ITO (E), New Delhi V. Maruti Centre for Excellence, New Delhi

ITA 1062/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4093 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 10-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 143(3); 80G; 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH-E, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A.NO.1062/DEL/2010 ASSESSMENT YEAR 2006-07 INCOME-TAX OFFICER (E), VS. MARUTI CENTRE FOR EXCE LLENCE TRUST WARD-IV, PLOT NO.1, NELSON MANDELA ROAD, NEW DELHI. VASANT KUNJ, NEW DELHI-110070. PAN:AAATM7499K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.S. SAHOTA, SR. D.R. RESPONDENT BY : SHRI AJAY VOHRA, ADVOCATE O R D E R PER SHAMIM YAHYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R OF THE CIT(A)-XXI, NEW DELHI DATED 4.12.2009 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. GROUND RAISED IN THE APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW B ENEFITS OF SECTION 11 & 12 EVEN WHEN THE ACTIVITIES OF THE ASSESSEE ARE FOR THE SOLE BENEFITS OF FOUNDER M/S M ARUTI UDYOG LIMITED AND THE BENEFITS BEING PROVIDED ARE I N VIOLATION OF PROVISIONS OF SECTION 13(1)(C) READ WI TH SECTION 13(3) OF THE ACT. ITA NO.1062/DEL/2010 2 3. BRIEF FACTS ARE THAT THE ASSESSEE FILED ITS RETU RN OF INCOME FOR ASSESSMENT YEAR 2006-07 DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) OF THE ACT AT AN INCOME OF RS .1,55,62,640/- BY DISALLOWING EXEMPTION U/S 11 OF THE INCOME-TAX A CT ON THE GROUND THAT INCOME OF THE SOCIETY HAS BEEN USED OR APPLIED FOR THE BENEFIT OF PERSON REFERRED TO IN SECTION 13(3) AND, THEREFORE, THE SOCIETY IS IN INFRINGEMENT OF SECTION 13(1)(II) OF THE ACT. HE A LSO OBSERVED THAT FACTS OF THE CASE IN THIS YEAR REMAINS THE SAME AS IN THE PREVIOUS YEAR. 4. UPON ASSESSEES APPEAL, LD. CIT(A) CONSIDERED TH E ISSUE AND HELD THAT A PLAIN READING OF THE ACT AND EXAMINATIO N OF BALANCE-SHEET AND INCOME AND EXPENDITURE ACCOUNT SHOWED THAT THE ASSESSEE HAD NOT VIOLATED THE PROVISIONS OF SECTION 13(1)(C)(II) R/W SECTION 13(3)(B). HE NOTED THAT ON THE SAME SET OF FACTS, SIMILAR VIE W HAD BEEN TAKEN BY HIS PREDECESSOR IN ASSESSEES OWN CASE FOR THE A SSESSMENT YEAR 2005-06. ITAT, DELHI BENCH-E HAD ALSO UPHELD THE F INDINGS OF THE CIT(A) FOR ASSESSMENT YEAR 2005-06 AND DISMISSED TH E APPEAL OF THE REVENUE VIDE ORDER DATED 2.9.2009. FURTHER, REFERR ING TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. SU RAT CITY GYMKHANA, 300 ITR 214 (SC), THE LD. CIT(A) OBSERVED THAT THE SAID ITA NO.1062/DEL/2010 3 DECISION HAS SETTLED THE LEGAL POSITION THAT ONCE E XEMPTION HAS BEEN GRANTED BY WAY OF REGISTRATION BY THE DIT(E) U/S 12 A AND SECTION 12AA OF THE INCOME-TAX ACT, THE ASSESSING OFFICER C ANNOT OVERRIDE THE EXEMPTION AND NOT GIVE EFFECT TO IT WHILE PASSI NG THE ASSESSMENT ORDER. LD. CIT(A) ALSO REFERRED TO THE DECISION OF THE ITAT, CHANDIGARH BENCH IN THE CASE OF ITO VS. TRILOK TIRA TH VIDYAWATI CHUTTANI CHARITABLE TRUST, (2004) 90 ITD 569. HE H ELD THAT IN THE ABSENCE OF ANY SPECIFIC FINDING BY THE ASSESSING OF FICER REGARDING THE PROFIT MOTIVE OF THE ASSESSEE OR NATURE OF HIS ACTIVITY BEING OF BUSINESS, THE ASSESSEE CANNOT BE HELD TO BE IN VIOL ATION OF SECTION 11(4A) MERELY ON ACCOUNT OF NON-MAINTENANCE OF SEPA RATE OF BOOKS OF ACCOUNT. ACCORDINGLY, THE LD. CIT(A) DIRECTED T HE ASSESSING OFFICER TO ALLOW EXEMPTION U/S 11 AND 12 OF THE ACT TO THE ASSESSEE- SOCIETY. HENCE, THE PRESENT APPEAL BY THE REVENUE BEFORE US. 5. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE PARTIE S AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. BOTH THE COUNSEL FAIRLY AGREED THAT THE ISSUE NOW STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, DELHI BENCH-E RENDERED IN ASSESSEE'S OWN CASE IN I.T.A.NO.897/DEL/2009 ORDER DATED 2.9.2009 FOR THE PRECEDING ASSESSMENT YEAR. THE RELEVANT OBSERVATIO NS OF THE TRIBUNAL ARE REPRODUCED HEREUNDER:- ITA NO.1062/DEL/2010 4 3. HAVING HEARD THE ARGUMENTS OF THE LD. DR SUPPOR TING THE GROUNDS OF APPEAL RAISED, WE DO NOT FIND ANY MERIT THEREIN. THE LD. CIT(A) FOUND AS UNDISPUTED FACTS THAT REGIS TRATION U/S 12A OF THE I.T. ACT, AS GRANTED TO THE ASSESSEE , W AS FOLLOWED FOR THE PERIOD UNDER CONSIDERATION; THAT DURING THI S PERIOD, A CERTIFICATE U/S 80G OF THE ACT HAD ALSO BEEN GRANTE D TO THE ASSESSEE; THAT THEREFORE, THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S 11 OF THE ACT; THAT AS PER THE ASSESS EES BALANCE SHEET AND INCOME & EXPENDITURE ACCOUNT, NO INCOME OR ASSET OR PROPERTY OF THE SOCIETY HAD BEEN USED O R APPLIED DURING THE YEAR FOR THE BENEFIT OF OTHER THE SETTLO R OR THE MARUTI UDYOG LIMITED; THAT THE INCOME OF THE ASSESSEE SOCI ETY WAS MAINLY FROM INTEREST ON FIXED DEPOSITS AND BONDS, D ATA PROCESSING CHARGES, CONSULTANCY FEE, TRAINING PROGR AMME FEE AND INCENTIVE RECEIVED; THAT NONE OF THESE ITEMS CO ULD BE SAID TO HAVE BEEN USED FOR THE BENEFIT OF THE SUPPLIER; THAT THE ASSETS IN THE BALANCE SHEET OF THE ASSESSEE WERE FI XED ASSETS, INVESTMENTS IN RBI BONDS, FIXED DEPOSITS WITH BANKS , CURRENT ASSETS AND LOANS AND ADVANCES; THAT NONE OF THEM HA D BEEN PLACED WITH THE SETTLOR OR THE MARUTI YDYOG LIMITED ; THAT THEREFORE, 13(1)(C)(II) OF THE ACT WAS NOT ATTRACTE D; AND THAT NEITHER IN THE ASSESSMENT ORDER, NOR IN THE REMAND REPORT SUBMITTED BEFORE THE CIT(A), HAD THE AO BROUGHT OUT ANY SUCH USER OF THE INCOME OR THE ASSETS OF THE SOCIETY FOR THE BENEFIT OF THE SETTLOR OR THE MARUTI UDYOG LIMITED. 4. THE ABOVE FACTS, AS NOTED BY THE LD. CIT(A) WHIL E DECIDING IN FAVOUR OF THE ASSESSEE, REMAIN PATENT O N RECORD. NO MATERIAL TO THE CONTRARY HAS COME ON THE FILE. AS SUCH, THE ITA NO.1062/DEL/2010 5 LD. CIT(A) CANNOT BE SAID TO HAVE COMMITTED ANY ERR OR IN PASSING THE IMPUGNED ORDER. THE FINDINGS OF THE LD. CIT(A) ARE THEREFORE UPHELD AND THE GROUNDS RAISED BY THE DEPA RTMENT ARE REJECTED. 6. ADHERING TO THE DOCTRINE OF STARE DECISES , WE F IND NO JUSTIFICATION TO INTERFERE WITH THE WELL-REASONED ORDER PASSED BY TH E LD. CIT(A) IN THIS REGARD. WE UPHOLD THE ORDER OF THE LD. CIT(A) AND REJECT THE GROUND RAISED BY THE REVENUE IN ITS APPEAL. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.5.2010. SD/- SD/- ( R.P. TOLANI ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12.5.2010. VSK COPY TO:- 1. APPELLANT-REVENUE 2. RESPONDENT- ASSESSEE 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. DEPUTY REGISTRAR