DCIT, C-I (Exemptions), Chandigarh V. Baba Hira Singh Bhattal Institute of Engg. & Technology, Sangrur

ITA 1392/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5312 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: KIRAN PAPNEJA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NOS.1391 TO 1397/CHD/2017 ASSESSMENT YEARS: 2006-07 TO 2012-13 DY. COMMISSIONER OF INCOME TAX VS. BABA HIRA SING H BHATTAL CIRCLE-1(EXEMPTIONS), CHANDIGARH INSTITUTE OF ENGG . & TECHNOLOGY, LEHRAGAGA SANGRUR PAN NO. AAAAB5513E (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. KIRAN PAPNEJA DEPARTMENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 17/01/2018 DATE OF PRONOUNCEMENT : 17/01/2018 ORDER PER BENCH: ALL THE ABOVE APPEALS HAVE BEEN FILED BY REVENUE AG AINST THE ORDER OF LD.CIT(A), PATIALA DT. 29/06/2017 ON THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN NOT CONSIDERING THE FACT THAT THE SOCIETY IS NOT WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVT. WHICH IS MANDATORY CONDITION TO AVAIL BENEFIT UNDER SECTION 10(23C)(IIIAB) OF THE I.T. ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING EXEMPTION UNDER SECTION 10(23C)( IIIAB) OF THE ACT ON THE GROUND THAT THE ASSESSEE IS 100% FINANCED BY THE GO VERNMENT OF PUNJAB WHEREAS DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE ITSE LF HAS ACCEPTED THAT IT IS AN INDEPENDENT, SELF-SUSTAINABLE AUTONOMOUS BODY. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN RELYING ON SUBSEQUENT FILING OF EVIDENCE IN THE SHAPE OF A LETTER FROM PRINCIPAL SECRETARY TO GOVT. OF PUNJAB WHICH W AS AN AFTER THOUGHT AND MOREOVER DOES NOT PROVE THAT THE ASSESSEE WAS SUBST ANTIALLY FINANCED BY THE GOVERNMENT. 2. ALL THESE APPEALS PERTAINING TO THE SAME ASSESSE E WERE HEARD TOGETHER AND BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FO R THE SAKE OF CONVENIENCE AS THE ISSUES INVOLVED IN ALL THESE APPEALS ARE SIM ILAR. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS RUNNING AN INSTITUTE OF ENGINEERING AND TECHNOLOGY AT LEHRA GAGA. 2 4. THE ASSESSING OFFICER HAS DISALLOWED THE EXEMPTI ON CLAIMED BY THE ASSESSEE UNDER SECTION 10(23)(C)(IIIAB). THE ASSESS ING OFFICER HAS HELD THAT THE TWIN CONDITIONS FOR QUALIFICATION OF EXEMPTION UNDE R SECTION 10(23)(C)(IIIAB) EXIST ONLY FOR EDUCATIONAL PURPOSES AND NOT FOR THE PURPO SE OF PROFIT AND THE SECOND CONDITION BEING THE ASSESSEE SHOULD BE EITHER WHOLL Y OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. THE ASSESSING OFFICER HELD THAT SIN CE NO AMOUNT HAS BEEN RECEIVED FROM THE GOVERNMENT THE INSTITUTE CANNOT B E HELD TO BE ELIGIBLE FOR EXEMPTION UNDER SECTION 10(23)(C)(IIIAB). 5. THE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE COORDINATE BENCH OF ITAT CHANDIGARH VIDE ORDER DT. 21/10/2016 IN ITA NO. 111 0 TO 1116 HAS SET ASIDE ALL THE APPEALS TO THE FILE OF LD. CIT(A) FOR DENOVO ADJUDICATION. 6. IN THE SECOND ROUND OF ADJUDICATION LD. CIT(A) H AS DELETED THE ADDITION BASED ON THE LETTER OF THE PRINCIPAL SECRETARY GOVT . OF PUNJAB TO THE EFFECT THAT THE INSTITUTE IS FULLY OWNED AND CONTROLLED BY THE GOVT. 7. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER WHEREAS THE LD. AR RELIED ON THE ORDER OF THE LD. CIT(A). 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND ALSO PERUSED THE MATERIAL PLACED BEFORE US. THE CONTENTS OF THE LETTER ISSUED BY THE PRINCIPAL SECRETARY GOVT. OF PUNJAB ARE AS UNDER: IT IS STATED THAT GOVERNMENT POLYTECHNIC COLLEGE, L EHRAGAGA WAS UPGRADED BY THE GOVERNMENT OF PUNJAB DURING THE YEAR 2005 AND R ENAMED AS 'BABA HIRA SINGH BHATTAI INSTITUTE OF ENGINEERING & TECHNOLOGY LEHRAGAGA' DISTRICT SANGRUR. THIS INSTITUTE IS ESTABLISHED PROMOTED AND ITS MANA GEMENT IS FULLY OWNED AND CONTROLLED BY THE GOVERNMENT OF PUNJAB. AS THE INST ITUTE IS MEETING ITS EXPENDITURES FROM ITS INTERNAL RESOURCES, THEREFORE GRANT IN CASH IS NOT GIVEN REGULARLY TO THE INSTITUTE BY GOVERNMENT OF PUNJAB. THE OWNERSHIP OF THE LAND AND BUILDING FROM WHERE T HE EDUCATION IS BEING IMPARTED VATS WITH THE COMMENT OF PUNJAB. THE ANNUA L RENT TOWARDS THE SAME IS MADE EXEMPTED ON YEAR TO YEAR BASIS AND IS IN THE - NATURE OF GRANT TO THE INSTITUTIONAL SOCIETY. THE FEES STRUCTURE AND COURSES OF THE INSTITUTION A RE PRESCRIBED BY GOVERNMENT OF PUNJAB, REVIEWED ON ANNUAL BASIS AS DECIDED BY THE COMMITTEE OF THE DEPARTMENT OF TECHNICAL EDUCATION AND INDUSTRIAL TR AINING PUNJAB AND CHANDIGARH. THE REVENUE GENERATED BY INSTITUTE BELONGS TO THE C ONSOLIDATED FUND OF THE GOVERNMENT AND THE SAME HAS BEEN PERMITTED TO BE RE TAINED BY THE INSTITUTION FOR ACHIEVING THE OBJECTIVES OF THE SOCIETY AS YEAR LY GRANT WILL STOP THE ANNUAL 3 BUDGET OF THE INSTITUTE IS PASSED EVERYDAY BY THE D EPARTMENT OF TECHNICAL EDUCATION AND INDUSTRIAL TRAINING THROUGH ITS MEETI NG OF THE FINANCE COMMITTEE. FURTHER, THE ACCOUNTS OF THE INSTITUTION ARE SUBJEC TED TO AUDIT BY THE OFFICE OF THE CONTROLLER AND AUDITOR GENERAL, PUNJAB.' FROM THE PERUSAL OF THE ABOVE IT IS NOT IN DISPUTE THAT THE ASSESSEE FULFILS THE TWIN CONDITIONS OF A) UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION EXIS TING SOLELY FOR THE EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT, AND B)WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT. AS STIPULATED UNDER SECTION 10(23)(C)(IIIAB). 9. SINCE THE ASSESSEE IS WHOLLY FUNDED AND OWNED BY THE GOVT., THE FINANCE ARE BEING AUDIT BY THE CAG, PUNJAB AND THE RECEIPTS ARE PAID INTO CONSOLIDATED FUND OF THE GOVT. THE ASSESSEE IS ELIGIBLE FOR EXEM PTION UNDER SECTION 10(23)(C)(IIIAB). HENCE WE DECLINE TO INTERFERE WIT H THE ORDER OF THE LD. CIT(A). 10. THE APPEALS OF THE REVENUE ARE DISMISSED. THE ORDER IS PRONOUNCED ON 17/01/2018 IN THE OPEN COURT . SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 17/01/2018 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE