Vivekananda Kendra Prakashan Trust, CHENNAI V. DDIT, CHENNAI

CO 131/CHNY/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0970 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 22-05-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2014
• Court: TRIBUNAL
• Department Lawyers: V S JAYAKUMAR
• Assessee Lawyers: N MADHAVAN
• Keywords: Depreciation; Charitable institution
• Section: 69; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2248 /MDS./2014 ( !' #' / ASSESSMENT YEAR :2010-11) & C.O. NO.131/MDS./2014 DEPUTY DIRECTOR OF INCOME TAX (EXEMPTIONS)-I, ANNEXE BUILDING, NUNGAMBAKKAM, CHENNAI 600034. VS. M/S.VIVEKANANDA KENDRA PRAKASHAN TRUST , NO.5,SINGACHAN STREET, TRIPLICANE, CHENNAI 600 054. PAN AAATV 0155 F ( / APPELLANT ) ( / RESPONDENT/CROSS OBJECTOR ) $% & ' / APPELLANT BY : MR.N.MADHAVAN, JCIT, D.R ()$% & ' / RESPONDENT BY : MR.V.S.JAYAKUMAR,ADVOCATE * + & ,- / DATE OF HEARING : 22.05.2015 .# & ,- /DATE OF PRONOUNCEMENT : 15.07.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEAR NED COMMISSIONER ITA NO.2248 /MDS/2014 2 OF INCOME TAX(A)-VIII, CHENNAI DATED 28.05.2014 I N ITA NO.312/13- 14 PASSED UNDER SEC.143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2.1 THE REVENUE HAS RAISED SIX ELABORATE GROUNDS I N ITS APPEAL, AND THEY ARE CONCISED HEREIN BELOW FOR ADJUDICATION :-- 1. THE LD. CIT (A) ERRED BY ALLOWING ASSESSEES APP EAL BY HOLDING THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S.11A OF THE ACT, ALTHOUGH THE ASSESSEES ACTIVITIES WERE IN THE NATU RE OF ADVANCEMENT OF GENERAL PUBLIC UTILITY BEING PRINT ING AND SALE OF BOOKS, MAGAZINES, PICTURES, CALENDARS, DIARIES AND NOVELTIES WHEREIN THE SECOND PROVISO TO SECTION-2(15) OF THE ACT IS ATTRACTED. 2. THE LD. CIT (A) ERRED BY ALLOWING THE CLAIM OF THE ASSESSEE OF DEPRECIATION AMOUNTING TO ` 35,447/-. 2.2. CROSS OBJECTIONS THE ASSESSEE HAS RAISED TWO GROUNDS IN SUPPORT OF THE ORDER OF THE LD. CIT (A), HOWEVER THE CRUX OF THE ISSUE IS T HAT LD. CIT (A) ERRED BY HOLDING THAT THE ACTIVITIES OF THE ASSESSE E TRUST ARE NOT ITA NO.2248 /MDS/2014 3 EDUCATION BUT IN THE NATURE OF ADVANCEMENT OF G ENERAL PUBLIC UTILITY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A TRUST, REGISTERED U/S 12A(A) OF THE ACT VIDE DIT(E) NO.2(9 7)/94-95, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 ON 14. 10.2010 ADMITTING NIL INCOME AFTER CLAIMING EXEMPTION U/S.1 1 OF THE ACT. THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS C OMPLETED U/S.143 (3) OF THE ACT ON 25.03.2013 BY DETERMINING THE TOTAL INCOME AT ` 36,71,439/- WHEREIN THE LD. ASSESSING OFFICER AFTE R EXAMINING THE REVENUE RECEIVED BY THE ASSESSEE TOWARDS SALE OF B OOKS, DIARIES, CALENDARS ETC., OPINED THAT THEY ARE COMMERCIAL IN NATURE WHEREBY FIRST PROVISO TO SEC.2(15) OF THE ACT WOULD GET ATT RACTED AND ACCORDINGLY DENIED THE BENEFITS OF EXEMPTION U/S.11 OF THE ACT. THE LD. ASSESSING OFFICER FURTHER ALLOWED THE CLAIM FOR THE CURRENT YEARS DEPRECIATION AS AGAINST THE TOTAL CLAIM BY THE ASSE SSEE OF ` 61,185/-. 4.1 GROUND NO.1 GRANT OF EXEMPTION U/S.11A OF TH E ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER OBSERVED THAT THE ONLY ACTIVITIES OF THE ASSESSEE ITA NO.2248 /MDS/2014 4 ARE REVENUE GENERATED OUT OF SALE OF PRINTING AND S ALE OF BOOKS, MAGAZINES, PICTURES, CALENDARS, DIARIES AND NOVELTI ES. WHEN THE LD. A.R. QUERIED AS TO WHY THE PROVISO TO SECTION-2(15) OF THE ACT CANNOT BE INVOKED, THE ASSESSEE MADE THE FOLLOWING SUBMISS IONS:- 1. THE ASSESSEE TRUST IS A PART OF VIVEKANANDA KEN DRA GROUP OF CHARITABLE INSTITUTIONS (VK) WHICH HAS BEEN THE FOR EFRONT SERVICE TO HUMANITY FOR THE PAST FIVE DECADES, 2. THE MAJOR ACTIVITIES OF THE PARENT TRUST VK WAS TO MAINTAIN AND UPKEEP VIVEKANANDA ROCK MEMORIAL AT KANYAKUMARI, PROPAGATE TEACHINGS AND THOUGHTS OF SW AMI VIVEKANANDA, PROVIDE VALUE BASED EDUCATION BY RUNNI NG SCHOOLS AND EDUCATIONAL INSTITUTIONS, PROVIDE MEDIC AL RELIEF TO THE POOR, CONDUCT REGULAR YOGA CAMPS, TO CONDUCT RE SEARCH ETC. 3. THE ASSESSEE ALSO PLACED RELIANCE IN THE CASE OF OXFORD UNIVERSITY PRESS VS. CIT IN 115 TAXMAN 69 (SC), SEC ONDARY BOARD OF EDUCATION VS. ITO IN 86 ITR 408(ORISSA). 4. HOWEVER THE LD. ASSESSING OFFICER DISREGARDING THE OBJECTS OF THE ASSESSEES PARENT TRUST VK AND ONLY TAKING INTO ITA NO.2248 /MDS/2014 5 CONSIDERATION OF THE ASSESSEES TRUST OBJECTS HELD THAT THE PRIMARY OBJECTS OF THE ASSESSEE TRUST IS TO PROPAGA TE THE THOUGHTS AND TEACHING OF SWAMI VIVEKANANDA THROUGH PRINTING, PUBLICATION OF BOOKS, JOURNALS, LITERATUR E, PAMPHLETS, PICTURE POST CARDS, DIARIES AND OTHER NOVELTIES LIK E GREETING CARDS, STICKERS ETC. THEREFORE THE LD. ASSESSING O FFICER REJECTED THE CLAIM OF THE ASSESSEE THAT SUCH ACTIVI TY TO FALL WITHIN THE PURVIEW OF EDUCATION AND HELD THAT IT WO ULD FALL WITHIN AMBIT OF ADVANCEMENT OF ANY OTHER GENERAL P UBLIC UTILITY. 4.2 ON APPEAL, THE LD. CIT (A) HELD THAT THE CONSTR UCTIVE ACTIVITIES PROMOTING SWAMI VIVEKANANDAS DOCTRINE, THOUGH STRI CTLY CANNOT BE HELD AS EDUCATION WHICH IS CHARITABLE IN NATURE BUT WILL FALL WITHIN THE CLAUSE ADVANCEMENT OF GENERAL PUBLIC UTILITY AND THEREFORE THE ASSESSEE TRUST IS ENTITLED FOR EXEMPTION U/S.11A OF THE ACT. 4.3. BEFORE US THE LD. D.R VEHEMENTLY ARGUED IN S UPPORT OF THE ORDER OF THE LD. ASSESSING OFFICER WHILE AS THE LD. A.R. ARGUED IN SUPPORT OF THE ORDER OF THE LD. CIT (A) REITERATING THE SUBMISSIONS MADE BEFORE THE LD. CIT (A). ITA NO.2248 /MDS/2014 6 4.4 WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE IT IS NOT DISPUTED THAT THE ASSESSEE TRUST IS A TRUST CREATED SOLELY BY THE PARENT TRUST. THE ACTIVITIES OF THE PARENT TRUST FALLS UND ER THE LIMBS OF SECTION- 2(15) OF THE ACT EDUCATION, RELIEF TO THE POOR, MEDICAL RELIEF, PRESERVATION OF MONUMENTS OF PLACES OR OBJECTS OF ARTISTIC OR HISTORICAL INTEREST OR ADVANCEMENT OF ANY OTHER GEN ERAL PUBLIC UTILITY. THE OBJECTS OF THE ASSESSEES TRUST ARE ONLY IN SUP PORT OF THE ASSESSEES PARENT TRUST. THEREFORE, THE SCOPE OF TH E ASSESSEES TRUST CANNOT GO OUTSIDE THE AMBIT OF THE OBJECTS OF THE P ARENT TRUST BUT IN PARITY WITH THE ASSESSEES PARENT TRUST. HENCE ALL THE ACTIVITIES OF THE ASSESSEES TRUST WHICH ARE ASSOCIATED WITH THE MAIN OBJECTS OF THE ASSESSEES PARENT TRUST HAS TO BE RECOGNIZED IN CON SONANT WITH THE ASSESSEES PARENT TRUST VK VIZ., EDUCATION, RE LIEF TO THE POOR, MEDICAL RELIEF, PRESERVATION OF MONUMENTS OF PLA CES OR OBJECTS OF ARTISTIC OR HISTORICAL INTEREST OR ADVANCEMENT OF ANY OTHER GENERAL PUBLIC UTILITY AND THEREAFTER IF THE PROVISO OF SE CTION-2(15) OF THE ACT IS APPLICABLE TO ANY OF THE ACTIVITY OF THE ASSESSEES TRUST, TO THAT EXTENT THE BENEFIT OF SECTION-11 OF THE ACT ONLY CAN BE WI THDRAWN. IN THIS ITA NO.2248 /MDS/2014 7 CASE BEFORE US THE ISSUE IS WITH RESPECT OF THE SAL E OF BOOKS, MAGAZINES, PICTURES, CALENDARS, DIARIES AND NOVELTI ES ETC., CONTAINING THE PREACHINGS OF SWAMI VIVEKANANDA WHICH IS DIREC TLY ATTRIBUTABLE TO THE UPKEEP OF THE SAMI VIVEKANANDA ROCK MEMORIAL BE CAUSE IT WILL BRING AN AWARENESS TO THE PUBLIC AT LARGE AND INFLU ENCE THEM TO PARTICIPATE IN THE CAUSE OF THE PARENT TRUST WHOS ONE OF THE OBJECTS IS PRESERVATION OF MONUMENTS OF PLACES OR OBJECTS OF ARTISTIC OR HISTORICAL INTEREST. THEREFORE AS PER OUR DISCUSSI ONS HEREIN ABOVE CONSIDERING THE ACTIVITIES OF THE ASSESSEE TRUST WH ICH IS ASSOCIATED WITH THE OBJECT OF THE ASSESSEES PARENT TRUST VIZ. , PRESERVATION OF MONUMENTS OF PLACES OR OBJECTS OF ARTISTIC OR HISTO RICAL INTEREST, WE HEREBY HOLD THAT PROVISO TO SECTION-2(15) OF THE AC T WOULD NOT BE APPLICABLE TO THE CASE OF THE ASSESSEE. THEREFORE, WE HEREBY DIRECT THE LD. ASSESSING OFFICER TO ALLOW THE BENEFIT OF S ECTION.11 TO THE ASSESSEE. 5.1 GROUND NO.2 - ALLOWING THE CLAIM OF THE DEPRECI ATION AMOUNTING TO ` 35,447/-. WE FIND THAT THIS ISSUE IS NOT RAISED BEFORE THE LD. CIT (A) AND THEREFORE THERE IS NO ADJUDICATION OF THE SAME BY T HE LD. CIT (A). ITA NO.2248 /MDS/2014 8 MOREOVER, THERE IS NO DESCRIPTIVE DISCUSSION ON THI S ISSUE BY THE LD. ASSESSING OFFICER IN HIS ORDER. THEREFORE, THIS ISS UE IS REMITTED BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR FRESH CONSIDERATION. CROSS OBJECTION :- 5.2 GROUND NO. 1 - LD. CIT (A) ERRED BY HOLDING TH AT THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT EDUCATION BUT IN THE N ATURE OF ADVANCEMENT OF GENERAL PUBLIC UTILITY. IN THE GROUND NO.1 OF THE REVENUE, WE HAVE CATEGO RICALLY HELD THAT THE ACTIVITIES OF THE ASSESSEE TRUST WHICH IS ASSOCIATED WITH THE ACTIVITY OF THE PARENT TRUST HAS TO BE TREATED IN P ARITY WITH ACTIVITY OF THE ASSESSEES PARENT TRUST AND ACCORDINGLY IN THE CASE OF THE ASSESSEE TRUST WE HAVE HELD THAT THE ACTIVITY OF TH E ASSESSEE TRUST HAS TO BE TREATED AS AN ACTIVITY IN THE NATURE OF PRESERVATION OF MONUMENTS OF PLACES OR OBJECTS OF ARTISTIC OR HISTO RICAL INTEREST, AND THEREFORE THE PROVISO TO SECTION.2(15) WOULD NOT BE ATTRACTED. THUS THIS CO OF THE ASSESSEE IS DISPOSED IN FAVOUR OF TH E ASSESSEE BY GRANTING BENEFIT TO THE ASSESSEE U/S. 11 OF THE ACT . ITA NO.2248 /MDS/2014 9 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AS INDIC ATED HEREIN ABOVE. ORDER PRONOUNCED ON 15 TH JULY, 2015 AT CHENNAI. SD/- SD.- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 15 TH JULY, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. 7' 8+ /GF