GURUDWARA SHAHEED BABA NIHAL SINGH, JALANDHAR` V. D.C.I.T, CIRCLE -1 (EXEMPTION), , CHANDIGARH

ITA 1049/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3781 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 24-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10; 15; 12A

Judgement Text

आयकर य कर , य य “ए एए ए”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’, CHANDIGARH BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 1049/Chd/2019 (Assessment Year: 2016-17) Gurudwara Shaheed Baba Nihal Singh, VPO Talhan, Jalandhar. बनाम Deputy Commissioner of Income-tax, (Exemptions),Circle-1, Chandigarh. थायी लेखा सं./PAN NO: AABTG 6247 N नधा रती क ओर से/Assessee by : Shri Nirmal Mahajan, CA राज व क ओर से/ Revenue by : Shri M.P. Dwivedi, Sr. D.R स ु नवाई क तार ख/Date of Hearing: 24.03.2022 उदघोषणा क तार ख/Date of Pronouncement: 26 .04.2022 आदेश/ORDER Per Vikram Singh Yadav, Accountant Member: This is an appeal filed by the assessee against the order of Learned Commissioner of Income Tax ( A p p e a l s ) - 2 , J a la n d h a r [ i n s h o r t t h e ‘ L d . C I T( A ) ’ ] d a t e d 0 8 . 0 5 . 2 0 1 9 w h e r e i n t he l i m i t e d i s s u e r e l a t e s t o a d d i t io n o f R s . 7 7 , 0 0 ,0 0 0 / - p a i d b y th e a s s e s s e e t o S h a h e e d B a b a N i h a l S i n g h C h a r i t a b l e H o s p i t a l d u r i n g t h e y e a r u n d e r c o n s i d e r a t i o n . 2 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar. 2 . B r i e f l y t h e f a c t s o f t h e c a s e a r e t h a t t h e a s s e ss e e i s a r e g i s t e r e d s o c i e t y r e g i s t e r e d u n d e r t h e S o c i e t i e s Re g i s t r a t i o n A c t a s w e l l a s u n d e r s e c t i o n 1 2 A o f t h e I n c o m e - t a x A c t , 1 9 6 1 ( t he A c t ) . D u r i n g t h e y e a r u n d e r c o n s i d e r a t i o n t h e a s s es s e e h a s p a i d a s u m o f R s . 7 7 ,0 0 , 0 0 0 / - t o S h a he e d B a b a N i h a l Si n gh C h a r i t a b l e H o s p i t a l f o r m ed i c a l r e l i e f a n d t h e A O h a s t re a t e d t h e s a i d p a y m e n t a s t h e a m o u n t c o v e r e d u n d e r s e c t i o n 1 3 ( 1 ) ( c) r e a d w i t h s e c t i o n 1 3 ( 3 ) a n d h a s h e l d t h a t i t c a n n o t b e t r e a t ed a s a n a p p l i c a t i o n o f i n c o m e u n d e r s e c t i o n 1 1 ( 1 ) o f t h e A ct . A s p e r t h e A O , t h e f u n d s o f t h e s o c i e t y h a v e b e e n d i v e r t e d a nd t r a n s f e r r e d t o i t s s i s t e r s o c i e t y w h i c h i s e n g a g e d i n a c t i v i t i e s ot h e r t h a n r e l i g i o u s p u r p o s e s . I t h a s a l s o b e e n h e l d b y t h e A O t h a t t h e i n c o m e o f t h e s o c i e t y h a s n o t t h e r e f o r e b e e n a p p l i ed t o w a r d s r e l i g i o u s p u r p o s e s f o r w h i c h i t w a s s e t u p a n d , t h er e f o r e , t h e u t i l i z a t i o n o f f u nd s o f t h e a s s e s se e s o c i e t y h a v e be e n h e l d t o be n o t f o r t h e p u r p o s e s f o r w h i c h i t w a s f o r m e d . B e s id e s d i s a l l o w i n g t h e s u m o f R s . 7 7 , 0 0 , 0 0 0 / - , t h e A O h a s a l s o d e n i e d t h e c l a i m o f e x e m p t i o n u n d e r s e c t i o n 1 1 o f t h e A c t a n d h a s a s s e ss e d t h e i n c o m e o f t h e a s s e s s e e t r u s t a s a n A O P . 3 . B e i n g a g g r i e v e d , t h e a s s e s s e e c ar r i e d t h e m a t t e r i n a p p e al b e f o r e t h e l d . CI T ( A ) . Th e l d . C I T ( A ) f o l l o w i n g h i s o r d e r f o r t h e 3 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar. p r e c e d i n g a s s e s s m e n t y e a r i . e . A .Y . 2 0 1 4 - 1 5 h a s d i re c t e d t h e A O t o a l l o w t h e c l a im o f e x e m p t i o n un d e r s e c t i o n 1 1 of t h e A c t o n t h e s u r p l u s i n c o m e , i f a n y , f o r t h e y e a r u n d e r c o n s i d e ra t i o n . H o w e v e r , a s f a r a s t h e a m o u n t o f R s . 7 7 , 0 0 , 0 0 0 / - w as c o n c e r n e d , t h e s a m e h a s b e e n t r e a t e d a s a n a m o u n t n o t f o r t h e p u r p o s e r e l a t e d t o a c t i v i t i e s o f t h e Tr u s t a n d h a s b e e n t r ea t e d a s n o n a p p l i c a t i o n o f i n c o m e s u b j e c t t o t a x a t i o n a t m ax i m um m a r g i n a l r a t e . A g a i n s t t h e s a i d f i n d i n g s o f t h e l d . C I T ( A ) wh e r e i n t h e s u m o f R s . 7 7 , 0 0 , 0 0 0 / - h a s b e e n t r e at e d a s n o n a p p l ic a ti o n o f i n c o m e a n d b r o u g h t t o t a x , t h e a s s e s s e e i s i n a p p e a l b e f o re u s . 4 . D u r i n g t h e c o u r s e o f h e a r i n g b o t h t h e p a r t i e s s ub m i t t e d t h a t t h e s i m i l a r i s s u e h a d a r i s e n e a r l i e r d u r i n g t h e a s se s s m e n t y e a r 2 0 1 4 - 1 5 a n d t h e m a t t e r h a s t r a ve l l e d u p t o t h e Tr i b un a l a n d t h e C o o r d i n a t e B e n c h h a d a n o c c a s i o n t o e x a m i n e t h e s a id m a t t e r i n I TA N o s . 1 3 8 2 / Ch d / 2 0 1 8 a n d 1 39 8 / C h d / 2 0 1 8 d a t e d 2 0 . 08 . 2 0 1 9 a n d t h e m a t t e r h a s b e e n s e t a s i d e t o t h e f i l e o f t he l d . C I T ( A ) t o d e c i d e a f r e s h a f t e r b r i n g i n g a l l r e l e v a n t f a c t s o n r e c o r d . I n t h is r e g a r d o u r r e f e r e n c e w a s d r a w n t o t h e f i n d i n g s o f th e C o o r d i n a t e B e n c h w h i c h c o n t a i n e d i n p a r a 7 t o 1 0 r e a d s a s u n d er : - “7. Fro m the perusal of the orders of the au thorities belo w, it is clear th at the dis allo wance h as been made by the AO of the amoun t of Rs.51,50,000/- donated by 4 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar. the assessee to its alleged sis ter concern Sh aheed Bab a N ih al S ingh Char itable Hospital wh ich had util ized the amount f or mak in g pay men t of sal ar ies to its doctors. T he f act th at th e assessee is wholly a relig ious trus t is an ad mitted f act. T he disallo wance has been made f or two re asons: 1) T he amoun t donated to its s ister concern was no t f or the purpose f or wh ich the assessee trus t was set up i.e. it was no t f or the purpose of any relig ious ac tiv ity being donatio n made to hospital. 2) T he donation was made to a related concern which had benef ited by s aid donation and, theref ore, the provis ions of section 13(1)(c) read with s ection 13(3) of the Act were attr ac ted . 8. Vis- à-v is the f irst ch arge of the Revenue th at the appl ic ation was not f or its s tated purposes, the f acts e man ating f ro m the record, we f ind are not suf f icien t to establ ish th is charge. Undisputedly, the amount was paid to the hospital wh ich had also been gran ted regis tr ation u/s 12A of the Act. T he consis ten t plead ing of the assessee bef ore the AO and the C IT (A), we f ind, has been th at the don atio n was made was in consonance with its s tated relig ious objec ts wh ich included service to hu man ity and hu man itar ian purpose. In th is backdrop, we f ind, the f ac ts relating to the hospital ne ed f urther investig ation whe th er it was being run on purely char itabl e lines with very lo w f ees or no f ees being charged f rom p atien ts or other wise. 5 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar. Since it is only then it c an b e said th at the donation made by the assessee was in f urtherance of its relig ious objec tives of serving hu man ity. 9. As f ar the denial of exe mp tion f or the reason that by vir tue of this donation a related person of the assessee had been benef ited, the Ld. DR himself poin ted ou t th at there is no f inding of f act as to ho w the hospital was rel ated to the assessee socie ty in ter ms of the def inition so provided u/s 13(3) of the Act. In the absence of th is essential f act the appl icab il ity of section 13(1)(c) of the Act c annot be enf orced. 10. For the af oresaid re asons we consider it f it to restore the iss ue back to the C IT (A) to ad ju dic ate the issue af resh af ter bring ing out all relevan t f acts on record as poin ted above and any o ther f acts considered necessary b y him f or ad jud ic ating the issue at h and. Needless to add the assessee be gran ted adequate opportun ity of being he ard an d the issue thereaf ter be decided in accordance with l aw. ” I n l i g h t o f a f o r e s a i d d i s c u s s i o n a n d c o n s i d e r i n g t he m a t e r i a l a v a i l a b l e o n r e co r d , f o l l o w i n g t he d e c i s i o n o f C oo rd i n a t e B e n c h , t h e m a t t e r i s s e t a s i d e t o t h e f i l e o f t h e l d . CI T ( A ) t o a d j u d i c a t e t h e i s s u e a f r e s h a s p e r l a w a f t e r p r o v i d i n g r e a s o n ab l e o p p o r t u n i t y t o t h e a s s e s s e e . 6 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar. 5 . I n t h e r e s u l t , t h e a p p e a l o f t h e a s s e s s e e i s a l lo w e d f o r s t a t i s t i c a l p u r p o s e s . O r d e r p r o n o u n c e d o n 2 6 . 0 4 . 2 0 2 2 . S d / - S d / - ( DIVA SINGH ) (VIKRAM SINGH YADAV) याय क सद य/Judicial Member लेखा सद य/Accountant Member Dated: 26 .04.2022 *Das* आदेश क % त&ल'प अ*े'षत/ Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar Draft dictated 22.04.2022 Sr.PS Draft placed before author 22.04.2022 Sr.PS Approved Draft comes to the Sr.PS/PS 26.04.2022 Sr.PS Order signed and pronounced on File sent to the Bench Clerk 27.04.2022 Sr.PS Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order. 7 ITA No 1049/Chd/2019 Gurudwara Shaheed Baba Nihal Singh, Jalandhar.