State Cricket Association Cannot Retract Counsel’s Concession: Jharkhand HC Rejects Review on Section 2(15) Applicability Under Income Tax Act [Read Order]

In a recent judgment, the Jharkhand High Court dismissed a review petition filed by the Jharkhand State Cricket Association (JSCA), holding that an oral concession made by its counsel regarding the applicability of Section 2(15) of the Income Tax Act is binding and cannot be retracted. The court found no valid grounds to interfere with its earlier order remanding the matter for fresh adjudication based on that concession.

The review petition arose from a tax appeal where the Income Tax Appellate Tribunal (ITAT) had ruled in JSCA’s favor in 2019, holding that the proviso to Section 2(15), which disqualifies charitable entities from tax exemption when they engage in commercial activities, did not apply to JSCA. The ITAT had also set aside the Commissioner of Income Tax’s order under Section 263 and declined to remand the case to the Assessing Officer.

During the hearing of a subsequent appeal filed by the Income Tax Department in T.A. No. 24 of 2019, the association’s counsel conceded that the matter required reconsideration in light of the Supreme Court’s ruling in the Ahmedabad Urban Development Authority case. Based on this concession, the High Court passed an order on 11.07.2024 remanding the matter to the tax authorities for fresh consideration.

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JSCA later filed a review petition seeking to undo the remand order, essentially arguing that the concession made by its counsel should not bind it.

A division bench comprising Justice Sujit Narayan Prasad and Justice Pradeep Kumar Srivastava rejected this plea, stating that an oral concession made by a party’s counsel, especially when recorded in court, is valid and binding.

The court relied on multiple Supreme Court decisions, including Moran Mar Basselios Catholicos and Sanjay Kumar Agarwal, to rule that a review can only be granted in cases of error apparent on the face of the record or discovery of new material evidence, none of which were present in this case.

The court ruled that the review petition lacked merit since the earlier order was based on a clear and recorded concession, not on any factual or legal error. The court held that a review could not serve as an appeal in disguise or a platform to undo a strategic decision already accepted in court.

The petition was dismissed, and the court maintained its original directive for the matter to be reconsidered by the tax authorities in accordance with the Supreme Court’s precedent.

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