Shri Lakshmi Narayan Educational Institute , Kolkata V. DDIT (Exemption) - 1, Kolkata , Kolkata

ITA 1068/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0337 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-02-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 21-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI RAY
• Assessee Lawyers: A K GUPTA
• Keywords: Charitable institution
• Section: 143(3); 22; 10(23C)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. P.M. JAGTAP, VICE PRESIDENT AND SH. S.S.GODARA, JUDICIAL MEMBER ITA NO. 1068/KOL/2018 [ASSESSMENT YEAR: 2011-12 ] SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE, BIRLA BUILDING-11 TH FLOOR, 9/1, R.N.MUKHERJEE ROAD, KOLKATA-700 001. PAN- AABTS 6054 R VS DDIT (EXEMPTION) - 1, KOLKATA, KOLKATA. (APPELLANT) (RESPONDENT) APPELLANT BY SH. A.K. GUPTA, FCA. RESPONDENT BY SH. DHRUBAJYOTI RAY, JCIT . DATE OF HEARING 10.02.2020 DATE OF PRONOUNCEMENT 19 .06.2020 ORDER PER SH. S.S. GODARA, JUDICIAL MEMBER : THIS ASSESSEES APPEAL FOR AY 2011-12 ARISES AGAINST THE ORDER DATED 14.10.2017 PASSED BY THE COMMISSIONER OF INCOME TAX-25, KOLKATA IN APPEAL NO.200/CIT(A)-25/KOL./2014-15 IN PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. CASE FILE SUGGESTS THAT ALTHOUGH THE ASSESSING OFFICER'S REGULAR ASSESSMENT FRAMED ON 01.03.2014 HAS ACCEPTED THE ASSESSEE'S RETURN OF INCOME OF 1,81,29,260/- IN HIS ASSESSMENT ORDER DATED 10.03.2014, HE HAS OBSERVED THAT GOING BY THE ADDL. DIT(INV.), RANCHI'S REPORT U/S 131(D) OF THE ACT SUFFICIENTLY SUGGESTING THE ASSESSEE NOT TO HAVE RUN THE TWO SCHOOLS NAMELY SARASWATI SISHU MANDIR, PANDRANI & SARASWATI SISHU MANDIR, RAJNAGAR. THE ASSESSING OFFICER ACCORDINGLY CONCLUDED THAT THE SAID ITA NO. 1068/KOL/2018 ASSESSMENT YEAR: 2011-12 SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE PAGE | 2 FINDINGS; ALTHOUGH DO NOT HAVE DIRECT IMPACT ON THE IMPUGNED ASSESSMENT YEAR'S ASSESSMENT, THE SAME NEED TO BE NOTED FOR FUTURE REFERENCE SO AS TO DECLINE THE ASSESSEE'S EXEMPTION CLAIM U/S 10(23C)(IVAD) OF THE ACT IN CASE ITS INCOME FALLS BELOW 1 CRORE. THE CIT(A) HAS ALSO AFFIRMED THE ASSESSING OFFICER'S FINDINGS TO THIS EFFECT. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE LOWER AUTHORITIES' FOREGOING CONCLUSION. IT IS NOT IN DISPUTE THAT THE ASSESSEE'S INCOME DERIVED IN THE IMPUGNED ASSESSMENT YEAR BY WAY OF DIVIDEND AND INTEREST AND PROFIT ON SALE OF INVESTMENT IS TO THE TUNE OF 2,33,83,072/-. THE CORRESPONDING EXPENSES READ A FIGURE OF 1,66,59,022/-. IT FURTHER SOUGHT TO HAVE CLAIMED A SUM OF 74,535/- QUA THE TWO FOREGOING SCHOOLS AND ALSO SUBMITTED THE RELEVANT CERTIFICATES ISSUED FROM THE TWO VILLAGES CONCERNED. THE ASSESSING OFFICER APPOINTED A COMMISSION AT RANCHI. THE ADDL. DIT(INV.) INTER-ALIA SUBMITTED THAT THE FORMER SCHOOL SARASWATI SISHU MANDIR, PANDRANI STOOD ESTABLISHED IN THE YEAR 2007 UP TO PRIMARY LEVEL HAVING 4-5 TEACHERS AND 100-125 STUDENTS. LATTER SCHOOL WAS STATED TO HAVE BEEN SET UP AROUND 10 YEARS BACK HAVING ALMOST EQUAL NUMBER OF TEACHERS AND STUDENTS. THE ADDL. DIT(INV.) FURTHER REPORTED THAT THE OFFICE BEARERS OF THE SAID TWO SCHOOLS HAD DEPOSED THAT THEY RECEIVED FUNDS FROM A VILLAGE LEVEL SAMITI THROUGH ONE SRI PRAMOD. THIS MADE THE ASSESSING OFFICER TO NOTE THE IMPUGNED FUTURE REFERENCE QUA ASSESSEE'S SECTION 10(23C) CLAIM. THE CIT(A) HAS AFFIRMED THE ASSESSMENT FINDINGS. ITA NO. 1068/KOL/2018 ASSESSMENT YEAR: 2011-12 SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE PAGE | 3 4. