ITO (Exemptions), New Delhi V. Management Development Institute, New Delhi

ITA 1143/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4258 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ TONDON
• Assessee Lawyers: S K AGGARWAL
• Keywords: Benefit of exemption
• Section: 12; 11

Judgement Text

ITA NO. 1143/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1143/DEL/2011 A.Y. : 2007-08 INCOME TAX OFFICER (EXEMPTIONS), TRUST WARD-IV, NEW DELHI VS. MANAGEMENT DEVELOPMENT INSTITUTE, IFCI TOWER, 14 TH FLOOR, 61, NEHRU PLACE, NEW DELHI 110 019 (PAN : AAATM0612L) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. S.K. AGGARWAL, CA DEPARTMENT BY : SH. RAJ TONDON, C.I.T. (D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE ASSESSING OFFICER DATED 01.11.2010 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWIN G EXEMPTION OF SECTION 11 AND 12 OF THE IT ACT SPECIAL LY WHEN THE ASSESSEE IS INVOLVED IN COMMERCIAL ACTIVITIES AND NO T RUNNING THE INSTITUTE SOLELY FOR EDUCATIONAL PURPOSE BUT FOR PR OFIT MOTIVE. ITA NO. 1143/DEL/2011 2 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING BROUGHT F ORWARD DEFICIT OF THE EARLIER YEARS WITHOUT APPRECIATING THE FACT THAT THE PROVISION OF SECTION 11, 12 & 13 DO NOT ALLOW ANY SUCH PROVISIONS FOR CARRY FORWARD DEFICIT. 3. IN THIS CASE ASSESSING OFFICER HAD DENIED THE A SSESSEE BENEFIT OF SECTION 11 & 12 OF THE IT ACT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO ITAT DECISION IN ASSESSEES O WN CASE AND HELD AS UNDER:- THE HONBLE ITAT HAS DECIDED THE ISSUE IN ITA NO. 253(DEL)2010 DATED 13 TH AUGUST, 2010 FOR THE A.Y. 2006-07. THE ITAT HAS OBSERVED THAT IN REGARD TO THE GROUND REGARDING CO MMERCIAL ACTIVITY, IT IS FOUND THAT THE FINDINGS OF THE TRIB UNAL ARE CONTAINED IN PARAGRAPH 5 OF THE ORDER FOR ASSESSMENT YEAR 200 1-02 IN ITA NO. 438(DEL)2004 DATED 10.8.2007, PLACED IN THE PA PER BOOK AT PAGE NUMBERS 178 TO 194. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED BELOW:- WE HAVE CONSIDERED THE RIVAL SUBMISSION. IN OUR VI EW, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE IS JUST AND PROPER AND CALLS FOR NON IN TERFERENCE. WE HAVE ALREADY NOTICED THAT THE OBJECTS OF THE SOC IETY WAS PRINCIPALLY TO PROVIDE TRAINING FACILITIES FOR MANG ERS OF INDUSTRY CONNECTED WITH INDUSTRIAL DEVELOPMENT AND INDUSTRIAL FINANCE. SUCH ACTIVITIES ALSO INCLUDE IMP ARTING TRAINING IN MODERN MANAGEMENT AND ALLIED TECHNIQUES . THE ACTIVITY OF PROVIDING MANAGEMENT KNOW-HOW BY ITA NO. 1143/DEL/2011 3 CHARGING A FEE REFERRED TO AS MANAGEMENT CONSULTANC Y SERVICE BY THE ASSESSING OFFICER, IN OUR VIEW, CANN OT BE SEGREGATED FROM THE PROCESS OF TEACHING AND IMPARTING OF EDUCATION IN MODERN MANAGEMENT AND ALLIED TECHNIQUES . IN ANY EVENT IT CANNOT BE SAID THAT IT WAS NOT A CHARI TABLE ACTIVITY WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. THE FACT THAT IN THE PROCESS OF DOING THE AFORESAID ACT IVITY INCOME IS GENERATED IN THE HANDS OF THE ASSESSEE WI LL NOT BE A GROUND TO DENY EXEMPTION UNDER SECTION 11 AND 12 O F THE ACT. EVEN ASSUMING THAT THE ACTIVITY IN QUESTION WA S IN THE NATURE OF BUSINESS, IN VIEW OF THE PROVISION OF SEC TION 11(4A) OF THE ACT, THE ASSESSEE COULD NOT BE DENIED THE BE NEFIT OF EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT, IN VIE W OF THE FACT THAT THE PROFITS HAVE BEEN UTILIZED FOR TH E OBJECTS OF THE TRUST. ON THIS ISSUE, THERE IS NO DISPUTE AS CA N BE SEEN FROM THE ORDER OF ASSESSMENT. THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF C.I.T. VS. THANTI TRUS T (SUPRA) CLEARLY SUPPORTS THE STAND OF THE ASSE4SSEE IN THIS REGARD. CONSEQUENTLY, WE CONFIRM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 5. BEFORE US, LD. COUNSEL OF THE ASSESSEE, AT THE O UTSET SUBMITTED THAT THE MATTER STANDS COVERED IN FAVOUR OF THE ASSE SSEE BY THE TRIBUNAL DECISION AS ABOVE. 6. UPON CAREFUL CONSIDERATION, WE FIND THAT IN THE ASSESSEES OWN CASE, THE TRIBUNAL HAD HELD THAT ASSESSEE SHOULD NO T BE DENIED BENEFIT OF EXEMPTION U/S 11 AND 12 OF THE IT ACT. ADHERING TO THE DOCTRINE OF ITA NO. 1143/DEL/2011 4 STAIRE DECISES, WE UPHOLD THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/05/2011, U PON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 03/05/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES