Dr. Homi J Bhabha Educational Society, Hyderabad V. DDIT(E)-II, Hyderabad

ITA 1270/HYD/2013

• Counselvise Citation: 127022514 RSA 2013
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARITA
• Assessee Lawyers: A V RAGHURAM
• Keywords: Depreciation; Charitable institution; Opportunity of being heard
• Section: 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND S HRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1270/HYD/2013 ASSESSMENT YEAR 2010-11. DR. HOMI J BHABHA EDUCATIONAL -V- D DIT(E)-II,AAYAKAR BHAVAN, SOCIETY, HYDERABAD. HYDERABAD. PAN:AAAAD2901J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI A.V. RAGHU RA M RESPONDENT BY SMT. HARITA DATE OF HEARING 07-01-2014 DATE OF PRONOUNCEMENT 10-O1-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 27-8-2013 OF CIT (A) IV, HYDERABAD PASSED IN APPEAL NO.308/DDIT(E)/CIT(A)-IV/2012-13 PERTAINING TO ASSE SSMENT YEAR 2010- 11. 2. THE ASSESSEE HAS RAISED SIX GROUNDS. GROUND N O.1 BEING GENERAL IN NATURE, DOES NOT REQUIRE ANY ADJUDICATION. IN GROU ND NOS. 2 AND 3, THE ASSESSEE HAS RAISED THE ISSUE OF DENIAL OF EXEMPTIO N U/S 11 OF THE ACT. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE A SOCIETY I S REGISTERED U/S 12A OF THE ACT. THE ASSESSEE IS ENGAGED IN RUNNING A SCHO OL IN THE NAME OF BRAHMAN TALENT SCHOOL AT S.R. NAGAR, HYDERABAD. FO R THE IMPUGNED 2 ITA NO.1270 OF 2013 HOMI J.BHABHA EDUCATIONAL SOCIETY,HYD. ASSESSMENT YEAR, THE ASSESSEE FLED RETURN OF INCOME OF INCOME DECLARING NIL INCOME AFTER CLAIMING EXEMPTION U/S 11 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON E XAMINING THE ACCOUNTS OF THE ASSESSEE NOTED THAT THOUGH THE GROS S ANNUAL RECEIPTS OF THE ASSESSEE SOCIETY EXCEEDED THE PRESCRIBED LIMIT OF RS.1 CRORE BUT THE ASSESSEE HAS NOT OBTAINED THE APPROVAL OF THE PRESC RIBED AUTHORITY UNDER SUB-CLAUSE (IV) OF SECTION 10(23C) OF THE ACT. TH E ASSESSING OFFICER THEREFORE DENIED EXEMPTION CLAIMED U/S 11 OF THE AC T AND TREATED THE EXCESS OF INCOME OVER THE EXPENDITURE OF RS.38,19, 497/- AS INCOME OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR. THE AO ALSO DISALLOWED THE CLAIM OF DEPRECIATION TO THE TUNE OF RS.5,11,14 5/- ON THE GROUND THAT THE ASSESSEE HAS CLAIMED THE INVESTMENT MADE IN FIX ED ASSETS AS APPLICATION OF INCOME IN THE EARLIER YEARS. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). 5. THE CIT (A) HOWEVER UPHELD THE ORDER PASSED BY T HE ASSESSING OFFICER . 6. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. AS WOULD BE EVIDENT FROM THE ORDER OF THE ASSESSING OFFICER AS WELL AS ORDER OF CIT (A), THE ASSESSEES CLAIM OF EXEMPTION U/S 11 OF THE ACT HAS BEEN REJECTED SOLELY ON THE GROUN D THAT THE ASSESSEE HAS NOT OBTAINED APPROVAL U/S 10(23C)(VI) OF THE AC T FROM THE PRESCRIBED AUTHORITY. HOWEVER, IT IS NOT DISPUTED THAT THE ASS ESSEE IS REGISTERED AS A CHARITABLE TRUST U/S 12A OF THE ACT THEREBY ENTITLI NG IT FOR CLAIMING EXEMPTION U/S 11 OF THE ACT. IT IS THE CONSISTENT VIEW OF DIFFERENT BENCHES OF TRIBUNAL INCLUDING THE HYDERABAD BENCHES THAT IF THE ASSESSEE IS REGISTERED AS A CHARITABLE TRUST, U/S 12A OF THE ACT, EXEMPTION U/S 11 CANNOT BE DENIED SOLELY ON THE GROUND OF ABSENCE OF APPROVAL U/S 10(23C)(VI) OF THE ACT. THE ONLY REQUIREMENT FOR A LLOWING EXEMPTION U/S 11 OF THE ACT IS FULFILMENT OF CONDITION AS LAID DO WN U/SS 11, 12 AND 13 OF 3 ITA NO.1270 OF 2013 HOMI J.BHABHA EDUCATIONAL SOCIETY,HYD. THE ACT. SINCE THIS ASPECT HAS NOT BEEN EXAMINED B Y THE ASSESSING OFFICER OR BY THE CIT (A)WE CONSIDER IT PROPER TO R EMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE SAME AFRESH. IF THE ASSESSEE FULFILS THE CONDITION OF SECTION S 11, 12 AND 13 OF THE ACT, THEN THE ASSESSEES CLAIM U/S 11 OF THE ACT CANNOT BE DE NIED. WITH THE AFORESAID OBSERVATION, THE MATTER IS REMITTED TO TH E FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN COURSE OF HEARI NG THE LEARNED AR SUBMITTED THAT THE INSTITUTION BEING A SCHOOL THERE IS NO QUESTION OF COLLECTING ANY CAPITATION FEE IN THE NAME OF DONATI ON, BUILDING FUND, AUDITORIUM FUND ETC. THIS ASPECT MAY ALSO BE EXAMI NED BY THE ASSESSING OFFICER DURING THE PROCEEDING. 7. SINCE THE MAIN ISSUE OF CLAIM OF EXEMPTION U/S 11 OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, THE OTHER ISSUES PERTAINING TO REIMBURSEMENT OF EXPENSES OF HOSTEL A ND TRANSPORTATION AND CLAIM OF DEPRECIATION ARE ALSO REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE SAME AFRESH. 8. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 10-01-2014. SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 10 TH JANUARY, 2014. JMR* 4 ITA NO.1270 OF 2013 HOMI J.BHABHA EDUCATIONAL SOCIETY,HYD. COPY TO:- 1) C/O S/SRI A.V. RAGHURAM AND P. VINOD, ADVOCATES, 610,BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2) DDIT(E)-II, 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3) CIT(A)-IV, HYDERABAD. 4) DIT(E), HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. 5 ITA NO.1270 OF 2013 HOMI J.BHABHA EDUCATIONAL SOCIETY,HYD.