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED SO-CALLED FUTURE REFERENCE, WE FIND NO SUBSTANCE TO SUSTAIN THE IMPUGNED ACTION. CASE RECORDS INDICATE THAT THE ASSESSEE IS A DULY REGISTERED SOCIETY SINCE 08.05.1987. ASSESSMENT ORDERS FOR AYS 1990-91, 1992-93 TO 1995-96 AND 1998-99; ALL PASSED U/S 143(3) OF THE ACT, REVEAL THAT IT HAD BEEN CARRYING OUT EDUCATIONAL ACTIVITIES ONLY HAVING THE VERY OBJECT IN ITS MEMORANDUM DATED 27.05.1986. COUPLED WITH THIS, THE CCIT, KOLKATA-IIIS ORDER DATED 22.09.2011 HAS ALSO GRANTED IT SECTION 10(23) EXEMPTION FOR AY 2011-12 AND ONWARDS. IT IS THEREFORE A CASE WHERE IN THE ASSESSEE HAS BEEN GRANTED REGISTRATION ON THE ONE HAND WHEREAS THE ASSESSING OFFICER SEEKS TO DECLINE THE SAME IN THE IMPUGNED ASSESSMENT FOR THE PURPOSE OF FUTURE REFERENCE. 5. WE FURTHER NOTE FROM A PERUSAL OF THE CASE RECORDS THAT THE COMMISSION APPOINTED AT THE ASSESSING OFFICER'S BEHEST HAD ALSO FOUND THE VERY TWO SCHOOLS WHICH ARE ALSO DISCUSSED IN THE EARLIER REGULAR ASSESSMENTS. THE SAME LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE ASSESSEE HAS BEEN PERFORMING EDUCATIONAL ACTIVITIES AT ITS OWN LEVEL AS WELL AS CONTRIBUTING TO EDUCATIONAL INSTITUTIONS. VARIOUS CASE LAW I.E. CIT VS. ACADEMY OF GENERAL EDUCATIONAL MANIPAL (1984) 150 ITR 135 (KARN.) , CIT VS. DOON FOUNDATION 22 TAXMANN 91 & CIT VS. MATRISEVA TRUST (2000) 242 ITR 20 (MAD.) HOLD THAT DONATION FROM ONE TRUST TO ANOTHER TRUST PERFORMING THE VERY NATURE OF ACTIVITIES ALSO AMOUNTS TO APPLICATION OF INCOME FOR CHARITABLE PURPOSES. NOT ONLY THIS, VARIOUS OTHER JUDICIAL PRECEDENTS CIT VS. MADRASA E- BAKHIYATH-US- SALIHATH ARABIC COLLEGE [2014] 50 TAXMANN.COM 81 (MADRAS) AS ITA NO. 1068/KOL/2018 ASSESSMENT YEAR: 2011-12 SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE PAGE | 4 WELL AS PARAM HANS SWAMI UMA BHARTI MISSION VS. ACIT [2013] 140 ITD 429 (DELHI - TRIB.) ALSO HOLD THAT IT IS ONLY THE RECEIPT OF SCHOOL OR UNIVERSITY THAN TOTAL INCOME OF THE SOCIETY CONCERNED THAT HAS TO BE TAKEN AS INCOME. BE THAT AS IT MAY, WE REITERATE THAT WE ARE DEALING WITH THE LOWER AUTHORITIES' ACTION SEEKING TO DECLINE SECTION 10(23C) IN FUTURE ASSESSMENT YEARS ONLY THEN IN THE IMPUGNED ASSESSMENT YEAR. THE SAME STANDS REVERSED THEREFORE. IT SHALL HOWEVER, BE OPEN FOR THE DEPARTMENT TO EXAMINE THE IMPUGNED ISSUE IN THE FUTURE ASSESSMENT YEARS; IF SO WARRANTED ON FACTS. 6. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BEING PRONOUNCED AFTER NINETY DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE FOREGOING PERIOD NEEDS TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DATED 14 TH MAY, 2020 . 7. IN THE RESULT, THIS ASSESSEE'S APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 19.06.2020. SD/- SD/- (P.M. JAGTAP) (S.S.GODARA) VICE PRESIDENT JUDICIAL MEMBER DATE: 19.06.2020 BIDHAN ITA NO. 1068/KOL/2018 ASSESSMENT YEAR: 2011-12 SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE PAGE | 5 COPY FORWARDED TO: 1. APPELLANT - SHRI LAKSHMI NARAYAN EDUCATIONAL INSTITUTE, BIRLA BUILDING-11 TH FLOOR, 9/1, R.N.MUKHERJEE ROAD, KOLKATA-700 001. 2. RESPONDENT - DDIT (EXEMPTION)-1, KOLKATA, KOLKATA. 3. CIT(A)-25, KOLKATA. (SENT THROUGH E-MAIL). 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH E-MAIL). TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES