Indian Institute of Chemical Engineers , Kolkata V. ITO (Exemption), Ward - 1(1), Kolkata, Kolkata

ITA 1102/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6934 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NICHOLUS MURMU
• Assessee Lawyers: SHOVAN DATTA
• Keywords: Depreciation; Set aside
• Section: 80G; 12A; 32

Judgement Text

1 ITA NOS.1101 & 1102/KOL/2018 INDIAN INSTITUTE OF CHEMICA L ENGINEERS, AYS:2010-11 & 2011-12 , A (SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL A(SMC) BENCH : KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] I.T.A. NOS. 1101 & 1102/KOL/2018 ASSESSMENT YEARS: 2010-11 & 2011-12 INDIAN INSTITUTE OF CHEMICAL ENGINEERS (PAN: AAAAI1126Q) VS. INCOME-TAX OFFICER(EXEMPTION), WARD- 1(1), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 29.01.2019 DATE OF PRONOUNCEMENT 01.03.2019 FOR THE APPELLANT SHRI SHOVAN DATTA, ADVOCATE FOR THE RESPONDENT SHRI NICHOLUS MURMU, ADDL. CIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS FILED BY THE ASSESSEE ARE AGAINS T THE SEPARATE ORDERS OF LD. CIT(A)-25, KOLKATA DATED 25.09.2017 FOR AYS 2010-11 AND 2011-12. SINCE GROUNDS ARE COMMON AND FACTS ARE IDENTICAL, WE DISPOSE OF BOTH THESE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE IN ORDER TO PRIMA FACIE SHOW THAT THE IMPUGNED ORDERS HAVE BEEN PASSED BY LD. CIT(A) WITHOUT APPLICATION OF MIND, DREW OUR ATTENTION TO PAGE NO. 15 OF THE ORDER OF THE LD . CIT(A) (AY 2010-11) WHEREIN HE HAS GIVEN A DIRECTION TO THE AO TO TREAT THE RECEIPTS A SSESSEE RECEIVED AS REVENUE IN NATURE AND THAT IT SHOULD BE TAXED AS A BUSINESS ENTITY. THE LD. COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO PAGE 22 OF THE ORDER WHEREIN THE ASSES SEES ALTERNATIVE CLAIM FOR DEPRECIATION HAS BEEN DENIED BY THE LD. CIT(A) ON THE GROUND THA T ASSESSEE IS A TRUST WHICH IS NOT DOING ANY BUSINESS ACTIVITY AND FOR DOING SO, HE RELIED O N THE ORDER OF THE COIMBATORE BENCH OF THE ITAT IN THE CASE OF KARPAGAM CHARITY TRUST VS. ACIT (EXEMPTION), ITA NO. 2739/AMDS/2016 DATED 15.03.2017 WHEREIN THE TRIBUNA L HELD THAT SECTION 32 ALLOWANCE IS 2 ITA NOS.1101 & 1102/KOL/2018 INDIAN INSTITUTE OF CHEMICA L ENGINEERS, AYS:2010-11 & 2011-12 ONLY IN THE CASE OF BUSINESS ENTITY. ACCORDING TO LD. COUNSEL, ON ONE HAND, THE LD. CIT(A) DIRECTS AO TO TREAT ASSESSEE AS A BUSINESS ENTITY F OR TAXING THE RECEIPTS AS REVENUE IN NATURE AND ON THE OTHER HAND ON THE ALTERNATE CLAIM OF ASS ESSEE FOR DEPRECIATION DENIES IT ON THE GROUND THAT ASSESSEE IS A TRUST AND SEC. 32 WHICH I S THE ENABLING SECTION FOR DEPRECIATION IS ONLY FOR BUSINESS ENTITY AND THE REASONING GIVEN BY THE LD. CIT(A) FOR TAXING THE RECEIPT AND THE DENIAL OF DEPRECIATION EXPOSES THE NON-APP LICATION OF MIND OF THE LD. CIT(A) WHILE ADJUDICATING THE ISSUES BEFORE HIM. IT WAS B ROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT THE ASSESSEE HAS GOT THE REGISTRATION U/S. 12A A OF THE ACT ON 26.06.2012 W.E.F. 01.04.2011 AND APPROVAL U/S. 80G WAS GRANTED W.E.F. 30.01.2012. ACCORDING TO LD. COUNSEL, THE ASSESSEE IS A TRUST WHICH IS SOLELY EN GAGED IN EDUCATION INSTITUTION AND ALSO ENGAGED IN RESEARCH WORK. ACCORDING TO LD. COUNSEL , IT IS A NON-PROFIT MAKING BODY AND, THEREFORE, IT IS ENTITLED TO CLAIM EXEMPTION U/S. 1 0(23C) OF THE ACT WHICH NEEDS INDEPENDENT EXAMINATION. HOWEVER, ACCORDING TO LD. COUNSEL, NO SUCH EXERCISE WAS CARRIED OUT BY THE LD. CIT(A) WHILE DISPOSING OF THE ASSESSEES GROUND S OF APPEAL AND THE DIRECTION GIVEN IN PAGE 15 AND HIS DECISION IN RESPECT TO ALTERNATE CL AIM FOR DEPRECIATION IS PER SE CONTRADICTORY WHICH ITSELF CLEARLY SPELLS OUT THE NON-APPLICATION OF MIND OF THE LD. CIT(A), WHICH CONSEQUENTLY VITIATES THE IMPUGNED ORDER PASS ED BY HIM. WE FIND CONSIDERABLE FORCE IN THE AFORESAID SUBMISSION OF THE LD. COUNSEL FOR ASSESSEE THAT THERE IS NON-APPLICATION OF MIND BY THE LD. CIT(A) WHILE ADJUDICATING THE GROUN DS OF APPEAL OF THE ASSESSEE. THEREFORE, I FIND THAT THE APPEALS NEED TO BE DE NO VO ADJUDICATED, SO, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND RESTORE THE AP PEAL OF THE ASSESSEE BACK TO THE LD. CIT(A) TO ADJUDICATE THE ISSUES BY PASSING A SPEAKI NG ORDER AFTER HEARING THE ASSESSEE ON ALL THE GROUNDS RAISED BY THE ASSESSEE IN ACCORDANCE TO LAW. THEREFORE, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 3. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 ST MARCH, 2019. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED : 1ST MARCH, 2019 JD.(SR.P.S.) 3 ITA NOS.1101 & 1102/KOL/2018 INDIAN INSTITUTE OF CHEMICA L ENGINEERS, AYS:2010-11 & 2011-12 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT INDIAN INSTITUTE OF CHEMICAL ENGINEE RS, DR. H. L. ROY BUILDING, JADAVPUR UNIVERSITY CAMPUS, RAJA SUBODH M ULLICK ROAD, KOLKATA-700 032. 2 RESPONDENT ITO(EXEMPTION), WARD-1(1), KOLKATA. 3. 4. CIT(A)-25, KOLKATA(SENT THROUGH E-MAIL) CIT, KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR