DCIT (E), New Delhi V. M/s Lahore Hospital Society, New Delhi

ITA 100/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5720 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 06-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SONI KAPIL
• Assessee Lawyers: R K KAPOOR
• Keywords: Set aside
• Section: 143(3); 12; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BEN CH, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER, ITA NO. 100/DEL/2016 [ASSESSMENT YEAR: 2011-12] DCIT(E), CIRCLE-1(1), E-2 BLOCK, PRATAYKSH KAR BHAWAN, DR. SHYAMA PRASAD MUKHERJEE CIVIC CENTRE, NEW DELHI-110002 LAHORE HOSPITAL SOCIETY C/O- B.L.KAPOOR MEMORIAL HOSPITAL PUSA ROAD, NEW DELHI-110005 PAN - AAATL0242R APPELLANT RESPONDENT REVENUE BY SHRI NAINA SONI KAPIL CIT - DR ASSESSEE BY SHRI PRADEEP DINODIA & SHRI R. K. KAPOOR DATE OF HEARING 06 /08 /2019 DATE OF PRONOUNCEMENT 07 /08 /2019 ORDER PER T. S. KAPOOR, ACCOUNTANT MEMBER, THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-40, DATED 19/10/2015. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTI ONS U/S 11 & 12 OF THE ACT IGNORING THAT THE ACTIVITIES OF THE TRUST W HICH ARE AIMED AT PROFIT MAKING AND WERE NOT WITHIN THE PURVIEW OF TH E SECTION 2(15) OF THE ACT, 1961 DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXE MPTIONS U/S 11& 12 2 ITA NO.100/DEL/2016 OF THE ACT DISREGARDING THE FACT THAT AS PER VARIOU S CLAUSES OF MANAGEMENT AGREEMENT, IT HAS ACTUALLY BEEN ESTABL ISHED THAT THE KAPUR HOSPITAL, DELHI HAS BEEN TRANSFERRED TO M/S I NTEGRATED HEALTH AND HEALTH CARE SERVICES PVT. LTD. AND THE SOCIETY NO CONCERN WITH THE ACTIVITIES OF THE HOSPITAL. 2. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE CAS E OF THE ASSESSEE IS SQUARELY COVERED BY EARLIER ORDER OF THE TRIBUNAL I N THE CASE OF ASSESSEE ITSELF. THE LD. AR SUBMITTED THAT THE ASSESSEE IS REGISTERED SOCIETY UNDER SOCIETIES REGISTRATION ACT AND IS RUNNING HOSPITAL IN THE NAME OF B.L. KAPOOR MEMORIAL HOSPITAL AT LUDHIANA AND NEW DELHI. IT WAS SUBMITTED THAT THE HONBLE TRIBUNAL IN ASSESSMENT YEAR 2003-0 4 HAD ALLOWED THE ISSUE RAISED BY THE DEPARTMENT IN FAVOUR OF THE ASS ESSEE. IN THIS RESPECT OUR ATTENTION WAS INVITED TO PAGES 4 TO 7 OF THE PA PER BOOK, WHERE THE ORDER OF THE TRIBUNAL WAS PLACED. IT WAS SUBMITTED THAT THE AO IN VIEW OF THE ORDER OF THE TRIBUNAL HAD GIVEN EFFECT TO THE D IRECTIONS OF THE TRIBUNAL AND A COPY OF WHICH WAS PLACED IN PAPER BOOK PAGE 8 TO 14. THE LD. AR FURTHER INVITED OUR ATTENTION TO THE FACT THAT THE AO AT HIS OWN FROM AY 2005-06 TO 2009-10 HAD GRANTED THE BENEFIT OF REGIS TRATION U/S 11 OF THE ACT AND IN THIS RESPECT OUR ATTENTION WAS INVITED T O PAPER BOOK PAGES 22 TO 32. THE LD. AR AGAIN INVITED OUR ATTENTION TO THE O RDER OF THE TRIBUNAL FOR AY.2010-11 PLACED AT PAPER BOOK PAGE 32 TO 33. THE LD. AR SUBMITTED THAT AGAIN THE HONBLE TRIBUNAL HAS FOLLOWED EARLIE R ORDER AND THEREFORE, IT WAS PRAYED THAT THE APPEAL FILED BY THE REVENUE BE DISMISSED. 3 ITA NO.100/DEL/2016 3. THE LD. DR HAS FAIRLY AGREED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE HOWEVER SHE PLACED HER RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFF ICER HAD NOT ALLOWED BENEFIT OF SECTION 11 AND 12 OF THE ACT HOWEVER, TH E LD. CIT(A) RELYING ON THE VARIOUS DECISIONS OF THE TRIBUNAL IN THE CASE O F ASSESSEE ITSELF HAS ALLOWED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 4.7. I HAVE CAREFULLY CONSIDERED THE ORDER PASSED BY THE AO AND ALSO THE SUBMISSIONS MADE BY THE AR OF THE ASSESSEE ALONG WITH PAPERS AND DOCUMENTS FILED BEFORE ME, WHICH ARE MAINLY THE ORDER S PASSED BY THE AO FOR AY 2003-04 AND 2004-05 AND ASSESSMENT YEAR 2010- 11, IN WHICH THE ASSESSEE WAS DENIED EXEMPTION U/S 11, 12 AS WELL AS U/S.L0(23C)(VIA) OF THE I.T. ACT. I HAVE ALSO EXAMINED VARIOUS OTHER DOCU MENTS INCLUDING THE MEMORANDUM AND ARTICLE OF ASSOCIATION OF SOCIETY, COPY OF AGREEMENT BETWEEN THE ASSESSEE AND M/S. INTEGRATED HEALTH & H EALTH CARE SERVICES INDIA PVT. LTD. DATED 30.11.2000 AND SUBSEQUENT AME NDMENTS TO THE SAME AND I AM OF THE CONSIDERED OPINION THAT THE AO W AS NOT JUSTIFIED WHILE DENYING THE EXEMPTION U/S.LL AND ALSO U/S.L0(2 3C(VIA) OF THE I.T. ACT. COPIES OF ASSESSMENT ORDERS FOR A.Y. 2003-04 AND 2004 -05 ARE ALMOST IDENTICAL AS HAS BEEN PASSED FOR A.Y. 2011-12. THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE ORDER OF THE HON'BLE DELHI TRIB UNAL IN ASSESSEE'S OWN CASE FOR A.Y. 2003-04 AND A.Y. 2004-05. IT MAY BE OBS ERVED THAT IN SPITE OF THE FACT THAT ASSESSEE WAS ALLOWED EXEMPTION IN AY 20 03-04, THE HON'BLE DELHI ITAT IN A.Y. 2004-05 STILL SET ASIDE THE ISSU E TO THE FILE OF THE AO, BECAUSE THE HON'BLE TRIBUNAL IN A.Y. 2003-04 HAD ALL OWED EXEMPTION ONLY U/S.10(23C)(VIA) OF THE I.T. ACT AND HAS NOT COMMENTE D UPON THE EXEMPTION U/S.11 OF THE I.T. ACT. TO THAT EXTENT, THE HON'BLE ITAT IN A.Y. 2004-05 SET ASIDE THE ISSUE TO THE FILE OF THE AO F OR EXAMINATION AS TO WHETHER THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION U/S. 11 AND 12 OF THE I.T. 4 ITA NO.100/DEL/2016 ACT AS WELL. IN THE REMAND PROCEEDINGS, THE AO HAS R E-ADJUDICATED THE MATTER AND HAS FOUND THE ASSESSEE ELIGIBLE FOR EXEMP TION U/S.11 AND 12 ALSO AS PER ORDER U/S. 143(3) DATED 15.06.2009 (PB 96 -97). SIMILARLY, THE AO HAS MADE ASSESSMENT UNDER SCRUTINY THEREAFTER FOR A.Y. 2005-06. THE ASSESSMENT FOR A.Y. 2009-10 WAS PASSED ON 23.12.2011 . THE AO HAS NOT GIVEN ANY REASONS FOR TAKING A VIEW DIFFERENT THAN WHAT HAS BEEN ACCEPTED IN THE ASSESSMENTS COMPLETED FOR EARLIER YEA RS. IT IS NOT THE CASE OF THE AO THAT ASSESSEE SOCIETY HAS CHANGED ITS OBJE CTS OR VIOLATED ANY PROVISIONS OF THE LAW TO DISENTITLE IT FOR THE BENEFI TS U/S.11 AND 12 AND 10(23C)(VIA) OF THE I.T. ACT. THE REGISTRATIONS U/S .12A, 80G, 10{23C)(VI) REMAINS IN TACT. THAT BEING THE ACCEPTED HISTORY OF THE CASE AND ALSO ON ACCOUNT OF THE FACT THAT THERE IS NO CHANGE IN THE OB JECTS OR THE ACTIVITIES OF THE ASSESSEE SOCIETY, THERE WAS NO REASON FOR THE AO TO DEVIATE FROM THE SETTLED HISTORY OF THE ASSESSEE AND TAKE A DIFFE RENT VIEW OF THIS MATTER. THE ASSESSEE HAS ALSO SUBMITTED ITS AUDITED INCOME AN D EXPENDITURE A/C, FROM WHERE IT IS NOTED THAT THE ASSESSEE SOCIETY IS R UNNING INTO HUGE DEFICIT. ON THIS SCORE ALSO, THERE COULD NOT BE ANY QUESTION OF DETERMINING THE TAXABLE INCOME OF THE SOCIETY DURING THE CURRENT ASSESSMENT YEAR. THEREFORE, AFTER CONSIDERING ALL THE FACTS AND CIRCUM STANCES, THE AO'S REASONS AS ALSO SUBMISSIONS OF THE ASSESSEE, I HOLD TH AT THERE IS NO PROPER JUSTIFICATION FOR DENYING THE DEDUCTION U/S.11, 12 AS ALSO U/S. 10(23C)(VIA) OF THE I.T. ACT AND AO IS DIRECTED TO ALLOW THE SAME AND ALL THE CONSEQUENTIAL BENEFIT S. 5. WE FURTHER FIND THAT DURING THE ASSESSMENT YEAR 2010-11 I.E. IMMEDIATELY PRECEDING YEAR, THE HONBLE TRIBUNAL VI DE ORDER DATED 17/01/2018 HAD DISMISSED THE APPEAL OF THE REVENUE BY HOLDING AS UNDER:- 3. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOT H THE SIDES AND THE LIGHT OF THE RECORDS PLACED BEFORE US AND THE TRIBUN AL ORDERS IN ASSESSEES OWN CASE FOR BERRIES ASSESSMENT YEARS FROM 2003-04 TO 2 009-10 AS WELL AS THE VARIOUS ASSESSMENT ORDERS PASSED FOR THE SUBSEQ UENT ASSESSMENT YEARS. 5 ITA NO.100/DEL/2016 3.1. IT IS OBSERVED THAT THIS TRIBUNAL FOR THE 1ST TIME FOR ASSESSMENT YEAR 2004-05 CONSIDERED THIS ISSUE OF EXEMPTION UNDER SE CTION 11 AND 12 AS UNDER: 2.5 ON PERUSAL OF THIS ORDER WE FIND THAT THE TRIB UNAL HAS CONSIDERED ABOUT THE ASSESSEE'S CLAIM OF' EXEMPTION UNDER SECTI ON 10(23C)(VIA) AND HELD THAT THERE IS NO REASON FOR THE ASSESSING OFFI CER TO DENY EXEMPTION TO THE ASSESSEE UNDER THE AFORESAID PROVISIONS. HOWEVER, IN THE ISSUE BEFORE US THE ASSESSEE'S CLAIM OF EXEMPTION UNDER SECTION 11 & 12 IS ALSO AN ISSUE FOR CONSIDERATION. WE, THEREFORE, SET ASIDE TH E ORDERS OF THE AUTHORITIES BELOW AND REMAND THE MATTER BACK TO THE AS SESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AFTER ALLOWING THE EXE MPTION TO THE ASSESSEE UNDER SECTION 10(23C)(VIA) AND ALSO AFTER EX AMINING THE ASSESSEE'S CLAIM UNDER SECTION 11 & 12 WHICH WAS AL SO ALLOWED BY THE CIT(APPEALS) IN EARLIER YEARS. 3.2. SUBSEQUENTLY ASSESSING OFFICER DECIDED THE ISS UE FOR ASSESSMENT YEAR 2004-05 AS UNDER: AS PER THE DIRECTION OF THE HONBLE ITAT, NOTICE U/S 143(2) OF THE IT ACT WAS ISSUED ON 22.3.2009. IN RESPONSE TO THE SAID NOTIC E, SHRI BM CHATRATH, CA, APPEARED FROM TIME TO TIME AND FILED DETAILS. TH E CASE WAS DISCUSSED WITH HIM. THE ASSESSEE HAS EXPLAINED THAT THE AGREE MENT WITH IHHS HAS BEEN RETAINED TO MANAGE THE HOSPITAL AND ASSIST THE S OCIETY IN ACHIEVING ITS OBJECTIVES ON THE TERMS AND CONDITIONS AGREED U PON. IT HAS FURTHER EXPLAINED THAT ALL THE RECEIPTS HAVE BEEN APPLIED F OR THE PURPOSE OF FULFILMENT OF THE OBJECTS OF THE SOCIETY. 3.3. IT IS OBSERVED THAT FOR ALL THE OTHER ASSESSMENT YEARS, ASSESSING OFFICER HAS NOT DRAWN ANY ADVERSE OPINION AND HAS GRA NTED EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. 3.4. UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY RE ASON TO DIFFER FROM THE VIEW TAKEN BY LD.CIT(A), AND THE SAME IS UPHELD . ACCORDINGLY THE GROUNDS RAISED BY REVENUE STANDS DISMISSED 4. IN THE RESULT APPEAL FILED BY REVENUE STANDS DIS MISSED. 6. WE FIND THAT THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN THE PRESENT APPEAL ARE SIMILAR TO THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN EARLIER YEAR, THEREFORE, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS ALLOWED RELIEF TO THE ASSESSEE BY FO LLOWING THE JUDICIAL 6 ITA NO.100/DEL/2016 PRECEDENTS AVAILABLE IN THE CASE OF ASSESSEE ITSELF . THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 7. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/08/ 2019. SD/- SD/- [BHAVNESH SAINI] [T.S. KAPOOR] JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI; DATED: 07/08/2019. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI