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

ITA 1103/KOL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6010 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJA SENGUPTA
• Assessee Lawyers: AGANI BESH SEN GUPTA
• Keywords: Depreciation; Set aside
• Section: 80G; 12AA; 32

Judgement Text

I.T.A NO.1103/KOL/2018 INDIAN INSTITUTE OF CHEMICAL ENGINEERS PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA BEFORE: SHRI P. M. JAGTAP, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO.1103/KOL/2018 (ASSESSMENT YEAR: 2013-14) INDIAN INSTITUTE OF CHEMICAL ENGINEERS APPELLANT [PAN:AAAAI1126Q] VS ITO (EXEMPTION), WARD-1(1), KOLKATA RESPONDENT FOR THE APPELLANT : SHRI AGANI BESH SEN GUPTA, ADVOCATE FOR THE RESPONDENT : SHRI RAJA SENGUPTA, JCIT DATE OF HEARING : 18.07.2019 DATE OF PRONOUNCEMENT : 01.10.2019 ORDER SHRI S.S. VISWANETHRA RAVI, JM: THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 25.09.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-25, KOLKATA [CIT(A)] FOR ASSESSMENT YEAR 2013-14. 2. WE FIND THIS APPEAL WAS FILED WITH A DELAY OF 123 DAYS. UPON THE SUBMISSIONS OF BOTH THE PARTIES, WE FIND THE ASSESSEE HAS MADE OUT SUFFICIENT CAUSE FOR DELAY WHICH REALLY PREVENTED THE ASSESSEE TO FILE THE APPEAL IN TIME. THUS, THE DELAY OF 123 DAYS ARE CONDONED. 3. THE ONLY ISSUE TO BE DECIDED IS AS TO WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A NO.1103/KOL/2018 INDIAN INSTITUTE OF CHEMICAL ENGINEERS PAGE | 2 4. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR SUBMITS THAT THE ASSESSEE IS A TRUST, WHICH IS SOLELY ENGAGED IN EDUCATION AND ALSO IN RESEARCH WORK. IT IS A NON-PROFIT MAKING BODY AND IS ENTITLED TO CLAIM EXEMPTION U/S 10(23C) OF THE ACT. HE SUBMITS THAT THE ASSESSING OFFICER CONDUCTED NO ENQUIRY IN THIS REGARD AND PLACED ON RECORD AN ORDER DATED 01.03.2019 PASSED BY THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS.1101 & 1102/KOL/2018 INVOLVING ASSESSMENT YEARS 2010-11 & 2011-12 AND SUBMITTED THAT THIS TRIBUNAL REMANDED THE MATTER TO THE FILE OF ASSESSING OFFICER FOR HIS FRESH EXAMINATION IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ISSUE RAISED IN THIS APPEAL ARE SIMILAR TO THE ISSUE RAISED IN APPEAL INVOLVING ASSESSMENT YEARS 2010-11 & 2011-12 IN ASSESSEES OWN CASE AND THIS TRIBUNAL REMANDED THE MATTER TO THE FILE OF ASSESSING OFFICER FOR HIS FRESH ADJUDICATION IN TERMS OF THE FINDINGS THEREIN. THE RELEVANT PORTION IS REPRODUCED HEREINBELOW: 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 ASSESSEE 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 ASSESSEES ALTERNATIVE CLAIM FOR DEPRECIATION HAS BEEN DENIED BY THE LD. CIT(A) ON THE GROUND THAT ASSESSEE IS A TRUST WHICH IS NOT DOING ANY BUSINESS ACTIVITY AND FOR DOING SO, HE RELIED ON 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 TRIBUNAL HELD THAT SECTION 32 ALLOWANCE IS 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 FOR TAXING THE RECEIPTS AS REVENUE IN NATURE AND ON THE OTHER HAND ON THE ALTERNATE CLAIM OF ASSESSEE FOR DEPRECIATION DENIES IT ON THE GROUND THAT ASSESSEE IS A TRUST AND SEC. 32 WHICH IS 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-APPLICATION OF MIND OF THE LD. CIT(A) WHILE ADJUDICATING THE ISSUES BEFORE HIM. IT WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT THE ASSESSEE HAS GOT THE REGISTRATION U/S. 12AA 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 ENGAGED 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. 10(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 GROUNDS OF APPEAL AND THE DIRECTION GIVEN IN PAGE 15 AND HIS DECISION IN RESPECT TO ALTERNATE CLAIM 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 PASSED 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 GROUNDS OF APPEAL OF THE ASSESSEE. THEREFORE, I I.T.A NO.1103/KOL/2018 INDIAN INSTITUTE OF CHEMICAL ENGINEERS PAGE | 3 FIND THAT THE APPEALS NEED TO BE DE NOVO ADJUDICATED, SO, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND RESTORE THE APPEAL OF THE ASSESSEE BACK TO THE LD. CIT(A) TO ADJUDICATE THE ISSUES BY PASSING A SPEAKING 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 PURPOSE. 5. IN VIEW OF THE ABOVE OBSERVATION OF THE COORDINATE BENCH OF THIS TRIBUNAL, WE DEEM IT PROPER TO REMAND THE MATTER TO THE FILE OF ASSESSING OFFICER FOR HIS FRESH EXAMINATION AND VERIFICATION. THUS GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.10.2019. SD/- SD/- [P. M. JAGTAP] [S.S. VISWANETHRA RAVI] VICE PRESIDENT JUDICIAL MEMBER DATED : 01.10.2019 PLACE : KOLKATA RS, SR.PS COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT INDIAN INSTITUTE OF CHEMICAL ENGINEERS, DR. H.L. ROY BUILDING, JADAVPUR UNIVERSITY CAMPUS, RAJA SUBODH MULLICK ROAD, KOLKATA 700032. 2 RESPONDENT ITO (EXEMPTION), WARD-1(1), KOLKATA 3 . THE CIT(A), KOLKATA [SENT THOUGH EMAIL] 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA [SENT THOUGH EMAIL] //TRUE COPY// BY ORDER, ASSISTANT REGISTRAR, ITAT, KOLKATA