ITO, Nainital V. M/s. All Saints College Society, Nainital

ITA 1242/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2756 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: ASHWANI TANEJA
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.1242 & 4838/DEL/2012 ASSESSMENT YEARS : 2008-09 & 2009-10 ITO, GOLBHAR, BARA BAZAR, NAINITAL. VS. ALL SAINTS COLLEGE SOCIETY, NAINITAL. PAN : AAATA3963E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADVOCATE & SHRI SOMIL AGARWAL, CA REVENUE BY : SHRI BHIM SINGH, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THESE ARE APPEALS FILED BY THE DEPARTMENT FOR ASSESSMEN T YEARS 2008-09 AND 2009-10 AGAINST THE ORDERS PASSED BY THE C IT (A), DEHRADUN. THE APPEAL IN ITA NO.1242/DEL/2012 FOR A SSESSMENT YEAR 2008-09, IS BARRED BY LIMITATION OF FOUR DAYS. ON HE ARING THE PARTIES, THIS DELAY IS CONDONED. 2. THE SINGLE COMMON ISSUE INVOLVED IN THESE APPEALS IS E XEMPTION U/S 11 READ WITH SECTION 12 OF THE IT ACT. 3. FOR BOTH THE YEARS, THE CLAIM OF THE ASSESSEE AOP TO TREAT ITS INCOME AS EXEMPT UNDER SECTIONS 11 AND 12 OF THE IT A CT WAS REJECTED BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SE CTION 11 (4A) OF THE ACT, OBSERVING THAT THE RUNNING OF THE SCHOOL WAS NOT FOUND TO BE AN OBJECT OF THE SOCIETY AND THE SCHOOL OF THE SOCIETY WAS BEING RUN ON A PROFIT BASIS, YEAR AFTER YEAR. ITA NOS.1242 & 4838/DEL/2012 2 4. THE LD. CIT (A), FOR ASSESSMENT YEAR 2008-09, FOLLOW ED THE FIRST APPELLATE ORDER FOR ASSESSMENT YEAR 2007-08, TO ALLOW T HE CLAIM OF THE ASSESSEE. FOR ASSESSMENT YEAR 2009-10, THE CIT (A) FOLLOWE D THE SAID FIRST APPELLATE ORDER FOR ASSESSMENT YEAR 2008-09. 5. THE LD. DR HAS CONTENDED THAT THE LD. CIT (A) HAS, FOR BOTH THE YEARS, ERRED IN ALLOWING THE EXEMPTION UNDER SECTION S 11 AND 12 OF THE ACT, HOLDING THAT SECTION 11 (4A) OF THE ACT WAS NOT APPLICABLE TO THE ASSESSEE SOCIETY; THAT THE LD. CIT (A) HAS FAILED TO APPR ECIATE THAT THE DECISION OF THE DELHI TRIBUNAL, IN THE CASE OF BEER S HIVA SOCIAL WELFARE SOCIETY IS DIRECTLY APPLICABLE TO THE FACTS OF THE ASSE SSEE SOCIETY, SINCE THE FACTS IN BOTH THE CASES ARE THE SAME AND THAT SO, T HE PROVISIONS OF SECTION 11 (4A) OF THE ACT WERE RIGHTLY APPLIED; TH AT THE LD. CIT (A) ERRED IN RELYING ON THE DELHI TRIBUNAL DECISION FOR ASSESSMENT YEARS 1998-99/2001-02, WHEREAS THE FACTS FOR THOSE YEARS ARE ENTIRELY DIFFERENT FROM THOSE IN THE YEARS PRESENTLY UNDER CO NSIDERATION; THAT THIS APART, THE ISSUES RELATING TO ASSESSMENT YEARS 1996-97 TO 1998-99 AND 2001-02 ARE PENDING DISPOSAL BEFORE THE HONBLE HIGH COURT OF UTTARAKHAND; THAT THE LD. CIT (A) HAS ALSO FAILED TO CONSIDER THAT SINCE THE ASSESSEES CASE IS SQUARELY COVERED BY THE PROVISIONS OF SECTION 11 (4A) OF THE ACT, THE EXPENSES CLAIMED ARE NOT ALLOWAB LE AND WERE RIGHTLY ADDED BACK BY THE ASSESSING OFFICER TO THE INCO ME OF THE ASSESSEE SOCIETY. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS CONTENDED THAT THE ISSUE OF CLAIM OF EXEMPTION UNDER SECTIONS 11 AND 12 OF THE ACT WAS DECIDED IN FAVOUR OF THE ASSESSEE NOT ONLY BY THE TRIBUNAL FOR ASSESSMENT YEARS 2005-06 TO 2007-08 VIDE O RDER DATED 07.11.2012 (COPY IS PLACED ON RECORD), IN ITA NOS.36 04, 3110 AND 3106/DEL/2010-11, BUT FOR THE YEARS 1998-99 AND 2001 -02, VIDE ORDER DATED 13.04.2007 (COPY IS PLACED ON RECORD) IN ITA N OS.335 & 336/DEL/2005 AND ALSO BY THE DECISION OF THE HONBLE HIGH COURT OF ITA NOS.1242 & 4838/DEL/2012 3 UTTARAKHAND VIDE THEIR ORDER DATED 17.12.2012 (COPY IS PLACED ON RECORD) IN ITA NOS.282 TO 287 OF 2007 AND 41 & 42 OF 2008, IN THE DEPARTMENTS APPEALS IN THE ASSESSEES CASE. THE LD. COUNSE L FURTHER CONTENDS THAT NOT ONLY THIS, THE DEPARTMENT HAS ITSELF, EVEN FOR THE SUBSEQUENT YEAR (ASSESSMENT YEAR 2010-11), VIDE ORDER DAT ED 18.03.2013 (COPY IS PLACED ON RECORD), PASSED U/S 143 (3) OF THE ACT, ACCEPTED THE ASSESSEES CLAIM OF EXEMPTIONS UNDER SECTIONS 11 AND 12 OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. IT IS SE EN THAT THE HONBLE HIGH COURT OF UTTARAKHAND, VIDE ITS ORDER (SU PRA) DATED 17.12.2012, HAS HELD WHILE DISMISSING THE EIGHT APPEALS FILED BY THE DEPARTMENT, THAT: 2. SECTION 13 OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) EXCLUDES THE BENEFITS OF SECTION 11 AND ALSO OF SECTION 12 TO TRUST FOR PRIVATE RELIGIOUS PURPOSES. NOWHERE THE APPELLANT URGED THAT THE ASSESSEE TRUSTS WERE PRIVATE REL IGIOUS TRUSTS OR WERE ESTABLISHED FOR PRIVATE RELIGIOUS PURPOS ES. THE FACT REMAINS THAT THE ASSESSEES WERE REGISTERED UNDER S ECTION 12A OF THE ACT. WHILE SECTION 11 OF THE ACT DEALS WITH INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOS ES, SECTION 12 OF THE ACT EXTENDS THE BENEFITS OF SECTION 11 TO ALSO ANY VOLUNTARY CONTRIBUTIONS RECEIVED BY A TRUST CREATED WHOLL Y FOR CHARITABLE OR RELIGIOUS PURPOSES OR BY AN INSTITUTION E STABLISHED WHOLLY FOR SUCH PURPOSES. 3. IN THE INSTANT CASES, ASSESSEES ARE TRUSTS ESTABLISHED WHOLLY FOR THE PURPOSES OF IMPARTING EDUCATION. THEY RECEIV ED CONTRIBUTIONS FROM THEIR PUPILS FOR THE PURPOSE OF IM PARTING EDUCATION TO THEM. MERELY BECAUSE THE ASSESSEES MADE CONTRIBUTIONS TO OTHER TRUSTS, ALSO REGISTERED UNDER SEC TION 12A OF THE ACT AND BECAUSE, IN SOME OF THE YEARS, THEIR REV ENUE WAS MORE THAN THEIR EXPENDITURE; DESPITE NON-CANCELLATION OF THEIR REGISTRATION UNDER SECTION 12A OF THE ACT, THE ASSESSING AUTHORITY, IN A MOST BLATANT MANNER, HELD THAT THE ASSESS EES ARE NOT ENTITLED TO THE BENEFITS OF SECTIONS 11 AND 12 OF THE ACT. THAT HAS BEEN CORRECTED BY THE COMMISSIONER OF APPEAL S AND RE- AFFIRMED BY THE TRIBUNAL. THE PRESENT APPEALS HAVE B EEN FILED WITHOUT ANY JUST REASON. THE FACT REMAINS THAT, WHILE S ECTION 12A OF THE ACT SPEAKS ABOUT REGISTRATION, SECTION 12AA PRESCRIBES THE PROCEDURE FOR REGISTRATION. SUB-SECTIO N (3) THEREOF MAKES IT ABSOLUTELY CLEAR, IN WHAT CIRCUMSTANCE S, REGISTRATION MAY BE CANCELLED AND WHO CAN DO SO. IN THE EVENT, ITA NOS.1242 & 4838/DEL/2012 4 HAVING CONSIDERED THE RETURNS AND OTHER DOCUMENTS FILED BY THE ASSESSEES, IF THE ASSESSING OFFICER WAS OF THE VIEW TH AT THE ASSESSEES ARE NO LONGER ENTITLED TO THE REGISTRATION, I T WOULD HAVE BEEN OBLIGATORY ON ITS PART TO BRING THE SAME TO THE NOTICE OF THE COMMISSIONER FOR THE PURPOSE OF DE-REGISTRATION OF THE ASSESSEES. INSTEAD OF THAT, IN A MOST MALA FIDE MANNER , HE ASSESSED THE ASSESSEES. WE ARE OF THE VIEW THAT THE COMMISSIONER OF APPEALS AND THE TRIBUNAL HAVE CONCLU DED THE MATTER, REQUIRING NO INTERFERENCE IN APPEALS BY THE HIG H COURT. 8. THUS, THE HONBLE HIGH COURT HAS UPHELD THE ACTIO N OF THE COMMISSIONER (APPEALS) AND THE TRIBUNAL IN HOLDING THE ASSESSEE SOCIETY ENTITLED TO THE BENEFITS OF SECTIONS 11 AND 12 OF THE ACT. THE FACTS OF THE YEARS UNDER CONSIDERATION BEFORE US HAVE N OT BEEN SHOWN TO BE ANY DIFFERENT FROM THOSE PRESENT BEFORE THE HON BLE HIGH COURT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID HIGH COURT ORDER, WE HEREBY REJECT THE GRIEVANCE OF THE DEPARTMENT AS SHOR N OF MERIT AND THE ORDERS PASSED BY THE LD. CIT (A) FOR BOTH THE YEAR S UNDER CONSIDERATION ARE HEREBY CONFIRMED. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE DEPAR TMENT ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.20 13. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 31.07.2013. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES