DCIT (E), New Delhi V. Indo French Centre for the Promotion of Advanced Research, New Delhi

ITA 1354/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0127 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 12AA; 201; 13; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI N.K.B ILLAIYA, ACCOUNTANT MEMBER AN D SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1353/DEL./2017, A.Y. 2011-12 ITA NO. 1354/DEL/2017, A.Y. 2012-13 DCIT(E) VS. INDO FRENCH CENTRE FOR CIRCLE-1(1), E-2 BLOCK, THE PROMOTION OF PRATYAKSH KAR BHAWAN, ADVAN CED RESEARCH DR. SPM CENTRE, 5B, GROUND FL OOR, NEW DELHI INDIA HABITAT CEN TRE LODHI ROAD NEW DELHI PAN : AAATI0155Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PRAVEEN GUPTA, CA REVENUE BY : MS. SUSHMA SINGH, CIT-DR DATE OF HEARING : 09.12.2019 DATE OF ORDER : 31.12.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE THE IDENTICAL ISSUES HAS BEEN RAISED IN ALL THE AFORESAID APPEALS ON THE BASIS OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES, THE ITA NO. 1353,1354/DEL./2017 2 SAME ARE BEING DISPOSED OF BY WAY OF COMPOSITE ORDE R TO AVOID REPETITION OF DISCUSSION. 2. THE APPELLANT DY. COMMISSIONER OF INCOME TAX (E ), CIRCLE 1(1), NEW DELHI (HEREINAFTER REFERRED TO AS 'THE RE VENUE) BY FILING THE AFORESAID APPEALS SOUGHT TO SET ASIDE THE IMPUG NED ORDER DATED 09/12/2016 PASSED BY LD. COMMISSIONER OF INCOME TA X(APPEALS)- 40, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 AND 2012-13 RESPECTIVELY ON IDENTICAL GROUNDS INTER ALIA THAT : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A) HAS ERRED IN IGNORING THE FACT THAT IN THIS CASE, T RANSACTION OF FOREIGN CONTRIBUTION WAS NOT TRANSACTED BETWEEN T HE GOVERNMENT OF INDIA AND GOVERNMENT OF FRANCE. INSTE AD, THE TRANSACTION OF FOREIGN CONTRIBUTION WAS TRANSACTE D DIRECTLY BETWEEN GOVERNMENT OF FRANCE AND THE ASSESSEE SOCIE TY. MOREOVER, IN THE CASE OF THE ASSESSEE, COMPULSORY A UDITING BY C&AG IS NOT REQUIRED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE COMPUTATION OF TAXABLE INCOME OF THE ASSESSEE HAD BEEN DONE AS PER THE PRO VISIONS OF THE ACT, 1961. 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT INCOME O F THE ASSESSEE WAS COMPUTED AS PER PROVISIONS OF SECTION 11 TO 13 OF THE ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUNDS OF APPEAL RAISED ABOVE AT THE TIME OF H EARING. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATIO N OF THE CONTROVERSY AT HAND ARE: ASSESSEE SOCIETY CAME INT O EXISTENCE IN THE YEAR 1986-87 AND WAS REGISTERED UNDER SOCIETIES REGISTRATION ACT, 1860 AS A JOINT VENTURE OF GOVERNMENT OF INDIA AND ITA NO. 1353,1354/DEL./2017 3 GOVERNMENT OF FRANCE WITH OBJECT TO PROMOTE SCIENTI FIC RESEARCH IN BOTH THE COUNTRIES. EARLIER ASSESSEE SOCIETY WAS GRANTED EXEMPTION U/S 35(1)(II) OF THE INCOME TAX ACT AS A SCIENTIFIC RESEARCH ASSOCIATION BUT SUBSEQUENTLY IT WAS REGIST ERED U/S 12AA OF THE ACT VIDE ORDER DATED 13.05.2004. ASSESSEE SO CIETY CLAIMED ITS INCOME AS EXEMPT U/S 11(1)(C) FOR THE YEAR UNDER AS SESSMENT FOR INCOME APPLIED OUTSIDE INDIA. 4. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 9, 90,14,418/- AND 6,08,87,282/- U/S 11(1)(C) OF THE ACT FOR AY 20 11-12 & 2012- 13 RESPECTIVELY INCURRED BY THE ASSESSEE IN FOREIGN CURRENCY OUTSIDE INDIA BEING IN CONTRAVENTION OF PROVISIONS CONTAINE D U/S 11(1)(C) OF THE ACT. THE ASSESSING OFFICER ALSO MADE A DISALLOW ANCE OF RS. 9,96,35,250/- AND 9,16,98,000/- FOR AY 2011-12 AND 2012-13 RESPECTIVELY ON ACCOUNT OF RECEIPT OF THE SAME IN V IOLATION OF FOREIGN CONTRIBUTION REGULATION ACT (FCRA) AND MA DE ADDITION THEREOF TO THE TOTAL INCOME OF THE ASSESSEE. THE AS SESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT 16,46, 74,150/- AND 8,98,45,430/- FOR AY 2011-12 AND 2012-13 RESPECTIVE LY. 5. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WH O HAS DELETED THE ADDITION BY ALLOWING THE APPEALS. FEELI NG AGGRIEVED THE ITA NO. 1353,1354/DEL./2017 4 REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF F ILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. DR, GONE THROUGH THE DOCUM ENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHOR ITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CAS E. GROUND NO. 1 OF ITA NO. 1353/DEL/2017, A.Y. 2011-12 & ITA NO. 1354/DEL/2017, A.Y. 2012-13 7. AO MADE ADDITION OF RS. 9,90,14,418/- AND 6,08,8 7,282/- FOR AY 2011-12 AND 2012-13 ON THE SOLE GROUND THAT THE ASSESSEE HAS FAILED TO GET APPROVAL OF THE CENTRAL BOARD OF DIRE CT TAXES (CBDT) FOR EXEMPTION U/S 11(1)(C) OF THE ACT. HOWEVER, FR OM THE IMPUGNED ORDER PASSED BY LD. CIT(A) IT IS PROVED TH AT THE SAID APPROVAL HAS BEEN ACCORDED BY CBDT VIDE LETTER NO. E. NO. 180/04/2011-ITA-1 DATED 08.02.2016 WHICH IS EFFECTI VE FOR AY 2011-12 AND 2012-13, THE YEARS UNDER ASSESSMENT TO INCUR THE EXPENSES TO THE TUNE OF RS. 9,90,14,418/- AND 6,08, 87,282/- FOR AY 2011-12 AND 2012-13 RESPECTIVELY BY THE ASSESSEE OU TSIDE INDIA FOR THE PURPOSE OF INTERNATIONAL WELFARE AND THE SAME HAS BEEN ORDERED TO BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE SOCIETY. SINCE AFORESAID FACTUAL POSITION HAS NOT BEEN CONTROVERTE D BY LD. DR, WE ITA NO. 1353,1354/DEL./2017 5 FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS WR ITTEN BY LD. CIT(A) IN DELETING THE AFORESAID ADDITIONS. CONSEQUENTLY G ROUND NO. 1 OF ITA NO. 1353/DEL/2017, A.Y. 2011-12 AND ITA NO. 1354/DEL/2017, A.Y. 2012-13 ARE DECIDED AGAINST TH E REVENUE. GROUND NO. 2 AND 3 OF ITA NO. 1353/DEL/2017, A.Y. 2011-12 & ITA NO. 1354/DEL/2017, A.Y. 2012-13 8. AO MADE DISALLOWANCE OF RS.9,96,35,250/- AND RS . 9,16,98,000/- FOR AY 2011-12 AND 2012-13 RESPECTIVE LY ON THE GROUND THAT ASSESSEE SOCIETY HAS RECEIVED FOREIGN C ONTRIBUTION FROM THE GOVERNMENT OF FRANCE WITHIN MEANING OF SECTION 2(1)(J) OF FCRA WITHOUT FILING RETURN QUA THESE CONTRIBUTIONS IN FC-3 TO THE MINISTRY OF HOME AFFAIRS AS PER FCRA GUIDELINES. 9. UNDISPUTEDLY, THE ASSESSEE SOCIETY IS REGISTERED UN DER SOCIETIES REGISTRATION ACT, 1860 AS A JOINT VENTURE OF GOVERN MENT OF INDIA AND GOVERNMENT OF FRANCE WITH AN OBJECT TO PROMOTE SCIENTIFIC RESEARCH IN BOTH THE COUNTRIES. THE LD. DR FOR THE REVENUE VEHEMENTLY CONTENDED THAT SINCE THE ASSESSEE SOCIET Y IS NOT A GOVERNMENT SOCIETY, THE LD. CIT (A) HAS GROSSLY ERR ED IN DELETING THIS ADDITION BY TREATING THE ASSESSEE SOCIETY AS A GOVERNMENT SOCIETY. HOWEVER, WE ARE OF THE CONSIDERED VIEW THA T WHEN THE ASSESSEE SOCIETY IS A REGISTERED SOCIETY UNDER THE SOCIETIES ITA NO. 1353,1354/DEL./2017 6 REGISTRATION ACT ESTABLISHED AS A JOINT VENTURE WIT H AN OBJECT TO PROMOTE SCIENTIFIC RESEARCH OF BOTH THE COUNTRIES A ND THE ENTIRE FUNDS ARE CONTRIBUTED BY GOVERNMENT OF INDIA AND GO VERNMENT OF FRANCE, THE SAME IS AN INSTRUMENTALITY OF THE GOVER NMENT OF INDIA. 10. THE LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS A LETTER, AVAILABLE AT PAGE 44 OF THE PAPER BOOK, ADD RESSED TO THE ASSESSEE'S SOCIETY BY THE MINISTRY OF HOME AFFAIRS EXPLAINING THE TRANSACTIONS NOT ATTRACTING PROVISIONS OF FCRA. FOR FACILITY OF REFERENCE, LETTER (SUPRA) IS REPRODUCED AS UNDER :- 'NO......................... GOVERNMENT OF INDIA/BHARAT SARKAR MINISTRY OF HOME AFFAIRS/GRIH MANTRALAYA 1ST FLOOR, NDCC-II BUILDING, JAI SINGH ROAD, OFF. PARLIAMENT STREET, NEAR JANTAR MANDIR, NEW DELHI - 110 001, DATE : 2.01.2014 TO, DR. DEBAPRIYA DUTTA, DIRECTOR, ........, 5B, GROUND FLOOR, INDIA HABITAT CENTRE, LODHI ROAD, NEW DELHI - 110003. SUBJECT : PERMISSION UNDER FOREIGN (REGULATION) ACT , 2010 SIR, I AM DIRECTED TO REFER TO YOUR LETTER DATED 18 SEP T 2013 ON THE SUBJECT MENTIONED ABOVE AND TO STATE THAT FOREIGN CONTRIBUTION (REGULATION) ACT , 2010 DOES NOT ATTRACT IN RESPECT OF THE FOLLOWING T RANSACTIONS : A) TRANSACTION BETWEEN THE GOVT. OF INDIA AND THE G OVT. OF ANY FOREIGN COUNTRY OR TERRITORY - CLAUSE 51 OF FCRA 2010. ITA NO. 1353,1354/DEL./2017 7 B) BODIES CONSTITUTED OR ESTABLISHED BY OR UNDER A CENTRAL ACT OR A STATE ACT REQUIRING COMPULSORY AUDITING BY C&AG NOTIFICATION NO.S.O.1492(E) DATED 1 JULY, 2011. IN VIEW OF ABOVE, IT IS REQUIRED TO EXAMINE THE SUB JECT PROPOSAL. IF THE FOREIGN CONTRIBUTION RECEIVING BODY COMES WITHIN THE PURVIE W OF ABOVE PROVISION. IF NOT, THEN APPLY ONLINE IN FC-4 THROUGH THIS MINISTR Y'S WEBSITE I.E. WWW.MHA.NIC.IN. YOURS FAITHFULLY, SD/- (GOPAL JHA) UNDER SECRETARY TO THE GOVT. OF INDIA' 11. BARE PERUSAL OF THE LETTER (SUPRA) GOES TO PRO VE THAT WHEN A TRANSACTION IS BETWEEN GOVERNMENT OF INDIA AND GOVE RNMENT OF ANY FOREIGN COUNTRY OR TERRITORY, FCRA IS NOT ATTRA CTED. WHEN UNDISPUTEDLY, THE TRANSACTION OF RS.9,96,35,250 /- AND RS. 9,16,98,000/- FOR AY 2011-12 & 2012-13 RESPECTIVELY IS A GRANT GIVEN BY FRENCH GOVERNMENT TO THE ASSESSEE SOCIETY WHICH IS A JOINT VENTURE OF FRENCH GOVERNMENT AND GOVERNMENT O F INDIA, THE TRANSACTION OF TRANSFERRING THE GRANTS IS A TRANSAC TION BETWEEN BOTH THE COUNTRIES AS SPECIFIED IN THE LETTER (SUPRA). F URTHERMORE, VIDE LETTER DATED 02.01.2014, AVAILABLE AT PAGE 21 OF TH E PAPER BOOK, ADDRESSED TO SECRETARY GENERAL, MINISTRY OF EXTERNA L RELATIONS, GOVERNMENT OF FRANCE BY SHRI RAMESH BHANDARI, THE T HEN FOREIGN SECRETARY, IT IS CATEGORICALLY MADE CLEAR THAT, 'TH E ASSESSEE SOCIETY IS ESTABLISHED FOR PROMOTION OF SCIENTIFIC RESEARCH ETC. WILL BE EXEMPT FROM PAYMENT OF INCOME-TAX.' SO, IN THESE CI RCUMSTANCES, ITA NO. 1353,1354/DEL./2017 8 WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY LD. CIT (A). CONSEQUENTLY, GROUND NO. 2 & 3 OF ITA NO. 1353/DEL/2017 , A.Y. 2011-12 AND ITA NO. 1354/DEL/2 017, A.Y. 2012-13 ARE DETERMINED AGAINST THE REVENUE. 12. FURTHERMORE, IT IS BROUGHT ON RECORD BY THE LD. AR OF THE ASSESSEE THAT IDENTICAL ISSUES HAVE ALREADY BEEN D ECIDED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN FAVOUR OF THE ASSE SSEE IN AY 2011-12 IN ITS OWN CASE VIDE ORDER DATED 29.08.201 7 PASSED IN ITA NO. 2802/DEL/2014 WHICH IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE BOTH T HE AFORESAID APPEALS FILED BY THE REVENUE FOR AY 2011-12 AND 201 2-13 ARE HEREBY DISMISSED BEING WITHOUT MERITS. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DECEMBER, 2019. SD/- SD/- (N.K.BILLAIYA) ( KULDIP SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER D ATED : 31/12/ 2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT ITA NO. 1353,1354/DEL./2017 9 3. CIT 4. CIT(A)-19, NEW DELHI. 5. CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI DATE OF DICTATION 4/12/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/12/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER