ITO(E), Jaipur V. YAZUR SHIKSHA SAMITI, Jaipur

ITA 1093/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2063 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA ACIT
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Question of law; Benefit of exemption
• Section: 143(3); 12A; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 1093 &1094/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 & 2013-14 THE ITO (E), WARD-1, JAIPUR. CUKE VS. M/S YAZUR SHIKHA SAMITI, A-478, MALVIYA NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAATY 0377 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A.VERMA (ACIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.05.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/06/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO APPEALS BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT (A)-III, JAIPUR DATED 26.09.2016 PERTAINING TO A.Y. 2012-13 & 2013-14. BOTH THE APPEALS WERE TAKEN UP TOGETHER FOR THE SAKE OF CONV ENIENCE AND BREVITY. FIRST WE TAKE UP REVENUES APPEAL IN ITA NO. 1093/JP/2016 PERTAINING TO THE AY 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) HAS ERRED IN ALLOWING EXCESSIVE SALARY TO TH E PERSONS SPECIFIED U/S 13(3) OF THE INCOME TAX ACT AND CONSEQUENTIALLY BENEFIT OF SECTION 11 AND 12 OF THE IT ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN ALLOWING BENEFIT OF EXEMPTION U /S 11 ADDITION TO FIXED ASSETS WHICH THE ASSESSEE IS NOT ELIGIBLE TO CLAIM ON ACCOUNT OF DISALLOWANCE OF BENEFIT OF SECTION 11 AND 12A FOR P ROVIDING BENEFIT TO THE PERSON SPECIFIED U/S 13(3) OF THE IT ACT, 1961. 2 ITA NOS. 1093 & 1094/JP/2016 M/S YAZUR SHIKSHA SAMITI,JAIPUR. 3. ANY OTHER QUESTION OF LAW AS DEEMED FIT IN THE F ACTS AND CIRCUMSTANCES OF THE CASE MAY ALSO BE FRAMED BEFORE THE HONBLE T RIBUNAL IN THE INTEREST OF JUSTICE. 2. GROUND NO. 3 IS GENERAL IN NATURE AND NEEDS NO S EPARATE ADJUDICATION. 3. GROUND NO. 1 AND 2 ARE INTER-CONNECTED AGAINST T HE ALLOWANCE OF BENEFIT OF EXEMPTION U/S 11 AND 12 OF THE ACT. ON APPEAL LD. CIT(A) ALLOWED THE BENEFIT OF EXEMPTION U/S 11 & 12 OF THE ACT AND ALSO THE CONSE QUENTIAL RELIEF. 4. AGAINST THIS, THE REVENUE IS IN PRESENT APPEAL. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED THAT LD. CIT(A) WA S NOT JUSTIFIED IN GRANTING THE RELIEF OF THE ASSESSEE. HE SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT ASSESSING OFFICER HAS CATEGORICALLY GIVEN A FINDING THAT THE SALARY SO PAID IS EXCESSIVE AND THEREFORE, THE ASSESSEE HAD VIOLATED THE PROVIS IONS OF SECTION 11 & 12 OF THE ACT. 5. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND SUPPORTED THE O RDER OF THE LD. CIT(A). HE SUBMITTED THAT THE ASSESSEE TRUST HAD SPECIFICALLY EXPLAINED THE DUTIES AND THE FUNCTION OF THE PERSONS TO WHOM ALLEGATION IS OF PA YMENT OF EXCESSIVE SALARY. HE SUBMITTED THAT DR. ANOOP SINGH IS A MANAGING DIRECT OR AND MANAGES THE ENTIRE AFFAIRS OF THE ASSESSEE TRUST. MOREOVER, THE AO HA S NOT POINTED OUT AS HOW THE MONTHLY SALARY PAID TO DR. ANOOP SINGH IS EXCESSIVE BY CITING COMPARATIVE INSTANCES, OF OTHER TRUSTS OR INSTITUTION. THE AO HAS COMPAR ED THE SALARY TO DR. ANOOP SINGH WITH PRINCIPAL OF THE SCHOOL, FUNCTIONS AND DUTIES OF THE PRINCIPAL OF SCHOOL IS QUITE DIFFERENT FROM THE FUNCTIONS OF THE MANAGING DIRECT OR AND THE ADMINISTRATOR OF THE TRUST. HE SUBMITTED THAT THE ASSESSING OFFICER OUG HT TO HAVE BROUGHT ON RECORD, THE 3 ITA NOS. 1093 & 1094/JP/2016 M/S YAZUR SHIKSHA SAMITI,JAIPUR. COMPARATIVE INSTANCES WHEREBY IT COULD BE DEMONSTRA TED THE SALARY PAID TO SPECIFIED PERSONS ARE EXCESSIVE. IN THE ABSENCE OF SUCH MATE RIAL THE ACTION OF THE AO CANNOT BE SUSTAINED. LD. COUNSEL HAS PLACED RELIANCE ON T HE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. PARIWAR SEWA SANS THAN 254 ITR 268 (DEL.) (HC), FURTHER RELIANCE IS PLACED ON THE DECISION OF THE C O-ORDINATE BENCH RENDERED IN THE CASE OF DIT(E) VS. N.H. KAPADIA EDUCATION TRUST (20 12) 136 ITD 111 (AHMD). 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS HAS GIVEN A FINDING THA T SALARY PAID TO THESE PERSONS ARE COMPARABLE TO EARLIER YEARS WITH YEARLY INCREASE OF 10% ASSESSMENT OF THE TRUST FOR THE ASSESSMENT YEAR 2006-07 AND 2011-12 WERE FRAMED U/S 143(3) WHEREIN THE SALARY TO THESE PERSONS WERE ACCEPTED. THE ASSESSING OFFICER HAS NOT GIVEN ANY JUSTIFICATION EXCEPT SAYING THAT THE SALARY CANNOT BE HIGHER THAN SALARY OF THE PRIN CIPAL. 6.1 THE REVENUE HAS NOT DISPUTED THE FACTS THAT THE CLAIM OF SALARY WAS ALLOWED IN THE AY 2006-07 AND 2011-12. THE AO HAS NOT BROU GHT ANY MATERIAL ON RECORD SUGGESTING THAT THE SALARY PAID TO THE PERSONS SPEC IFIED WAS EXCESSIVE TO THE SIMILARLY SITUATED PERSON. UNDER THESE FACTS, WE A RE UNABLE TO ACCEPT THE REASONING OF THE AO FOR DISALLOWING THE CLAIM OF EXEMPTION TO THE ASSESSE TRUST. THEREFORE, THE GROUNDS RAISED IN THIS APPEAL ARE DISMISSED. 7. NOW, WE TAKE UP ITA NO. 1094/JP/2016, PERTAINING TO THE ASSESSMENT YEAR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL. 4 ITA NOS. 1093 & 1094/JP/2016 M/S YAZUR SHIKSHA SAMITI,JAIPUR. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) HAS ERRED IN ALLOWING EXCESSIVE SALARY TO TH E PERSONS SPECIFIED U/S 13(3) OF INCOME TAX ACT AND CONSEQUENTIALLY BEN EFIT OF SECTION 11 AND 12 OF THE IT ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF EXEMPTI ON U/S 11 ADDITION TO FIXED ASSETS WHICH THE ASSESEE IS NOT ELIGIBLE T O CLAIM ON ACCOUNT OF DISALLOWANCE OF BENEFIT OF SECTION 11 & 12A FOR PRO VIDING BENEFIT TO THE PERSONS SPECIFIED /S 13(3) OF THE IT ACT, 1961. 3. ANY OTHER QUESTION OF LAW AS DEEMED FIT IN THE F ACTS AND CIRCUMSTANCES OF THE CASE MAY ALSO BE FRAMED BEFORE THE HONBLE T RIBUNAL IN THE INTEREST OF JUSTICE. 7.1 THE RESPECTIVE REPRESENTATIVES OF THE PARTIES H AVE ADOPTED THE SAME ARGUMENT AS WERE IN ITA NO. 1093/JP/2016 . THERE IS NO CHANGE INTO FACTS AND CIRCUMSTANCES ARE POINTED OUT BY THE REVENUE. WE H AVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS HAS GIVEN A FINDI NG THAT SALARY PAID TO THESE PERSONS ARE COMPARABLE TO EARLIER YEARS WITH YEARS INCREASE OF 10% ASSESSMENT OF THE TRUST FOR THE ASSESSMENT YEAR 200 6-07 AND 2011-12 WERE FRAMED U/S 143(3) WHEREIN THE SALARY TO THESE PERSO NS WERE ACCEPTED. THE ASSESSING OFFICER HAS NOT GIVEN ANY JUSTIFICATION E XCEPT SAYING THAT THE SALARY CANNOT BE HIGHER THAN SALARY OF THE PRINCIPAL. 6.1 THE REVENUE HAS NOT DISPUTED THE FACTS THAT THE CLAIM OF SALARY WAS ALLOWED IN THE AY 2006-07 AND 2011-12. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTING THAT THE SALARY PAID TO THE PERSONS SPECIFIED WAS EXCESSIVE TO THE SIMILARLY SITUATED PERSON. UN DER THESE FACTS, WE ARE UNABLE TO ACCEPT THE REASONING OF THE AO FOR DISALL OWING THE CLAIM OF EXEMPTION TO THE ASSESSE TRUST. THEREFORE, THE GRO UNDS RAISED IN THIS APPEAL ARE DISMISSED. 5 ITA NOS. 1093 & 1094/JP/2016 M/S YAZUR SHIKSHA SAMITI,JAIPUR. 7.2 THEREFORE, FOR THE SAME REASONING, THESE GROUN DS OF THE REVENUES APPEAL IS DISMISSED. 8. IN THE RESULT, APPEALS OF THE REVENUE IN ITA NOS . 1093/JP/2016 & 1094/JP/2016 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY, THE 07TH DAY OF JUNE 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 07/06/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO (E), WARD-1, JAIPUR. 2. THE RESPONDENT- M/S YAZUR SHIKSHA SAMITI, JAIPUR . 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1093 & 1094/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. 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