constituted for the welfare of construction workers. The bench was inclined to go with the arguments of the senior counsel and viewed that the various courts had interpreted the CBDT office memorandums and opined that the same are directory in nature not mandatory. However, the bench issued notices to the department.
The board was constituted by the Telangana government. The income raised by it by way of cess, registration and renewal fee from building and other construct.
